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Can I Remortgage With Credit Card Debt?

April 8, 2022 By Mortgage Light Leave a Comment

It is possible to remortgage with credit card debt, so long as you are generally able to prove that you can afford your monthly repayments. Assuming you are able to do this, you may still face some restrictions on the amount lenders are willing to offer you. You could also find that any mortgages offered will be subject to a slightly higher interest rate than you might otherwise have been given.

In this article, we discuss how credit card debt and other debts can affect the remortgaging process and what to do if you are struggling to find a lender who will accept your remortgage application.

How does credit card debt affect a remortgage?

This all depends on the level of your credit card or other debts. Of course, the larger the debt, the larger the warning signs are likely to be to any lender. Lenders will want to understand the nature of any debts you may have. They may ask questions such as:

  • How long have your debts been outstanding?
  • Are you struggling to repay them?
  • Has the overall level of debt been increasing?
  • Are your debts properly structured?
  • Have you met all the repayments on time?
  • If your debt has occurred recently, what was the reason for this?

The answers to these questions could potentially present some ‘red flags’ to a lender. This might cause them to view your application as being a higher risk. This may cause them to decline your remortgage application outright. This could then adversely impact your credit score or it may restrict what they are willing to offer you.

credit cards

If you are meeting your regular payments on time and managing to reduce the outstanding credit, then a lender may be willing to look upon your application more sympathetically. Remember, all lenders approach applications on a case-by-case basis. Some lenders will have very strict policies on personal debt. Other lenders are more willing to consider lending to applicants with higher levels of credit card borrowing. You might find that you may be a little more limited in choice, but the mortgage market is vast and there are deals out there for all kinds of borrowers, including bad credit mortgages.

It’s a good idea to enlist the help of a mortgage advisor and broker, such as us here at Mortgage Light. We know which lenders to turn to in order to have the best chance of getting approval on the first attempt. We have access to the whole mortgage market, including lenders that only we can access as mortgage professionals.

Find out more – ‘How does bad credit affect a mortgage?’

How much credit card debt is too much?

There is no cut and dry answer to the question of how much credit card debt is too much. It depends on your personal circumstances and your debt to income ratio. For instance, you might have £3,000 worth of recent credit card debt outstanding. However, maybe you are about to sell your car or due a bonus from work that will repay or substantially reduce this. A lender may then accept this and consider you a sound applicant for a remortgage.

On the other hand, if you have had this level of outstanding credit card debt for some time and there is no evidence of you being able to reduce it, then this could be a sign of poor financial management and therefore a warning sign.

a woman looking at her credit card debt

Some lenders may automatically reject your application in these same circumstances, simply as a result of the level of your credit card debt. Each lender will have its own assessment criteria. It’s important to understand which lenders are likely to be more sympathetic to your situation.

It’s safe to assume that if you have maxed out your credit card/s and you have used up the majority of your available credit, lenders are less likely to look upon your application favourably. Even if you have never missed a credit card payment, high levels of credit card debt can be an indication that you are reliant on credit cards. Even if a lender is willing to accept a remortgage application from you, they will probably have a number of questions for you to try and fully understand the story behind your credit card and general borrowing history.

Find out more – ‘What happens if a mortgage application gets rejected?’

Will missed or late credit card payments affect a remortgage?

If you have missed any credit card payments, this is likely to be a red flag to any mortgage lender. They may think carefully before accepting or processing an application from you. If you have a missed payment that has been outstanding for more than one month (therefore meaning you owe more than any current month’s repayment), you will be in arrears. This is considered a more major red flag.

Late payments are generally considered less severe and as long as the payment is caught up within the same month that it is due, most lenders won’t report it as a missed payment to the credit agencies. If not though, reported late and missed payments will inevitably lower your credit score. And a low credit score can make getting a mortgage a little more of a challenge.

late payment

There are, however, a number of specialist lenders who are willing to lend to applicants with lower credit scores. The remortgage market needn’t be closed to you if you have been impacted in this way.

Find out more – ‘Can I remortgage with bad credit?’

Can I remortgage to pay off credit card debt?

You may be considering a remortgage as a way to pay off some or all of your credit card or other debts. You could potentially do this by remortgaging. Remortgaging could allow you to release some cash from the equity that has built up in your home since you purchased it. You to pay off your outstanding personal credit.

This would effectively consolidate your personal borrowing with your mortgage into a single loan secured against your house. By doing this, you are transferring unsecured short term debt into secured long term borrowing. This will generally reduce the interest burden on the short term debt and also your monthly repayment costs. These will now be spread over a much longer term.

paying off credit card debt

The overall cost of this might ultimately be higher in the long run. You will be repaying your borrowing over a much longer period. However, it should provide some relief to your monthly budget. A good financial advisor, such as us here at Mortgage Light, will be able to guide you on the value of your options if this is something you are considering.

