Remortgage please!

trapped_in_high_interest

Hi,

Because of bad credit history and debt problems we are trapped in a high interest 8,75 % mortgage with kensington and a second mortgage with spml, we have been regularly making payments for a year now and have cleared the arrears. Is there anyone who would accept us for a remortgage. Our payments on a £110,000 mortgage are a whopping £792 a month with and additional £235 a month on a £21,000 second mortgage. Combined in one mortgate I am sure we could get a better percentage but is there anyone who would help us????

jamesd

What are the early repayment fees for each mortgage and when do they end? Are there any other fees you have to pay to leave each mortgage? These will be critical in determining whether it's worth switching.

What are your incomes? Are you having to pay off any other debts?

The BM Solutions sub-prime mortgage range will give you some idea of where credit problems put people. If you qualify for their near prime mortgages, check their prime product and also check mainstream, high street, lenders, since you may well qualify for some of them. They are just one lender, this isn't a recommendaton to use them specifically. If you say which of their ranges you qualify for that may help a broker make a better suggestion.

It seems very likely that you can get a better rate now. The bigger problem may be getting one good enough to compensate for any early repayment penalties.

MortgageMamma

James has pretty much summed this up with his usual good standards, but I just want to add that all sub prime lenders have different critieria and different levels of adverse credit mortgage catergories. The best thing you and your partner could do is obtain a copy of your credit reports and see a mortgage broker for advice specific to yourselves (we can only give generic information on here). If you decide to go it alone however, please be careful as if you are continually credit checked it will leave a footprint on your file and worsen your chances of getting a good deal. - Some lenders have something called credit repair schemes. This means that if you stay with them for the length of the incentive term and make all your payments on time on the mrotgage that they will put you on a prime product straight afterwards (subject to underwriting). Some lenders have something called a credit cascade system, which means if you do not fit the criteria of the product you are applying for it will automatically offer you the one in the right category they provide. You should also be careful with this as, lenders scoring/product matching criteria differs widely, so the mortgage presented in a cascade category for "lender 1" may be much more or less competitive than what you would get from "lender 2"

trapped_in_high_interest

Hello,

Thanks for your replies, we earn about 33,000 between us and there are no penalties on the mortgate but about a £1,000 on the loan. We have 2 CCJs and a number of other debts totalling about £8,000. We went to CAB and they have arranged £1 per month on them all and we have kept to all these arrangements for a year now.

We were under threat of re-possession but have cleared the arrears on mortgage and loan and have made regular payments for a year.

We have been contacted by AWD finance to see if they can get a remortgage for us but has anyone heard of them? Bit unsure as it seemed like a cold call. They say the initial consultation is free.

Any thoughts guys and girls??

MortgageMamma

trapped_in_high_interest wrote:

Hello,

Thanks for your replies, we earn about 33,000 between us and there are no penalties on the mortgate but about a £1,000 on the loan. We have 2 CCJs and a number of other debts totalling about £8,000. We went to CAB and they have arranged £1 per month on them all and we have kept to all these arrangements for a year now.

We were under threat of re-possession but have cleared the arrears on mortgage and loan and have made regular payments for a year.

We have been contacted by AWD finance to see if they can get a remortgage for us but has anyone heard of them? Bit unsure as it seemed like a cold call. They say the initial consultation is free.

Any thoughts guys and girls??

Did you ask where they gotyour details from? Its not allowed to cold call for mortgages - where did they say they were based? I've never heard of them...but there are literally thousands ofbrokers in the UK

Your best option here is to contact a whole of market broker who will assess your situation in more details, if they don't charge a fee yu have nothing to lose - good luck

MM

jamesd

trapped in high interest, I suggest avoiding AWD Finance. Two warning signs:

1. They already seem to have broken the rules with a cold call.

2. They said initial consultation free when normally all of the work is free, with the broker paid by commission from the mortgage lender. There are some exceptions with small loan values, possibly below 50,000 or so, when up to 200-300 pounds could be charged. Any more than that and you should run away fast - they are playing you for a fool, exploiting your doubts about your situation.

