Will I get a mortgage?

tbourner

OK, more to the point, what should I do?

My situation is we've been in our house 4 and a half years, 35 year mortgage which was a together loan from Northern Rock - £115k mortgage and £30k loan at the same interest rate. Last statement said we owe £112,145 secured and £29,042 unsecured (depressing).
House was £121k but now not sure, probably around the same, say £130k max.

Problem is, my 'other' debts, which are in my sig and being slowly whittled away, never the less my total debt is around £170k!!

Now, I get a letter from NRAM saying my fixed rate is ending in February, and thankfully my payments are (likely to be) going from £831 to £729 a month (yes, I've been paying 5.99% all through this lovely low interest period the last few years). Then there's a warning saying since nationalisation they're no longer in a position to offer rates to retain customers, and now is a good time to look to other lenders deals before the base rate rises!!

So, is there any chance I would get a remortgage? Would I have to get a loan for the unsecured bit (at higher interest) and remortgage the secured bit?
My only other choice is either continue paying as I am and pay more on the mortgage, or add that extra money to pay off my 'other' debts quicker. I'm thinking the latter option is the best one as I'm currently paying over £800 a month on those debts!! Freeing up that money (should be 3 years) would resolve any concerns over mortgage rises!

Yorkie1

I am not an expert but I should think you will find it difficult.

Ignoring the unsecured part for a moment, a remortgage normally requires maximum 90% LTV so your house would have to be valued at no less than £125K.

However, at 90 % lenders are quite picky, and with nearly £60K other debt (including the unsecured loan) your credit scoring by the lender is likely to cause you difficulties.

If you did remortgage elsewhere you would either need to repay the unsecured part or continue but at a much higher % rate - I might be recalling wrongly but I'm sure others have previously posted that it went up to something in double figures, perhaps even 17%?? You would need to check that out.

I would suggest that you may have to stay put, work on paying off the other debts. My hunch is that the highest interest rate one should be targeted first but don't take my word for it.

Have you gone onto the debt free board and posted a statement of affairs to check whether there are any other areas which you might make savings in?

tbourner

Yorkie1 wrote: »

Have you gone onto the debt free board and posted a statement of affairs to check whether there are any other areas which you might make savings in?

Oh yeah! From 2 years ago, we now have our meal planner in full force, spending diary for the last 15 months, full budget of everything for the last 2 years, all thanks to the DFW board. That's how we're paying off nearly £1000 a month from my 'other' debts at the moment.

tbourner

UPDATE: Austin and Wyatt just phoned me saying they wanted to arrange a chat now my fixed rate is coming to an end. They reckon NR will split the together loan so I can remortgage the secured part and keep the unsecured loan with them at a slightly higher interest rate (not sure how much that will be!) allowing me to remortgage to someone else, possibly on another fixed, or at least on a better rate.

Do we think that's likely?

beecher2

I can't see it - your LTV is going to be high, even without the loan. With that level of debt, I can't see another lender giving you an offer so I have to agree with Yorkie1.

tbourner

Hmmmmm, I think I'll go meet them and see what they have to say, maybe take my SOA or part of it. At least if I know what my best options are regarding interest rates, fixed rates, set up fees etc. I'll know the best option at the time.
Obviously no-one knows what interest rates will do in the next few years but if they offer me a fixed rate for 3 years at 1% more than a tracker with a £500 fee, it's probably not worth doing unless rates go up by 1% each year or more.

tbourner

She said she'll look around for me and see what I could get, she was optimistic as we earn a lot, her computer said £151k was borrowable and that included taking my other debts into account!! Who knows.
She did however say my £29k loan with them would go from 5.99% up to about 12%!!!! Meaning around £130 a month more on that, so not much space to adjust the mortgage figures!