Refused mortgage - how can we release our equity

Vanilla6

Please help - I'm so frustrated!! I currently live in a shared ownership property, with around £20k equity. Buying the place on my own was a struggle & I built up some high credit card bills. When I met my partner finances eased but got into some difficulties when on maternity leave. Things are much better now and we're looking to move to a better place for our daughter as currently we have no garden. We've recently looked into releasing the equity for home improvements but found that there was a default against one of my credit cards. I've had this amended on my credit record as although I had to agree reduced payments whilst on maternity I never defaulted. This couldn't be removed though as the default was registered by my original credit card co that was taken over by another. We've since decided to simply sell as the equity would cover our largest credit card bill ( huge payments are made each month but nothing gets paid off because of interest) and leave enough for a deposit but have just been informed that our application for a mortgage promise is not going ahead as our credit score is not good enough. One possible reason is that one of my credit cards is always paid regularly but after the due date because of how we are paid. But we have no arrears on anything and it's so frustrating to have cash that we're sitting on but not being able to use it!!! The other consideration is to just sell up and rent but getting off the property ladder may not be too sensible. Suggestions please!! Would be sooo grateful

vn108

what level of cc bills are we talking?

sgh1976

Vanilla6 wrote: »

One possible reason is that one of my credit cards is always paid regularly but after the due date because of how we are paid.

Can you not ask them to change your billing date to fit in with your pay date?

CLAPTON

I'm afraid that not paying the contracted sum is equivalent to a default... so having an arrangement to pay less than the contracted sum is usually shown on your credit report and will make it difficult to get credit for 6 years.

Paying late regularly is likewise viewed as very poor financial management and will reduce your chance of getting any credit and/or increase the APR of any loans... presumably you are paying charges too each month.

You really need to start budgetting and manageing your finances better.
try this budget planner.
http://www.makesenseofcards.com/soacalc.html

if you wish post up the results here or go over to the debt free wannabe board and people will be able to help with the budgetting.

SandC

If I were you I would stay as you are and stop thinking of your equity as cash that you just can't get your hands on. You had a bit of a struggle even buying as shared owner, then despite finding a partner you struggled again whilst on maternity leave and you have not even thought of speaking to your credit card provider about changing the due date of your payments.

You really cannot afford to buy a better place basically. Your daughter will not miss what she never had - better to get yourselves financially sorted in all respects and look to moving when you have the means (not equity!) to do so.