How easy will it be to get a mortgage?

rachanddom

Hi everyone

I'm a total newbie but need to "sheepishly" ask for some advise! We were lucky to pay off our mortgage a few years ago but are now in a bit of a pickle financially. Jobs have changed and we are not earning as much as we used to.

We took out a loan with Tesco which has another 5 years to run. That was for a car and debt consolidation.

We also owe money on 3 credit cards and are finding it difficult to pay much off.

Wondered about the possibility of applying for a mortgage again which would be at a much better rate and clearing off these items. Would be looking to borrow about £35K but our house is valued at £230 - £250K. I assume that would be plenty of collateral for any lender. How easy do you think it would be to get a mortgage? Any other suggestions would be gratefully received. Thanks

GMS

Should be doable subject to income.

Transferring unsecured debts to secured needs consideration though. Short term gain in terms of monthly payments but total repaid generally much higher, plus the chance of losing the property in event of default.

Speak to a whole of market broker. Not all lenders allow debt consolidation and an unencumbered property can cause more complications

Thrugelmir

How much do you owe on the mortgage and the unsecured debt?

rachanddom

Don't owe anything on the mortgage. We have a Tesco loan of about £23,000 plus owing about £12,000 on credit cards.

rachanddom

Thanks GMS. Sorry to show my ignorance but what is a "whole of market" broker?

Thrugelmir

rachanddom wrote: »

Don't owe anything on the mortgage.

Ah missed that.

To the underwriters the amount of security you have on your property isn't the issue. It will be your inability to manage your personal finances.
Together with the likelihood that you'll re-offend in the future. So some lenders may prefer to keep you on unsecured rates which reflect the risk of default.

rachanddom

Oh dear thought I had an easy solution there but it appears not! Thanks everyone for the advice. Guess I'll just have to knuckle down and make some serious savings to try and pay off the cards quickly.

Would it be worthwhile talking to Citizens Advice Bureau to see if we have any other options?

Thrugelmir

rachanddom wrote: »

Would it be worthwhile talking to Citizens Advice Bureau to see if we have any other options?

Downsize your property?