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  • FIRST POST
    • figozzz
    • By figozzz 4th Oct 17, 8:35 PM
    • 2Posts
    • 0Thanks
    figozzz
    2nd mortgage application with bad credit
    • #1
    • 4th Oct 17, 8:35 PM
    2nd mortgage application with bad credit 4th Oct 17 at 8:35 PM
    We own our own home (mortgaged) which is fine and we've never missed a payment in 14 years. We have however had several loans and credit cards a long while ago which went bad and we are now have a repayment plan setup to pay them back over a long period of time. Basically, the banks kept offering us money even though at the time we couldnt afford to pay for any of it.

    That's our situation.

    The issue is, our parents are in a desperate situation where they have pretty much reached retirement age and they have 120k left to pay on their mortgage. They cant get a re-mortgage due to their age and affordability and have explored all options but are not able to obtain a new mortgage on their home so are about to become homeless because their mortgage is about to reach end of term at the end of this month.

    We want to help so have approached our existing mortgage lender to see if we can apply for a 2nd mortgage / buy to let mortgage but have also ourselves been refused. They think their property is valued at 190k, but I think 170k might be a more realistic value. Either way, there is a substantial amount of equity in the property to use as a deposit on a potential mortgage but this doesnt seem to matter.

    I'm not sure what else we can do, but they are in a real desperate situation and have no-one else who can help.
Page 1
    • ACG
    • By ACG 4th Oct 17, 8:59 PM
    • 15,502 Posts
    • 7,853 Thanks
    ACG
    • #2
    • 4th Oct 17, 8:59 PM
    • #2
    • 4th Oct 17, 8:59 PM
    You do not say what bad credit you have and when from, but realistically I doubt you will be able to help for various reasons (bad credit, BTLs with family living there, deposit coming from parents who will be residing in the property etc etc).

    How much will their pensionable income be?
    Will they be receiving any lump sumps?

    I know this is not exactly what you want to hear, but your parents have had an interest only Mortgage for however many years. The time to sort this out was over the last 20+ years, not to leave it until the months before. They may need to accept that they will either have to sell up and downsize or sell up and rent as I do not think you are in a position to help them.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • figozzz
    • By figozzz 5th Oct 17, 1:12 AM
    • 2 Posts
    • 0 Thanks
    figozzz
    • #3
    • 5th Oct 17, 1:12 AM
    • #3
    • 5th Oct 17, 1:12 AM
    Well we owe a substantial amount of money in credit cards and loans. Possibly around £20k. Several defaults etc

    Parents have had their own share of bad debt and have previously had an IVA with finished several years ago

    I had no doubt before applying for a second mortgage that I was asking for the impossible but we had to try something

    It's easy for you to sit on your high horse and say that the time to sort this was 20 years ago. Anyone can fall on hard times, sometimes it's not easy to get back up after being stepped on for one reason or another.

    The very existence of this forum is because it's all too easy for things to go wrong and there's all too many people willing to capitalise on someones desperation and time of need but not many willing to help people back up again.

    I know the reality of the situation. Your arrogant response is not helpful.
    • Debtslayer
    • By Debtslayer 5th Oct 17, 7:10 AM
    • 390 Posts
    • 544 Thanks
    Debtslayer
    • #4
    • 5th Oct 17, 7:10 AM
    • #4
    • 5th Oct 17, 7:10 AM
    I don't think ACG's post is arrogant, that is the reality of the situation & ACG has just pointed out the fact as they are.
    You came on forum looking for help and advice which is what you have received, unfortunately it's not the answer you wanted.
    I think your parents best option is to sell up and at least they will get some equity out of the property. Then either rent somewhere or is there an option to live with you?
    Current Mortgage 01.09.17 £113,949.32
    MFW Start Mortgage: £114,794.64
    Current MED: 2036 Target MED: 2026
    Overpayment Target for remainder of 2017: £2,000
    Mortgage overpayment savings: £473.20
    MFW No 124
    • amnblog
    • By amnblog 5th Oct 17, 7:18 AM
    • 9,855 Posts
    • 3,817 Thanks
    amnblog
    • #5
    • 5th Oct 17, 7:18 AM
    • #5
    • 5th Oct 17, 7:18 AM
    A few observations Figo.

    Lenders will typically allow borrowers to stay in their home and keep paying interest beyond mortgage term if they believe the property is for sale - this should give your parents some room to work on plan B.

    Your own scenario outlined here suggested you should not, and are not in a position to get involved. It is difficult enough to get mortgage lending on one property with a debt management plan. Forget it for a second family property.

    Your parents need to be thinking about:

    Downsizing
    Shared Ownership
    Help to Buy
    Equity Release

    (Not necessarily in that order)

    If they have not already done so, they should be getting their own advice.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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