Need to remortgage ASAP- cant get good rates!

couteaux

Hi All,

We've had our mortgage with IGroup for nearly 3 years (at the end of this month) We rushed into a bad deal (as we were about to lose the house as proceedings were taking so long) which now has us at 6.25% and paying nearly 1200 per month for an 180000 mortgage. We are on a tracker rate with an early redemption of 5K if we get out of the deal before 5 years (could be 6, can't quite remember)

We have never paid late and OH has a flat he rents out (after paying the flat mortgage, there is around £200 extra from the rent) I am on 28k per year and OH around 20K

The house is now worth around 250K

I have around 20K I can sink into the house mortgage to bring down the payments a little - would this be wise?

We have tried to remortgage with a couple of different lenders but haven't had any success. On paper, we cannot afford this house, but we pay every month. I don't think they would take the flat income into it when we tried. We are paying this mortgage fine but it is obviously way more than we should/could be paying and with another baby about to arrive we really want to get a better deal so that I can afford to stay home a little longer and keep a roof over our heads.

Does anyone have any advise at all? I have asked one of Martins recommended brokers (L&C) to call us today, but also wondering if anyone has any pearls of wisdom to share?

Huge thanks in advance!

couteaux

silvercar

why have you been refused? from your figures an income of £48k should be able to service a mortgage of £180k. Do you have a bad credit rating or other debts to pay?

couteaux

Hi silvercar,

I think the last refusal could have been credit rating based. It was a total mystery as I had no other debts, pay everything off in time etc. I think too many mortgage searches may have contributed. We've both since registered with experian and have fair/good ratings. I don't have any loans, outstanding CC bills etc. OH has some CCs but all manageable.

Hopefully now that our credit ratings are better, it could help!

movieman

from your figures an income of £48k should be able to service a mortgage of £180k.

Banks are getting loaded up with bad debts, interest rates are rising, repos are rising, bankruptcies are rising, and no-one would have been able to borrow 180k on a 48k combined income until recent years. Credit is only likely to get tighter from here on; the banks have lent to anyone with a pulse for the last few years and are probably going to over-react in the opposite direction now... that's one of the reasons why we get booms and busts.

herbiesjp

Are you saying that you want to get out of the mortgage even though you have the penalty to pay? What lenders have you applied to and been turned?

I would suggest you not do this any more as it will harm your credit file if they have been running credit checks against you

Have they said why they have declined? Have you got a copy of your recent credit report?

MortgageMamma

Have you used a broker or tried to do this yourself? It would not be wise for you to apply for any more mrotgages as you can damage your credit rating further. Nobody on here can recommend the right lender for you based on what is said on an internet forum. You would be wise to contact a whole of market broker and talk your situation through with them, that way there is more chance of success - it may even turn out that financially its better for you to remain with igroup until the early repayment charges are finished

couteaux

Hi herbiesjp,

Thanks for your message
As soon as I checked my report I stopped all mortgage applications until we could find a broker we were happy to try, my rating has now improved as has my partners. We definitely want to get out of the mortgage as we feel even paying the 5k will still have us in a better position financially as we also wish to reduce the years from 30 - 25.

My partner did most of the applications, but from memory, the ones we tried were Halifax, Northern rock, ALLIANCE & LEICESTER. The last application refusal was credit rating based I believe.

Last check on the credit rating was excellent for partner and fair for me.

Thanks again

couteaux

Thanks for the advice MortgageMamma. We're expecting a call from London & COuntry tonight, so hopefully we'll be able to work out the situation with them (fingers crossed)

MortgageMamma

couteaux wrote:

Hi herbiesjp,

Thanks for your message
As soon as I checked my report I stopped all mortgage applications until we could find a broker we were happy to try, my rating has now improved as has my partners. We definitely want to get out of the mortgage as we feel even paying the 5k will still have us in a better position financially as we also wish to reduce the years from 30 - 25.

My partner did most of the applications, but from memory, the ones we tried were Halifax, Northern rock, ALLIANCE & LEICESTER. The last application refusal was credit rating based I believe.

Last check on the credit rating was excellent for partner and fair for me.

Thanks again

You really need a full assessment from a broker, they need to look at your credit report, income and outgoings, bank statements, and work out if swapping this deal is good for you. It might turn out that the early repayment charges AND OTHER COSTS cancel out any savings you may make by remortgaging. Do you need to raise extra capital?

MortgageMamma

couteaux wrote:

Thanks for the advice MortgageMamma. We're expecting a call from London & COuntry tonight, so hopefully we'll be able to work out the situation with them (fingers crossed)

Hi There

Make sure L&C do not credit check you if you have your reports email them across to your allocated broker. It would also be worthwhile getting the opinion of a couple of other fee's free brokers but again make sure you stipulate no credit checking. It has been known, and quite recently at that, for London and Country to recommend something more expensive than is necessary

couteaux

Thanks MortgageMamma. Our main concerns for remaining in the current deal are the rises in interest and the fact I will be on maternity leave soon. We really would prefer to be in a fixed position. If we could get a lower rate, the savings each month could mean I could afford to have a little more time off work. As you've said though, we need to go through all this properly with a broker to see exactly what we can do in our situation.

Thanks all for your help.

Couteaux