It sounds as though you might now qualify for a standard interest rate mortgage from some mainstream lenders, or for something close to that from some sub-prime lenders. Best thing to do is seek out a normal mortgage broker. You'll need to supply them with your credit reports so they can ensure that they only recommend a mortgage you're likely to get, otherwise too many credit checks could harm your chances or make your interest rate worse.

I can't guarantee that you'll get a rate near normal because that depends on the full details of your situation, like exactly when the arrears ended and your payments started to be on time. They would probably need to have been on time, with no more than one late, for a year to get a fully prime rate mortgage, though there is some variation among lenders.

If you say what part of the country you're in one of the brokers or other participants here might be able to recommend a trustworthy broker.

There are also many brokers who post here regularly and might be interested in you as an email and telephone customer if you can't find a broker you trust locally. MortgageMamma is one of those.

I'll be very surprised if you can't get a rate significantly below the one you're currently paying. Below 6% looks fairly likely.

trapped_in_high_interest

Hi,

Thanks for all the advice, I'm in Essex so details of a good broker would be most appreciative. We have paid mortgage and loan repayments plus money off the arrears for a year and the arrears we have cleared completely. I was thinking of trying either L & C which Martin recommends or I saw an advert for Chelsea Building society?

kenshaz

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Mortgages with poor credit

trapped_in_high_interest

Hello,

Thanks for all the advice so far, I have just signed up to get our free credit report and the information on it shows the current mortgage as only last 4 payments up to date? Why is this? Is it because previously we had arrears even though we have made the correct payment plus the arrear payment we agreed with the lender for the last year. Also the next account I have which the CAB have arranged a payment of £1 per month is showing as an 8 in the credit report but I have made this agreed payment for the last year. ???? What is going on? Any thoughts? Anyone?

homer_j_3

AWD finance are a fairly big brokerage that I used to compete with before I saw the fee free mse light lol.

They will charge you just under 2% for anything they arrange. They are not whole of market, they may and try tell you they are representative of whole of market/ They cannot do anything more than what a fee free broker can do.

Stay well clear

jamesd

trapped in high interest, ask the mortgage company to change the credit record to show that you complied with the terms of your arrangement with them. Since it's worked for a year they might do as you wish. Probably not since it helps to lock you in with them, but asking is free.

If they won't do that, check that the number of months in arrears that may be reported as a number in the credit report decreased as your payments completely paid off each month of arrears you had. If they didn't, ask them to change that so it shows you gradually clearing the arrears.

Mortgage arrears are fairly bad for getting a new mortgage and will probably currently block you from getting a prime rate mortgage if you can't get the current lender to remove them.

Also check to see exactly when you can remortgage without paying the penalty. In a different call if you have to phone to find out.

Lenders like BM Solutions will accept you with 8 months of arrears in the last 12 months. Whether it's worth switching or waiting for less than 6 months or less than 3 or 2 or 1 months depends on the penalty for switching and the rest of the credit record (CCJs etc.).

First see what you can get them to do about the credit history, if anything.

At present, at 8.75, you'd be paying about 300 a month more than on a 6% mortgage. So comparing that to the penalty for switching will give you some idea of whether it's worth switching or not - just divide one by the other to start with and if the number is higher than the time until the penalty ends it's likely that you're better off not switching. Two cautions about this very rough calculation: the second mortgage appears to be at a higher rate or for a shorter term and you may get better or worse than 6% - I expect better by the time the penalty ends.

As soon as you find out what the current lender will do about the credit history it's time to chat with a mortgage broker. You might usefully consider a mortgage wtih no switching penalty and/or no arrangement fee but a higher interest rate because with your credit record steadily improving each month it might pay to switch twice, once to a fairly high, but still lower, temporary rate and again 6 months to a year later.

If you can manage 75% LTV (25% deposit/equity) don't even think of paying more than 6% - you can do at least that well for a two year tracker if you have to. Knowing what the current property value is will help in working out what you might be able to do.

But really, it's broker time, not posting here time, once you know what the current lender will do. But definitely worth saying what you're offered here before saying yes.