Why is the amount we can borrow so low?

Kezza235

We have a mortgage deal about to end in Dec with Northern Rock - have checked and can't be put on a new deal with them. we have a joint annual income of about £27,000.00, property worth about £95,000.00 and want to borrow about £61,000.00 - problem is all the websites i have been on won't lend us that much - some only coming out at about £33,000.00 ( we have a pretty good credit score and although we have some credit card debts these are easily being met each month - has anyone else had this problem? any ideas who we can go to to borrow what we need? thanks

mjm3346

Kezza235 wrote: »

we have a pretty good credit score and although we have some credit card debts these are easily being met each month -? thanks

"Some" credit cards, is the total outstanding more than a couple of £100?

HeidiHi

It will be a total amount borrowed issue with projected spending pattern factors I expect. That, and the fact that hardly anybody has job security any more, and interest rates have got to start going up again at some point.

How much do you owe on the cards? Has it been growing over the last couple of years or shrinking?

Have you got any HP sofas, loans, or secured loans or anything like that?

There's an amount of "affordable" debt that the calculator thinks you can afford, and so it adds everything you owe together with everything you want to borrow, and it seems as if your total is more than they think you can manage.

You might have to go and see a broker to see what your options are.

Sorry not to be more cheerful.

Kezza235

Yes - about £5,000 owed over about 3 cards - would it help if we borrowed enough to pay this off?

dimbo61

So you already have a mortgage with Northern Rock and the deal you are on will end in december.
So what will your mortgage revert to after that ? is it the SVR and will you be paying less?
You dont want to borrow money to clear the credit cards you want to be clearing the CC balance each month by spending less/earning more or both!

SimbaSimon

Kezza235 wrote: »

Yes - about £5,000 owed over about 3 cards - would it help if we borrowed enough to pay this off?

Heres the problem. Borrowing to pay it off won't help as your still be borrowing from somewhere. You need to work on getting the debt cleared so you have more income to allow for a bigger mortgage.

Cannon_Fodder

£5k on credit cards will reduce the affordability calculation significantly. It is not important/relevant that you are happy that monthy cc bills are manageable. The lender will want to be 100% certain, and therefore reduces the amount lent accordingly.

Borrowing from somewhere else to pay off credit cards, is not paying off the debt at all, its just different borrowing ! It will not help.

Best way to borrow most on a mortgage, is to have the least possible in other forms of debt.

CLAPTON

Kezza235 wrote: »

We have a mortgage deal about to end in Dec with Northern Rock - have checked and can't be put on a new deal with them. we have a joint annual income of about £27,000.00, property worth about £95,000.00 and want to borrow about £61,000.00 - problem is all the websites i have been on won't lend us that much - some only coming out at about £33,000.00 ( we have a pretty good credit score and although we have some credit card debts these are easily being met each month - has anyone else had this problem? any ideas who we can go to to borrow what we need? thanks

which sites have you tried
putting your figures into nationwide seems to offer about 80k

HeidiHi

Kezza235 wrote: »

Yes - about £5,000 owed over about 3 cards - would it help if we borrowed enough to pay this off?

No, because you will still owe it. Actually paying it off so it's gone would help though. Easier said than done I know.

Leon_W

The blanket "advice" seems to be to not consolidate your card borrowing on a mortgage yet nobody has bothered to ask what rate you are paying on them ? Crazy.

The simple fact is that if you are paying a standard card rate of 18%ish and cannot find a 0% deal, then consolodating the £5000 on a mortgage seems a reasonable proposition to me as it is going to be the cheapest borrowing.

However, you have to realise that you are exchanging unsecured debt to secured and the trick is to find a deal that allows overpayments and maintain the amount you are currently paying against the cards to reduce the balance, which will obviously reduce faster if the mortgage rate is lower than your card rate.

On the affordability point, whichever way you play it, I can't see a problem so suspect you are not inputting information into the calculators correctly, although you do not say how many dependents you have.

regards

p00hsticks

Leon_W wrote: »

The simple fact is that if you are paying a standard card rate of 18%ish and cannot find a 0% deal, then consolodating the £5000 on a mortgage seems a reasonable proposition to me as it is going to be the cheapest borrowing.

I don't agree - the headline annual interest rate may be lower, but mortgage is a long term secured loan. It may only be around 3-5% a year, but it's lasting 25 years or so! Should you really be looking to pay for a sofa / petrol / groceries / holdiay over that long a period ? no. You should be aiming to pay it off ASAP.