Is my remortgage over?

lensgirl

Hi

We tried to remortgage last night with Natwest, taking out additional equity to consolidate and also to pay off our in-law who bought the house with us. On the credit check we failed and having looked through our Equifax report I have a default at the beginning of 2007 which was settled immediately afterwards.

Have I now scuppered our plans completely? Im absolutely gutted over one stupid mistake nearly 4 years ago. Since then our report has been completely clean and on Equifax we each have a score of 454 out of 474 and 900 out of 999 with Experian

beecher2

The default should come off your credit file soon as the 6 years are nearly up. Go to a mortgage adviser and see what they say - the fact you say you want to consolidate loans may also be a red flag to lenders, and maybe if you didn't do this your Loan to Value would be lower which would make you less of a risk.

herbiesjp

How much was the default for? Who was it with?

What is the current mortgage amount? How much extra do you want to add on? Will there be any other debts still outstanding?

What is the property value?

What are your Gross annual salaries?

lensgirl

It was with Next for about £100 i think, defaulted in January 2007 and settled in February 2007.

the mortgage is with Natwest and we wanted to get an additional £42k which paid off all our debts and paid the in-laws off as well.

Current mortgage amount is approx £212000, split in two parts. Mortgage is £203k and they took out an additional £10k almost 2 years ago, however its in all of our names.

we both earn £30k each

I think the property is worth approx £300k, its on the market at the moment and the estate agents we had in valued it between £310k and £320k

beecher2

Why are you remortgaging if you're selling? Wouldn't it be simpler to price the house at £300k, and pay off all your debts out of the proceeds?

lensgirl

We only bought the house for £285k and with the estate agent fees and everything else we would make next to nothing in selling. In laws put down a massive deposit so they have to get that back

beecher2

By selling you'd clear all your debts - you say yourself the house is worth 300k so why are you hoping to sell it for more? If you're not serious about selling, then take it off the market but I'd urge you to go onto the Debt Free Wannabee forums for help with budgeting as consolidating debt isn't a good idea and I doubt that the default is the only reason you were knocked back.

lensgirl

But we wouldnt thats the problem. They have to have back what they put in, so after that and estate agent fees we would be left with about £3k

beecher2

lensgirl wrote: »

But we wouldnt thats the problem. They have to have back what they put in, so after that and estate agent fees we would be left with about £3k

Like I say, you'd clear your debts. If you think your house is worth £300k, how likely is it to find someone who thinks it is worth more? Also, keep in mind that if house prices fall a further 5% or more, you've lost your chance to clear your debts.

SandC

Why don't you ask them for details as to why you have been refused, other than failure of credit check? You will be clearer then as to what your options might be.

But I would tend to agree with the others. If you have declared that you borrowed £60k from family followed by a secured loan of 10k then in this climate that's going to go against you. Lenders now don't look favourably on people who haven't saved up their own deposit. I honestly don't think it's anything to do with missing a Next payment.