Advice pls on Mortgage and bad credit

neenmarie

Hi

Just need some advice and please be kind as not sure that our options are or which way to turn and do for the best!

At the moment we have a mortgage with the Woolwich (Barclays), we are on a tracker mortgage and our rate at the moment is 0.5% so we are paying around £285 a month! Our mortgage has £63000 left to pay over 20 years but the problem is that my husband seems to have got himself into abit of debt and is struggling every month to pay them off. We don't go out or spend outr money on luxury things and he works really hard, sometimes 3 weeks in a row without a day off. Anyway he owes around £15000 on loans, cards and a catalogue. He also has a few defaults on his credit rating, 2 from 2006 and 1 from 2007 so they won't come off until 2013. I recently went to Barclays to ask for extra borrowing on the mortgage of £20000 but we got refused due to my husbands bad credit history!

My question is should we get our credit reports and take it to a mortgage broker and discuss our options, we really don't want to lose our tracker rate as its so low but then again I don't think we can carry on with the way we are struggling every month. I just thought if we consolidated our debts into the mortgage at least I would be able to see what is going on and my husband won't have the chance of missing any further payments and getting a worse credit rating than he has now. To be honest I feel totyally out of control with our financial situation as I really don't know what he owes and where and as a married couple I don't think its fair on me. He seems to be putting his head in the sand and won't open up and talk, as you can imagine i'm getting really upset and stressed about the situation. Thanks for reading x

GMS

Putting unsecured debts on to your mortgage is something which you should consider in great detail. You would be putting your home at risk in the event of non payment.

If you are struggling with the debts then even though they are unsecured there is still a risk that the lenders could apply for judgements and eventually charging orders in the event of a default.

You have tried your lender without success due to the adverse credit. This will be the case with most lenders. There are lenders who would consider previous adverse but you would lose the rate you have now which is a great rate.

One option could be a second charge secured loan. This would run alongside your current mortgage but the rates would not be like the high street lenders but it may still work out cheaper than remortgaging the full balance.

Assuming you fit criteria it could be an option for you.

Have a chat with a broker to see if the numbers stack up.

neenmarie

Thanks, it's so frustrating that we can't get the additional borrowing but I can see why they won't!

With the second charged secured loan you say the rates won't be the same as the banks, do you know roughly how much they would be if we wanted to borrow £20,000?

Thanks

GMS

neenmarie wrote: »

Thanks, it's so frustrating that we can't get the additional borrowing but I can see why they won't!

With the second charged secured loan you say the rates won't be the same as the banks, do you know roughly how much they would be if we wanted to borrow £20,000?

Thanks

It would depend on your circumstances and how long the loan was over etc.

You would need to look at the rates on the unsecured borrowings to comapre to the secured. Short term savings may look good but if you are paying over a much longer term then the total amount repaid can be much more.

You would be better getting a proper quote rather than a guess as you would then know exactly where you stood.

lindens

sorry but i think your husband needs to remove his head from the sand, get together all his paper work and between you work out how much he owes and then put together a plan to pay it off whilst your current mortgage is so low. why not head over to the debt free wannabbee board for tips and advice? You definately need to put together a SOA and work together as a team to budget.

neenmarie

lindens wrote: »

sorry but i think your husband needs to remove his head from the sand, get together all his paper work and between you work out how much he owes and then put together a plan to pay it off whilst your current mortgage is so low. why not head over to the debt free wannabbee board for tips and advice? You definately need to put together a SOA and work together as a team to budget.

Thank you and I totally agree with you, I would prefer to talk things through and pay off what we can rather than get another loan. I want to help him but I work part time as I have a child and I only have alittle a month left to support me and my son. I think I need to takje control of all the finances as he might get other loans in the future. I'm so annoyed with him because I sold my flat and put a £75k deposit down on our £169k house had he been up front we could have got a larger mortgage and cleared the debts, we would be laughing right now with the rate it is at the moment!!! I will have a look on the debt free site but it will be his money that will pay off his debts and I can't physically make him do anything! I feel really stuck and trapped and all he sayes is that I only work part time but he knows I am doing what I can as I do have my son to look after as well!

DannyboyMidlands

What will you do when interest rates start to rise?

neenmarie

DannyboyMidlands wrote: »

What will you do when interest rates start to rise?

We are always watching and listening to the bank of England and their rates, I don't think they will go up much by next year. As soon as we hear wind of anything we would go on a fixed rate instead.

CautiousWithMoney

How has he got himself into all this debt, what has he been spending it all on!!?

You MUST get the root cause of this problem or he is likely to get into the same trouble again further down the line

SouthCoast

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