Let’s say for example that you currently own a property worth £300,000. You have a £200,000 mortgage outstanding. You want to release £15,000 of equity from your home in order to pay off your credit card debts (or any other debts). You’d therefore need to take out a new mortgage for £215,000. This will refinance your existing mortgage and provide the additional cash to pay off your credit cards.

This is called debt consolidation. It’s important to note that this simply moves your debt onto your mortgage, rather than actually paying it off. Consolidating your loans doesn’t reduce the amount you owe. It instead restructures it in what might be an efficient way of borrowing.

Find out more – ‘Can you remortgage to pay off debt?’

What should I do if I can’t get a remortgage accepted because of credit card debt?

Struggling to know where to turn when remortgaging with credit card debt? Speak to an experienced mortgage advisor and broker. They should be able to provide guidance and help you to secure the deal you need. At Mortgage Light, we have helped many people just like you achieve what they need from their remortgage – even with credit card debt or adverse credit history.

Our experts know the mortgage market like the back of their hands, including which lenders are more accepting of credit card debt and other financial issues such as low credit scores. We will always do our best to find a suitable lender that will accept your remortgage application.

Let’s start your remortgaging process together. Get in touch with us via our website or call 01908 597655 today.

Filed Under: Remortgaging Tagged With: bad credit, bad credit mortgage, credit card debt, credit score, debt, interest, interest rate, interest rates, low credit score, mortgage advisor, mortgage advisor and broker, mortgage broker, mortgage light, poor credit, poor credit history, remortgage, remortgaging

How to Remortgage Your House

January 18, 2022 By Mortgage Light Leave a Comment

Most homeowners with a mortgage will consider remortgaging at some point – just as you might regularly compare the market to secure the best deal for your car or home insurance.

Remortgaging your house is essentially the process of switching your mortgage from one mortgage deal to another. The new deal that you choose may be with your existing lender, referred to as a ‘product transfer’. Alternatively, it might be a new deal with an entirely different lender.

In most cases, the idea of remortgaging is to shop around and ensure that you have the best mortgage product available to you. But what’s the process and how do you get started? In this article, we will explain how to remortgage your house. [Read more…]

Filed Under: Remortgaging Tagged With: decision in principle, early repayment fees, fact find, fixed rate deal, help to buy, help to buy equity loan, help to buy equity loan scheme, loan to value, LTV, mortgage decision in principle, mortgage in principle, remortgage, remortgaging, remortgaging process, RICs valuation, shared ownership, shared ownership scheme, standard variable interest rate, standard variable rate, SVR

How to Get The Best Rate on a Mortgage

December 24, 2021 By Mortgage Light Leave a Comment

The UK finance market offers a broad range of mortgage products to borrowers. The interest rate charged on those products can vary quite widely for different borrowers. Generally, the interest rate charged by a lender is a reflection of their view of the risk the borrower poses and the scale of loss the lender might run into should that happen.

As a result of these different risk profiles, some of the preferential deals that may be available to one borrower may not be available to another – and vice versa. So, what are some of the factors that affect the interest rate that you may be offered on your mortgage and how can you get the best rate for your personal circumstances? [Read more…]

Filed Under: Getting a mortgage, Managing your mortgage, Remortgaging Tagged With: bad credit, Bank of England, bank of england base rate, base rate, credit score, deposit, employment, getting a mortgage, help to buy, help to buy equity loan, help to buy equity loan scheme, help to buy scheme, house deposit, interest, interest rates, joint mortgage, joint mortgage application, loan to value, LTV, managing your mortgage, mortgage deposit, mortgage guarantor, rates, remortgage, unemployment

Mortgage Costs Increase – Now is Time to Act!

November 4, 2021 By Mortgage Light Leave a Comment

It’s been an eventful few weeks in the mortgage world, with Rishi Sunak’s announcement of the Budget 2021, mortgage rates on the rise and inflation increases all dominating the financial press.

So, what does all this mean for our Mortgage Light customers? We’re here to explain all. [Read more…]

Filed Under: Managing your mortgage, Remortgaging Tagged With: Bank of England, base rate, Budget 2021, energy crisis, fixed-rate, fixed-rate mortgage, inflation, interest, interest rates, managing your mortgage, mortgage interest, mortgage rates, remortgage, remortgaging, standard variable rate, SVR, The Budget, The Budget 2021

Can You Remortgage at Any Time?

