Remortgage with bad credit question, help appreciated

lilylu

Hi all, I'm hoping someone might be able to advise. I have credit card debts (one old, one more recent, now at £2226 and £2040) which I am now paying off. I have a mortgage of around £35k which I've always paid on a house worth at least £90-100k. I now earn £21500pa.

I'm looking to raise some money for a car and I thought the most sensible way to finance it would be through my mortgage, but I realise this might not be possible because of the credit card debts. I guess two questions: Is it even worth contacting them, and more importantly, would any credit check my mortgage company ran be likely to negatively affect my existing mortgage?

Thanks in advance.

GMS

If the credit cards have been maintained satisfactorily then they should not stop any loan on their own. Affordability would need to be passed.

Paying for a car on your mortgage may look good in the short term but in 5 years time when the car is possibly gone and you are still possibly paying for it the idea could look daft.

Could you not get a loan or finance for the car?

lilylu

My credit card debts are defaults. The first was originally £6000, now down to £2226, the other I'm still in the process of sorting out (it's a long story - I asked for a breakdown of charges and a settlement figure, they're stalling). Before and during these defaults I always paid my mortgage and my last car was on finance with no missed payments. My financial situation is much better now and I'm trying to sort things out. Do mortgage companies keep an eye on changes in credit history - my main worry is an application for additional borrowing might flag up my defaults and give them the jitters over the mortgage I already have and am paying?

lilylu

Sorry, one more thing. I could apply for finance but doesn't applying all over the place affect your credit rating. If I do this and am turned down then that will look bad won't it? I figured the mortgage company know me, know I've never been in arrears so might be more sympathetic... or maybe it doesn't work like that?

Thrugelmir

Mortgage lenders on the whole will not advance further funds in instances where it is obvious personal financial matters are not under control. The lender may well take the view that the purpose of the advance is not to purchase a car.

lilylu

I'm not sure I understand - what would they think it was for and would it make a difference if they're not comfortable lending anyway? I guess, if it's down to credit scoring rather than looking at the good payment histories then my chances of raising funds through finance or a loan either are also not good?

shoppi

Had a similar experience recently where I was refused. Basically on affordability. Although I could technically afford the payments they decided that due to my current level of unsecured debt (i.e. credit cards) I was too risky for a re-mortgage. Unfortunately a good payment history with an individual company doesn't count for much if you have defaults or too much debt as they will credit check you anyway