Using Equity--poor credit

Sadza

Can anyone help. We have @ £80k in equity in our house and would like to raise about £20k loan using the equity but have adverse credit and I earn so little, only £17k + wife on martenity. Have approached current lender but says wud nd to be both earning £51k + for them to consider. Have tried the IFA and he cud get good rates etc but told no due to poor credit, some missed payments in past etc. Shud I get a secured loan on the house? Not too keen as some of these lenders are crafty and charge very high interest.

Sadza

Thought I would post this to show my situation..

Current Property
Property Value £275,000
Current Mortgage £188,000
Interest Rate 4.85% with Abbey National
Monthly payments £848.00 Fixed interest only for 2 years until Sept 2007
Equity of £87000
Looking for
Based on above equity, get loan of £25,000 .
top up our mortgage if we remortgage
Increases our mortgage loan to ( £188000+25000) = £213,000
If could get interest rate of 4.85 or better fixed for 2 years
Monthly payments could be £860.67 or thereabouts. interest only.

herbiesjp

I think it would be adviseable to talk to a whole of market mortgage adviser.

There may indeed be a limited number of options available to you.

Edit - you posted the figures at the same time as my post. You want a £213k re-mortgage based on £17k income? Not going to happen unless you have other income to take into account or your wife is going to go back to work

Sadza

If i do this on a self certification basis that may work wouldn't it. It's just finding the company to lend on bad or adverse credit.

herbiesjp

No it would not work on self certification either unless you have other income to take into account

AndrewSmith

Sadza wrote:

If i do this on a self certification basis that may work wouldn't it. It's just finding the company to lend on bad or adverse credit.

Still wont work unless you lie about your income. Self certify does not change the amount you earn nor does it change the multiple applied by the lender.

If you earn £17,000 now, then you still earn £17,000 under self certify.

There may be brokers who are prepared to lie on the application for you to obtain such a mortgage but it carries the risk of prosecution for fraud and 10 years imprisonment for both broker and client.