Can I Refinance My Mortgage With A Default History?
Has an unexpected financial setback or hardship resulted in you defaulting on a mortgage?
While this can significantly impact your credit profile, it does not necessarily mean you are permanently barred from refinancing your mortgage. Here at Investors Mortgage, we can definitely help you navigate your unique situation and find a solution that works for you.
Lenders treat defaults on a case-by-case basis during the new loan application process. Here are some key factors they consider:
• The circumstances that led to the default. Were there unavoidable events like job loss or illness? Or does it signal poor financial management?
• Your financial position since the default. Have you had steady income and met your loan payments? Strong current finances can offset past struggles.
• Time has elapsed since default. The longer it has been since it occurred, the less impact it has on your application. Many lenders focus most on the past 12-24 months.
• Equity in the property. Significant equity makes lenders feel more secure. It shows you’ve been paying down the mortgage as agreed.
• Credit report rehabilitation. Default listings stay on your credit file for 5 years. As that period passes, your score can be rebuilt.
• Co-borrower credentials. A strong co-borrower on your application can counterbalance any lingering default concerns.
Specialist Lender: If your situation is a little more complicated than what has been mentioned above, a specialist lender could be another option. We have access to a network of specialist lenders who cater to individuals with adverse credit histories. While interest rates may be higher, these lenders understand that credit issues can happen for various reasons and are more flexible in their eligibility criteria. The key is applying with the right institutions. An experienced broker like Investors Mortgage can match you with alternative lenders and programs with greater default tolerance.
Expert Negotiation: Our experienced mortgage brokers are skilled negotiators who can advocate for you with lenders to secure the most favourable terms possible, even in the presence of defaults or judgements on your record.
Developing an Exit Strategy: We can assist you in formulating a clear plan for addressing any outstanding debts or judgements, which can reassure lenders and strengthen your refinancing application. And once there has been enough time passed after your default, we can then look into switching your loan back to a mainstream lender with a cheaper loan product.
We believe that with the right approach and support, refinancing with credit challenges is achievable. Let us partner with you to explore the best options available and help you achieve your financial objectives.
Please don't hesitate to reach out to schedule a consultation. We're here to help you take the next steps towards securing a brighter financial future.
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