What does remortgage mean? A remortgage is when you receive a loan against the value of your home and make monthly payments at an agreed upon rate. It means switching from your present mortgage lender to another financial institution who is offering lower interest rates and/or a flexible payment schedule. It could also mean using the same financial institution you are currently using who is willing to lower the interest rate you are paying.

However, while you are considering a remortgage you must keep in mind that you may have to pay some heavy penalties to get released from your existing mortgage. These penalties could counteract any financial gain that you make from switching your loan.

Also, the main objective of a remortgage is to reduce your interest rates in order to lower your mortgage payments. Since you have a less than perfect credit history, fewer deals will be available to you and you will probably have to pay a higher interest rate than someone who has good credit.

Does this mean you should forget trying to find a bad credit remortgage? No. It simply means you should do your homework first. Learn everything you can about remortgaging, its advantages and disadvantages. You also need to find out exactly what your credit rating is. Obviously, if you have filed for bankruptcy in the past ten years, it will be more difficult to obtain a remortgage.

How can you find financial institutions that offer remortgage deals for people with bad credit? Do your research. Compare the rates of a variety of lenders to find the best interest rates and terms. Do not rush into a deal just because you have bad credit. You need to take your time and make sure you are satisfied with the offer and know that it is the best deal you can get.

Look for lending companies that give low rates to people with bad credit. Beware, however, as certain lenders can be unscrupulous. Stay away from small companies that are not established. If the deal they are offering sounds too good to be true, it probably is, so be careful.

To protect yourself, try to go with a banker or credit union that you feel you can trust. A qualified lender will make sure that you have all the information you need and that you understand everything they have explained to you, before they will ask you to sign up. Always keep a personal copy of all of the paperwork.