Getting equity release with bad credit is not impossible in the UK, but it may end up being more challenging to qualify for than if you had a good credit rating.
If you have credit issues (such as CCJs, defaults, arrears or missed payments on loans or credit cards), you might be able to get a loan from specialised lenders that cater to consumers with a poor credit score.
They may be prepared to provide you with a loan if you can show that you have the capacity to repay it. You will most likely have to pay greater interest than someone with good credit.
Equity release with adverse credit is still an option worth considering if you need extra funds and do not want to sell your home or take out a traditional mortgage. Talk to a mortgage advisor for equity release advice, or read on to learn more about your options when releasing equity.
Equity release is a way for older property owners to gain access to some of the equity stored in their home without being required to make monthly repayments on the cash they received.
The money available is based on the property value, and any applied interest is instead repaid when their home is eventually sold from the sale proceeds.
A home equity loan is a kind of borrowing that allows you to access the value of your property. Taking out a mortgage, selling your house, or using a specialised home equity release plan are all options.
In the case that you own your home outright, it is possible to release equity by taking out a second mortgage or selling part of your property to a company that specialises in this.
If you have an outstanding mortgage, you can sometimes extend it or take out a further home equity loan to release equity. However, this could mean paying more interest over the long term.
There are also specialised types of equity release plans accessible (like a lifetime mortgage) that enable you to access equity release funds without having to make any monthly payments. These products typically come with higher interest rates, so they’re not suitable for everyone.
Almost all lenders will perform a credit check when you apply for an equity release plan. This is to see if you have any debts that could affect your ability to repay the loan.
If you end up with a bad credit rating, it’s critical to contact a specialist lender before applying so that they may evaluate your position and advise you on the best approach forward before a credit check takes place.
There are some lenders who don’t perform credit checks, but they will typically only allow people to borrow money if they can demonstrate their good credit history in other ways. A mortgage advisor can direct you to a suitable lender.
A bad credit report can affect equity release in a few ways:
So, if you’re considering equity release, you’ll need to improve your credit score before applying for an equity release loan so that you can get the best rate and have the greatest chance of your equity release application being accepted.
Remember, credit reports are often not the most significant factor in the outcome of an equity release decision. Instead, your property value and age are used.
Below, find the answers to some questions about trying to get equity release if you have a bad credit record.
If you have no credit score, this won’t necessarily affect your chances of getting equity release. However, it’s worth considering that most lenders will want to see proof of your ability to repay the loan before they release equity to you, especially if you have no credit file. This might be in the form of payslips or bank statements.
If you have credit card debts (or any other debt), this doesn’t necessarily mean that you won’t be granted equity release. However, it’s worth noting that most lenders will want to see proof that you can repay the loan before they lend to you.
This means that you might be required to provide additional documentation such as bank statements or payslips.
If you have arrears, you may find it more difficult than most to be granted equity release. In order for most lenders to give you a loan, they will want to see evidence that you can pay it back.
A CCJ or County Court Judgement is a type of court order that can be issued if you owe money to someone and don’t pay it back, and it remains on your credit file for six years. If you have outstanding county court judgements, this doesn’t mean that you won’t be able to get an equity release application approved.
However, it’s worth noting that it will be much for challenging and that most lenders will require proof that you will be able to pay back the loan before they extend credit to you. This means that you’ll need to provide your lender with more evidence, such as bank statements or payslips, in order to get approved.
An IVA is a type of debt solution that can be used if you owe money to multiple creditors and are struggling to repay it.
If you’re in an IVA, this doesn’t mean that you won’t be eligible for equity release schemes. However, bear in mind that most lenders will want to see proof that you can pay back the loan before they do so.
If this is the case for you, you will likely need to provide proof of income and bank statements in addition to any other debt secured against your property to your lender for an affordability assessment.
In the case that you have a default on your credit report, this doesn’t mean that you can’t get an equity release loan. However, once again, you will be seen as a less secure client by most lenders, and they will therefore require you to provide documentation such as bank statements or payslips to prove you can afford the loan.
Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.
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All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
A charging order is a specific type of court order that can be issued if you owe money to someone and don’t pay it back.
If you have a charging order, this doesn’t mean that you are not eligible for equity release plans. However, it’s worth noting that most lenders will want to see proof that you can repay the loan before they lend to you.
This means that you might need to provide additional documentation such as bank statements or payslips. Seek mortgage advice if you are finding it difficult to find a lender.
If you’ve been declared bankrupt, this doesn’t mean that your equity release lender will not consider your application. However, it’s worth noting that most lenders will want to see proof that you can repay the loan before they lend to you.
Therefore, you may need to provide a lender with additional documentation such as bank statements or payslips.
No. You do not generally have to make any monthly repayments, so it won’t have any bearing on your credit report, though you’ll still be credit checked by your lender, which will always result in a temporary decrease in your score.
It can be difficult to be accepted by equity release lenders with bad credit, but it’s not impossible. There are a couple of things you can try that might improve your chances of getting approved:
If you’re struggling to find an equity release lender who will lend to you and have already considered mortgage brokers specialising in adverse mortgage products, there are a few other options you can consider:
If you are retired and struggling financially, consider continuing with part-time work or taking on freelance work. This can help you boost your income and improve your chances of getting approved for a loan.
Try to maximise your savings by cutting back on unnecessary expenses and putting any extra money you have into a savings account. This will give you a cushion to fall back on if you run into financial difficulties.
If you have family or friends who are willing and able to help, you could consider asking them for a loan. This is usually only an option if you have a good relationship with the person and are confident that you will be able to repay the loan.
If you own your own home, you could consider downsizing to a smaller property. This would free up a lump sum of extra cash from your property value that you could use to help pay off any debt or cover living expenses.
If you have an annuity, you could consider using the income from this to help pay off debts or cover living expenses. This option is only available to people who have already retired and have an annuity.
If you’re on a low income, you may be entitled to certain benefits that could help you make ends meet. It’s worth checking to see if you’re eligible for any of these benefits and claiming them if you are.
Some of the benefits you may be entitled to include:
A poor credit history can make it challenging to be approved for an equity release plan, but it’s not impossible.
There are a few things you can do to improve your chances of getting approved: work on your credit rating beforehand, make sure you have all the necessary documentation, shop around and compare different lenders, and consult an equity release calculator or mortgage broker.
It is strongly recommended to only consider an equity release plan from a lender that is a member of the Equity Release Council.
Remember, releasing equity may not be right for everyone, and there are a number of things to consider before taking out a plan. If you’re thinking about equity release, make sure to get advice from qualified advisors to ensure that it’s the right decision for you and your specific financial situation.
The adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
Equity release is a way for older property owners to gain access to some of the equity stored in their home without being required to make monthly repayments on the cash they received.
The money available is based on the property value, and any applied interest is instead repaid when their home is eventually sold from the sale proceeds.
There are some lenders who don’t perform credit checks, but they will typically only allow people to borrow money if they can demonstrate their good credit history in other ways. A mortgage advisor can direct you to a suitable lender.
If you have no credit score, this won’t necessarily affect your chances of getting equity release. However, it’s worth considering that most lenders will want to see proof of your ability to repay the loan before they release equity to you, especially if you have no credit file. This might be in the form of payslips or bank statements.
If you have arrears, you may find it more difficult than most to be granted equity release. In order for most lenders to give you a loan, they will want to see evidence that you can pay it back.
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Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.
You can speak to Boon Brokers on the number below and discuss your options
0333 567 1607
Use the equity release calculator and see how much money you could receive.
You can book a call back from for an equity release specialist, who can call you when it's conveniant
All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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