Help! Mortgage with bad credit rating

GeorgieGirl

I am trying to remortgage in order to pay off a couple of credit cards. My current mortgage is with the Abbey and I applied to borrow extra funds to consolidate the debt and they have turned me down as I failed the credit check. I assume I failed because i have not been meeting the minimum payments on the credit cards. I wanted to borrow £35K which would pay off the cards but leave me with part of a personal loan, which I am happy to do as there is only 3 years left on this.

I have £100K equity in my flat, my current mortgage is £116K, however the flat was recently valued at £215K+. I have been in contact with the CCCS regarding a debt management plan but I would like to avoid that if possible. If I was able to remortgage I can more than afford the repayments once the cards are paid off. I earn £37,100K.

Any ideas or suggestions of mortgage companies for people with bad credit ratings?

I am quite desperate as one of the cards is with MBNA and they are truly awful, they can be quite harrassing, the other is with Sainsburys and I can't praise them enough for their understanding.

Thank you.

opinions4u

See a broker.

I think the most likely outcome is "no chance" but the equity in the property may give you vague hope.

koexelek

I'd say a secured loan might be a better option than a total remortgage.
Any lender that will do a remortgage will charge a horrendous rate, so probably better to have the mortgage on a reasonable rate and a secured loan on a high rate , which it will be)

You might even struggle to get anything at all though... as lenders are very unforgiving of any missed payments these days

ILW

£37k salary and cannot pay minimum on CCs. Think you need to address your spending.

geoffky

you look like someone who has planned for the house price rises and the equity to bail you out and as so many have found out the banks are no longer playing that game any more and most people do not have a plan b.....you are not alone..

noodle

If it helps at all, I wouldn't lend you any money. You have high-interest unsecured debt worth almost as much as your annual gross salary, and the outstanding mortgage is more than three times salary - which is as high as anyone should want it to be.

Your equity is helpful, but you should probably see that as your security - not your way out. Also, if the valuation was done by an estate agent then it's at least £30k overstated (if done by a surveyor for a mortgage company, then it's probably ok).

As another poster has said.. you need to sort out your spending. How long did it take you to build up the CC debt? Have your earnings been at their current level (or close) all along? Get yourself over to one of the boards where people can help you budget and pay down the credit cards. Start getting that right so that a lender can at least see you as someone who has stopped the leak and is excercising good spending discipline. Nobody will lend if they think you're just going to cash in on your equity and then carry on in the manner that led to the problem in the first place.

I don't know all your circumstances - particularly if you have dependents to worry about - but I had comparable debt and earnings levels a few years ago, with no equity to cash in, and found it surprisingly easy and enjoyable to adjust my lifestyle and get myself sorted out. I was lucky in that I realised I had a problem before my debt got expensive - and it'll be harder for you because you're evidently racking up a lot of interest.. but you can do it and there are loads of people on these boards who have done it and will help you.

All that said, do speak to a mortgage broker and see if you have an option to cut the cost of the borrowing to make it easier to pay off... but even if you can remortgage, you still need to control your spending and try and get the additional borrowing cleared.. unless you want to spend 25 years paying that £35k back!