Bad Credit Mortgage Question?

rjgreaves

I currently have a mortgage for £123k with Northern Rock, which I have not missed a payment on (nearly 4 years). I have had my house on the market for a year and have just accepted an offer for £145k. The plan was to buy a house for £239k, with a mortgage of £226k over 35 years. We were to port our existing mortgage which is fixed at 5.09% for a further 4 years yet, and take £8k in cash back to pay solicitors and stamp duty etc.

However...

I have a number of defaults from credit cards & loans which are now on a DMP with payplan, which I have been paying for about 2 years (in october) again, not missed any payments on these. I don't have any CCJs. The total credit value is about £77k.

Northern Rock agreed in principle on a mortgage last year for £180k, but I hadn't sold my house at the time. I have just applied for the mortgage in the first paragraph above and it was refered to the underwritters, which then came back as they would only lend me my current mortgage value £123k.
At this point the wife didn't see the funny side of things.

The thing is that I have budgeted and can afford the increase in mortgage payments for the new mortgage. My wage is about £70k and my wifes is £21k. Also Northern Rock have £4.5k penalty fees to leave them (as its fixed rate).

Northern Rock just said to speak to Experian.

Where do I go from here?

(I have also spoken to L&C today and they will get back to me tommorow. I am also going to see a local mortgage adviser tommorow as well.)

any advise?

MortgageMamma

My advice is, rather than letting L & C credit check you, or your local mortgage broker, get a copy of your credit rating yourself and take it along to the meetings. Its very important you get copies from both experian and equifax as they will both hold different information about you.

Also, I'd recommend using a local broker over L & C anyday, its good to support local business and providing he/she is reputable you are sure to get a much better service.

rjgreaves

I got my files from checkmyfile.com today, but Northern Rock refer to Experian, but this had nothing in it. The equifax report was bad, but nothing I did't know about.

I have read elsewhere on here that Northern Rock won't touch anybody with defaults, so I'm now not supprised.

Any mortgage company's worth trying?

herbiesjp

There are several, and some will ignore defaults.

Difficult to say without knowing the severity of your credit history, but you should be able to find a lender, but as you say pay a higher rate for the benefit.

MortgageMamma

Hi

You are right NR wont touch you with defaults. There are absolutely loads of companies that would be happy for your business, but without doing a full financial assessment on your I really couldnt say which one it best.

A WORD OF WARNING. don't go applying for mortgages just hoping one will accept you. The more you get credit checked, the more you will trash your credit ratings.

Seek advice from a professional, it will increase your chances and decrease the worry factor for you!

MM

Old_iron_balls

rjgreaves wrote:

I have read elsewhere on here that Northern Rock won't touch anybody with defaults, so I'm now not supprised.

I passed the mortgage credit check with Northern Rock and I have a default.
However, my default is only small (£400 ) four years old and its satisfied.

Tootsie_Roll

rjgreaves wrote:

However...

I have a number of defaults from credit cards & loans which are now on a DMP with payplan, which I have been paying for about 2 years (in october) again, not missed any payments on these. I don't have any CCJs. The total credit value is about £77k.

I can't believe you are even considering almost doubling your mortgage when you are on a DMP with that much debt. Presumably the DMP is also reduced payements to your creditors - if I was one of them and got wind of this you would have a charging order slapped on you as soon as I could get a court date.