Mortgage for people with bad Credit History

Taztaztic

Question....A friend of mine has a bad credit report with Experian, on his mortgage. He has cleared the arrears 18 months ago and has now had a clean record for 18 Months. What’s the likelihood that he will be able to get another mortgage or remortgage with the current bank? Are there any alternatives?

ACG

No where near enough info... what do you class as bad credit? Who is the lender? What is the LTV?

The existing lender may do a product switch, getting a new lender might be difficult with ti being the mortgage where there were issues and it being less than 2 years ago - but it will depend on the info above.

Taztaztic

Since 2008 he was in arrears with his current mortgage lender, but he paid it all off in May 2012. So he was on arrears for a quite a number of years.

The current lender is Bank of Scotland. The current mortgage left to pay is £154,000 and he is on an interest only mortgage.

The value of the property is £230,000.

kingstreet

What does he want to do?

Move house? Stay where he is? Same mortgage or bigger? New rate? Change to repayment or stay on interest only?

ACG

Its extremely unlikely he will get an interest only mortgage anywhere else.
I think the only option is to stick with the current lender.

Taztaztic

At the moment he is paying a current rate of 4.95% and wants to get out of that rate.

He is looking to remortgage to a better rate and if possible to release some equity to build an extension on his house or to purchase another property....he isn't too sure yet.

He is hoping to release between £20K-£30K equity from the house either way.

He is open to either repayment or interest only mortgages.

N.B. Just so you know the current lender are saying that if he is to remortage with them, they will need to do a credit search.

ACG

Once the adverse is 2 years old it could be possible.

Id suggest they get their credit reports down a broker and let them going over them and complete a factfind.