Help 90% mortgage needed

mortgagemike

Hi Leanne

Although everyone has given their pennies worth noone has actually given you any options.

You could do an 85% remortgage (pay rate 3.99%) with a monthly payment of £1218 per month. Thus you could clear the majority of your debt leaving around £15,000.

Use your monthly savings to clear the debt down as quickly as possible. You will substancially reduce your monthly outgoings and once you have cleared the residual £15,000 get on with making over payments on your mortgage to clear the remaining £25,000. With a joint income of £62,000 this shouldn't be too much of an issue.

Before making any consideration, check your credit scores on creditexpert.co.uk to check that you will be credit worthy.

Mike

opinions4u

mortgagemike wrote: »

Although everyone has given their pennies worth noone has actually given you any options.

Pardon? Lots of options covered off. A mortgage adviser even said that there were possibilities but it's not easy to expand without full details.

You could do an 85% remortgage (pay rate 3.99%) with a monthly payment of £1218 per month. Thus you could clear the majority of your debt leaving around £15,000.

Assuming a lender could do that. Sub-4% fix at 85%?

Use your monthly savings to clear the debt down as quickly as possible.

While an option, it needs to be considered in the context of a couple that is apparently spending £1,500 more than their income every month, so there is a much more basic point to address first. No point remortgaging and continuing to overspend, albeit by a smaller amount. The end game of disaster would still be the same.

You will substancially reduce your monthly outgoings and once you have cleared the residual £15,000 get on with making over payments on your mortgage to clear the remaining £25,000. With a joint income of £62,000 this shouldn't be too much of an issue.

Even if a 90% remortgage was available, it would still be one hell of an income stretch.

Welcome to the forum.

mortgagemike

I appreciate everyones points, however at least if there is a solution there is something to work back from. Yes they shouldn't have run up so much debt, yes they wouldn't be clearing the debt as such, just reducing their outgoings.

However should they choose this option (as they want to live in this house forever), it makes sense to take action now to sort their current predicament out. They are currently paing out £700 per month + £1545 (totalling £2245) I would think they could be saving themselves circa £900 or £1000 per month by remortgaging and consolidating £25,000s worth of debt. this is a good start as this saving can then be used to clear a perhaps £700 per month of of the £15,000 left on top and give them an extra £200 - £300 per month to actually get some of their life back.

We learn by our mistakes, its how we overcome them. the rate I suggested is an example and dependent on circumstances, but nevertheless illustrates the potential savings on a monthly basis that can be made.

Thrugelmir

mortgagemike wrote: »

I appreciate everyones points, however at least if there is a solution there is something to work back from. Yes they shouldn't have run up so much debt, yes they wouldn't be clearing the debt as such, just reducing their outgoings.

However should they choose this option (as they want to live in this house forever), it makes sense to take action now to sort their current predicament out. They are currently paing out £700 per month + £1545 (totalling £2245) I would think they could be saving themselves circa £900 or £1000 per month by remortgaging and consolidating £25,000s worth of debt. this is a good start as this saving can then be used to clear a perhaps £700 per month of of the £15,000 left on top and give them an extra £200 - £300 per month to actually get some of their life back.

We learn by our mistakes, its how we overcome them. the rate I suggested is an example and dependent on circumstances, but nevertheless illustrates the potential savings on a monthly basis that can be made.

The fundamental point you are missing in this discussion is that the rules have changed. Lenders are reverting back to ways of the past. We've reached the point post crash where 92% of all new mortgage lending is through 6 lenders only.

Banks are businessess to make profit not to bail out people of their personal financial positions. Irrespective of how they arrived there.

Like the majority of posters on this forum. I have enormous empathy with the OP. However I believe the best advice one can give is frank and honest. As only the OP can decide which route they wish to follow.

katsu

LeanneJ77 wrote: »

I've been right through our income /expenditure today and we can manage (just) but will need to make some changes. After all our household bills we have £600 left a month but £400 goes on petrol. That leaves £200 for food, oil heating, car tax/mot and emergencies.

OP - have you used all Martin's articles to see where you can save, looked at switching your gas and electric etc to try and reduce your bills. £200 for "food, oil heating, car tax/mot and emergencies" sounds very difficult to manage to me, so it would be good if you could increase this by reducing your bills.

Even if you don't want to post an SOA, go have a look at the advice on the DFW boards - you might get some tips to help you trim your bills. Also, the old style boards has information on cheap cooking - there is a "feed a family for a month on £100" or something like that website which was created by a person called Weezl from old style so you should be able to get the links from there.

Good luck.