Does a bad credit record affect the rate offered on a re-mortgage?

nearlyrich

This might seem like a stupid question but I am sure one of the brokers will be able to offer some good advice.

I have a friend who got into financial difficulties as a result of a relationship breakdown and a period when they were unable to work. Around 2 years ago they remortgaged to use some of the equity to pay off the debts and get a fresh start. None of the debts were with the current lender and the mortgage was arranged whilst some of the cards & loans had been in default so it didn't seem too much of a problem then.

Now the fixed rate is coming to an end and they have been advised that the SVR is over 7% and it will become payable once the deal ends.

The amount in question is around £80k on a house worth about £130-£140k mortgage is currently with the Halifax, my friend is worried that lenders will do a credit search see the settlements and demand a really high rate (they settled for about 60% of the amount owed on 2 credit cards and a loan, but to be honest a lot of the extra was charges and late fees)

My gut reaction is to reply to the lender re the change of rate notice asking for a settlement figure(it's a repayment mortgage) and asking if they have any lower rate deals that they can offer, there have been no problems paying the mortgage ever.

Is there a better way to go about this or are there any lenders who are more sympathetic to these kinds of circumstances?

Rick62

The Halifax have some pretty good rates right now, so given their credit history they will probably be best of staying with the Halifax. If the new amount is the same (ie a simple product switch) and their history with the halifax has been good then I would expect Halifax would offer them their prime products.