September 9, 2021 By Mortgage Light Leave a Comment

Whilst you can remortgage at any time, it’s a good idea to remortgage at a time when you’ll reap the benefits of doing so. Remortgaging usually comes with financial implications and generally has some upfront costs, so it doesn’t always make initial sense for your bank balance.

Remortgaging gives you the opportunity to shop around and secure the best mortgage deal for your circumstances. Let’s look at the reasons why you might choose to remortgage, and the best time to undertake this process. [Read more…]

Filed Under: Remortgaging Tagged With: remortgage, remortgaging, remortgaging early

Can I Remortgage to Release Equity?

March 24, 2021 By Mortgage Light Leave a Comment

By remortgaging, you may be able to access some cash against your home. This is known as equity. It’s the difference between your home’s current value and the amount owed on your mortgage.

Over time, you may find that the value of your property has increased as property prices go up, or following some home improvements you may have carried out. At the same time, you may have paid down your mortgage borrowing. Either of these events will result in an increase in the amount of equity available in your home. Combined, they can have quite a significant impact on the amount of it.

[Read more…]

Filed Under: Remortgaging Tagged With: equity, release equity, releasing equity, remortgage, remortgaging

Switching to a New Mortgage Deal

November 5, 2020 By Mortgage Light Leave a Comment

When you take out a mortgage to buy your home, you typically take a deal that is to be paid off over the next 25-30 years. That doesn’t mean, however, that you have to stick with that original deal or lender for the whole of that term. In fact, it often makes sense to move your mortgage borrowing around onto different deals, or different lenders to take advantage of deals that might be available. Transferring your mortgage borrowing without moving house is known as remortgaging. [Read more…]

Filed Under: Managing your mortgage Tagged With: product transfer, remortgage, remortgaging, standard variable rate, SVR

Remortgage: How Does it Work?

August 13, 2020 By Mortgage Light Leave a Comment

Remortgaging is the process of taking out a new mortgage to replace your current one on a property that already belongs to you. When you buy your mortgage, you don’t have to think of it as something that you’ll be held to for the rest of your life. Instead, think of it as something to re-evaluate periodically to make sure you’ve got the best deal for your situation. [Read more…]

Filed Under: Remortgaging Tagged With: remortgage, remortgaging

How to Remortgage Your Home

August 4, 2020 By Mortgage Light Leave a Comment

Remortgaging your home can sound like a complicated process, but it doesn’t have to be. A mortgage shouldn’t be a one-and-done; it should instead be something that you re-evaluate at the end of a fixed or tracker term. In the same way as you’d review your car insurance each year when your policy ends, you should take a look at your mortgage when the term ends to make sure you’re getting the best deal for your situation. [Read more…]

Filed Under: Remortgaging Tagged With: remortgage, remortgaging

Remortgaging on Maternity Leave

June 27, 2020 By Mortgage Light Leave a Comment

With thousands and thousands of babies born each year in the UK, remortgaging whilst on maternity leave is a common concern. Remortgaging during this period can sometimes cause confusion and worry. If you’re having a baby, your life and your financial situation is likely to have changed a lot since your last application. [Read more…]

Filed Under: Remortgaging Tagged With: maternity leave, remortgage, remortgaging, self-employed, self-employed mortgage

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Related Pages

Below is a list of our related pages on this subject.

Categories

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  • Getting a mortgage
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Recent Posts

  • Does Getting Rejected for a Mortgage Affect a Credit Score?
  • How do Joint Mortgages Work?
  • Can I Remortgage With Credit Card Debt?
  • What Does LTV Mean?
  • What Happens if a Mortgage Application Gets Rejected?
  • Do Shared Ownership Properties Increase in Value?
  • Difference Between Fixed and Tracker Mortgages
  • How do Shared Ownership Mortgages Work?
  • How Does Bad Credit Affect a Mortgage?
  • How to Save For a House Deposit

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All of our brokers deal with the whole of the mortgage market. It doesn’t matter what the question or when you want to speak to us, we have brokers available on the phone or face to face seven days a week. Whether you are just thinking of buying a home and have no idea where to start, a seasoned investor or someone looking to better your current mortgage product, we are happy to help andchat over ideas free of charge.

So we can give you plain and simple advice we will run through some basic questions to help us tailor products to suit your needs. Upon us taking your application forward we will write to inform you that we have given you advice and give you a Key Facts Illustration breaking down the important elements of the product and the fees involved.

For us to take your application forward to a lender we charge an upfront administration fee of £349. For our returning customers looking to renew their mortgage product this fee reduces to £199. We also receive commission from the lender.

A fee of £349 is payable on application of the mortgage. We will receive commission from the lender in addition to the fees you pay. Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage. As with all insurance policies, conditions and exclusions will apply.
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