Not yet registered? Create a OverBlog!

Create my blog

Do home loans help people with bad credit?

When you have a combination of a bad credit history and an overwhelming debt burden, you may decide to consolidate all of your credit obligations. The objective of a secured loan or remortgaging is to put all of your credit under one roof and make a single, affordable repayment each month.

Reasons to take out a secured home loan with bad credit

Credit history
If you've missed or made late payments on your credit obligations during the last seven years, you'll have an adverse credit history. This means that it's far more difficult to get an unsecured loan from your bank. However, CCJ loans are available, provided that you've got sufficient equity in your home and can afford to make the necessary repayments.
Debt consolidation
Rather than making lots of small payments to your creditors, you're able to consolidate debt. This involves taking out a bad credit home loan, paying off your existing creditors and paying money to a single lender. This simplifies your personal finances and decreases the likelihood of accruing a charge for a missed or late payment.
Spreading the costs
You're also able to spread the cost of repayment with a mortgage for poor credit. Rather than making repayments towards revolving credit indefinitely, you'll know when your debt will be completely cleared. Spreading the repayments over a longer period of time will also help to improve affordability so less of your monthly income goes towards servicing debt.

Is it advisable to refinance with poor credit?

Guarantees being seized
The main problem with taking out a low credit mortgage for the purpose of debt consolidation is that it involves turning unsecured into secured debt. If you default on the agreement, this gives your creditors the right to recover their money by repossessing your home. When you have a poor credit history, a debt relief solution is a far less risky proposition.
Interest amount accumulates
Although spreading the repayments reduces the amount that you pay on your debts each month, it actually increases the amount of cumulative interest that you'll pay. The longer a debt is allowed to continue, the more it will cost you. Lenders regularly talk customers into agreeing to the maximum term because it's the most profitable option for them. Other associated expenses
Sub-prime mortgage lenders are far more difficult to find because so many people have defaulted on their agreements. If you're able to find a lender who will allow you to refinance with poor credit, the cost of borrowing will be high. You will also have to meet other expenses, including the cost of a surveyor. If you repay the debt early, you will pay a hefty redemption penalty.

Same category articles Property

The facts about Vineyard Churches

The facts about Vineyard Churches

The Association of Vineyard Churches, also called the Vineyard Movement, is a neocharismatic evangelical Christian denomination that consists of more than 1,500 churches around the world. This article looks at the facts of the Vineyard Churches in England.
How to find cheap moving company quotes

How to find cheap moving company quotes

Moving is a stressful endeavour that can be expensive if research has not been undertaken, to find the right removal firms. There are many ways to help ease the stress of moving, one of which is to locate a cheap-moving company which will transfer your household goods safely and efficiently. This article explains how to find cheap moving company quotes.
A guide to renting serviced offices

A guide to renting serviced offices

Whether, you’re an established name or a start-up, serviced office spaces to let provide you with the physical space that your company needs without the financial commitment of a permanent agreement. The following article outlines three key factors that you should take into consideration when selecting a serviced office.