Advice please!

danter1999

Hi All

Approx 10 years ago I built up huge credit card debt whilst with a former partner. Unfortunately, I still owe a considerable amount on 2 credit cards although I have slowly been re-building my credit rating whilst renting a property.

I have paid off several high interest debts and the only debt I now have is on the two credit cards. My total balance on the two cards is £15000 however I am literally just paying off interest each month after lots of price hikes.

I have fortunately managed to curb my spending habits but literally all my wage is used on my rent and the interest I am paying each month.

I have not applied for 0% balance transfers as I did not believe I would get further credit. After almost 5 years of paying approx £400 of interest each month I have finally discussed my situation with my mum and she fortunately is looking to help me out (if she can),

I would also like to now buy a small house which will help avoid having to make large monthly rental payments. I have checked my credit reports with both experian and equifax and I have just been given a credit rating of 431 good with equifax.

Now I have a few questions that I am looking for some advice on:-

a) Based on this kind of credit rating am I likely to have trouble getting a mortgage?
b) My current debt is approx 50% of my annual income. Is this likely to stop me getting a mortgage?

As mentioned earlier my mum is prepared to help me get the debts paid off straight away but again we need some help. My mother is 62 and is a property owner, with no mortgage and she gets a relatively good pension each month. She has a very good credit history.

a) Will my mother be able to able to take out a mortgage on her property to raise capital even though she is no longer employed?
b) Is she able to re-mortgage even if she does not have a mortgage at the moment?
c) Are there any other ways that she can raise capital easily?
d) Would my mother be able to do balance transfers with new credit cards against credit cards in my name? Is she likely to get enough 0% credit on a balance tranfer cards to cover the debts I have?

I would be grateful for any help or advice that anyone can give us.

Thanks in advance.

danter.

Tixy

danter1999 wrote: »

Hi All

Approx 10 years ago I built up huge credit card debt whilst with a former partner. Unfortunately, I still owe a considerable amount on 2 credit cards although I have slowly been re-building my credit rating whilst renting a property.

I have paid off several high interest debts and the only debt I now have is on the two credit cards. My total balance on the two cards is £15000 however I am literally just paying off interest each month after lots of price hikes.

I have fortunately managed to curb my spending habits but literally all my wage is used on my rent and the interest I am paying each month.

I have not applied for 0% balance transfers as I did not believe I would get further credit. After almost 5 years of paying approx £400 of interest each month I have finally discussed my situation with my mum and she fortunately is looking to help me out (if she can),

I would also like to now buy a small house which will help avoid having to make large monthly rental payments. I have checked my credit reports with both experian and equifax and I have just been given a credit rating of 431 good with equifax.

Now I have a few questions that I am looking for some advice on:-

a) Based on this kind of credit rating am I likely to have trouble getting a mortgage? the actual score means very little. Its what is on your report that matters. Do you have any CCJS/Defaults/missed payments etc showing? Are you still shown as financially associated with your ex? are you on the electoral roll?
b) My current debt is approx 50% of my annual income. Is this likely to stop me getting a mortgage? How much do you want to borrow? Against what value house? what will you do for a deposit (you'll really need at least 25%)

As mentioned earlier my mum is prepared to help me get the debts paid off straight away but again we need some help. My mother is 62 and is a property owner, with no mortgage and she gets a relatively good pension each month. She has a very good credit history.

a) Will my mother be able to able to take out a mortgage on her property to raise capital even though she is no longer employed? probably not
b) Is she able to re-mortgage even if she does not have a mortgage at the moment? in theory yes, in practice it will be hard because she is not employed and presumably her age will go against her (usually don't like mortgages going past age 65)
c) Are there any other ways that she can raise capital easily? probably not
d) Would my mother be able to do balance transfers with new credit cards against credit cards in my name? yes providing you are not transfering an MBNA bal to an MBNA bal (for example) Is she likely to get enough 0% credit on a balance tranfer cards to cover the debts I have? probably unlikely but would depend on size of her pension and her credit history.

I would be grateful for any help or advice that anyone can give us.

Thanks in advance.

danter.

Realistically it would seem that you are not currently in a position to buy a house at the moment. Getting a mortgage now is tougher than it has been for probably 20years or so.
If you mother moves your debt into her name and then you are unable to work (lose your job, become ill etc) then she will be stuck with those debts and legally responsible for them, this means that if she cannot afford to pay either it will be her credit rating at risk and if a secured loan then her house at risk - is she really sure she wants to take that risk?