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Mortgage advice re sub-prime

I'm in a funny position and struggling to get sensible advice. Any help would be really appreciated.

I owe around £100k on a variety of credit cards and other unsecured loans (v. bad investment decision). This is being paid off by monthly instalments and the arrangements have been in place for around 3 years. I have negotiated special arrangements personally with all my creditors and all debt is currently interest free.

I own a house with a value of around £550k and a mortgage of around £300k which we have lived in for five years. Our combined salaries are around £150kpa and we are both in secure jobs

We have seen a lovely house at a similar value.

My questions are;

:o Could I simply port my existing mortgage to a new property without going through a new credit check (I had no debt when mortgage originally agreed)

:oIs there any realistic chance of getting a new or additional mortgage at this time, bearing in mind my circumstances and if I did so would that impact question 1. I could either clear all my other debt with a more substantial mortgage or continue paying off the debt and buy the house with a slightly increased mortgage I'd ideally be looking for an additional £60k to cover costs and any potential shortfall)

All thoughts/comments/ideas gratefully appreciated.

ZD
Debt free - achieved Jan 2021

Mortgage free wannabe - started 15/10/21

"No man is a failure who has friends"

Comments

  • luckyfool
    luckyfool Posts: 1,683 Forumite
    With a 25% deposit it is possible to get a new mortgage with your credit history assuming all the credit is repaid, and subject to other details and affordability.

    Are you employed/self employed? What income can you prove?

    In the past keeping on the negotiated payments would have been viable, unfortunately most/all lenders now use the contractual payments in their affordability calculations, and not your negotiated reduced amounts. i.e. On £100k of credit card debt that you had a negotiated payment of £500 a month, lenders would take 3% instead and input £3,000 per month as the outgoing.

    If you were having to settle everything at full value then things would be quite marginal as you would have over £20k in stamp duty on a purchase over £500k, plus estage agents fees etc eating up your equity and making it tight to get the full 25% deposit to put down.

    However, given that you have presumably been making these payments on time with your creditors for a reasonable period of time you may well be able to negotiate full and final settlements with them at 60 or 70p in the pound. i.e. £60k or 70k which would potentially make things work a bit better.

    As to porting your existing mortgage I would say your chances of getting your current lender to agree to it are somewhere between slim and none if it is a high street prime Bank.
  • herbiesjp
    herbiesjp Posts: 8,499 Forumite
    My questions are;
    :o Could I simply port my existing mortgage to a new property without going through a new credit check (I had no debt when mortgage originally agreed)

    Short answer is no - porting (if your current lender offer that facility) is subject to a new credit check and new supporting documentation, as it is treated like a new mortgage

    :oIs there any realistic chance of getting a new or additional mortgage at this time, bearing in mind my circumstances and if I did so would that impact question 1. I could either clear all my other debt with a more substantial mortgage or continue paying off the debt and buy the house with a slightly increased mortgage I'd ideally be looking for an additional £60k to cover costs and any potential shortfall)

    You do have a chance of getting a mortgage, but it really will depend on what your credit file looks like - do you have an up to date copy of this? If not, get one asap.

    You will then need to speak to a whole of market mortgage adviser, and look at what options you are looking at, and they will tell you what is viable and what is not.
    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.
  • Thanks so much for your help. It does look like we might have to stay here a little longer until the mortgage market improves or our financial situation improves.

    The good news is that we are both employed and income is completely provable. Also the debt is starting to tumble quite quickly.

    One final question. Assuming I paid everything off whether by selling the house or over time, and assuming I could raise a 25% deposit, would I then be able to get a decent mortgage (say 3*joint salaries) at a reasonable rate or am I going to be stymied for another six years after that?
    Debt free - achieved Jan 2021

    Mortgage free wannabe - started 15/10/21

    "No man is a failure who has friends"
  • luckyfool
    luckyfool Posts: 1,683 Forumite
    You can get 75% now (potentially), and at reasonable rates (i.e. around 6.25% fixed or 4.3% variable). You would just ideally look to negotiate settlement of your debts and put down 25% on your new property.
  • herbiesjp
    herbiesjp Posts: 8,499 Forumite
    As Lucky says, you could get half decent rates even now

    They are not going to be headline rates, but it may allow you to get where you want to be for now, until your situation improves.

    So all is not lost - get that credit file, and let the whole of market adviser go over it and see which lenders could help out
    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.
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