My poor wee girl is in trouble! mortgage advice needed

openside50

My daughter is married everything going well till this recession arrived since which time she and her husband have got into all sorts of trouble

To cut a long story short instead of cutting their losses a while ago and down sizing while they were still creditworthy they have left it till they are on the verge of repossession, we are helping stave that off but they are now putting the house on the market which is good - problem

They have a £240k mortgage on a house worth £480k so after costs should have £220k-ish to put into a new house, they are looking at somewhere worth £300k-ish which would reduce their mortgage to £80k

Will their present mortgage provider transfer the mortgage to the new property even though their credit rating is shot a couple of silly CCJ's poor payment profile late with the mortgage etc?

Sorry to be so long winded

GMS

Porting (transferring) a mortgage means a new application after redemption of current mortgage.

Criteria for the lender at the time needs to be met. It's not a case of a simple transfer.

Best for them to speak to the lender and work out the options.

openside50

Thanks for the reply - thats the gist of what they have been told, merely to get a buyer find a new property then go back and apply, they wouldnt give any indication as to wether it would be successful tho, which is causing stress, the new purchase falling through etc

I would have thought that given the new loan would be for only 30% odd value of the new smaller property that would have made it a shoe in as the mortgage company (Chelsea) will be getting £160k of their £240k loan back with a much lower risk re the new lower loan

But thats just me trying to figure out what should be what

I just wish they had bitten the bullet much earlier, a commo9n problem I shoudl imagine up and down the land

_Andy_

With the missed mortgage payments the new application is almost certainly likely to be declined.

maninthestreet

Renting, for at least the short term, is probably the best. That way, their property can be sold, and the mortage debt repaid.

DannyboyMidlands

In which parallel universe is £240k of equity considered "all sorts of trouble"?!

They should just buy a cheaper house mortgage free.

Thrugelmir

openside50 wrote: »

a couple of silly CCJ's

Unfortunately letting matters reach this point. Indicates to lender a very poor attitude and responsibility to management of personal finances. Many lenders will shun borrowers until they have demonstrated that they have clearly changed their ways.

holly_hobby

Porting in mortgage terms is in relation to the transfer of the mortgage product in place (i.e fixed, discount rate etc) and NOT the finance itself .. which is subject to full underwriting as any new application would be.

CCJs are never silly - they are an order of court, and looked on dimly by financial providers, as it appears the debtors have not been able to/made an effort to maintain the liabilities, despite requests by the creditors.

It is absolutely imperative that they maintain the CCJ payment directive, as failure to do so means that the Creditor may apply to the courts for a sale order to be placed on the property, in order for the os debt to be fully redeemed. So they are quite a serious matter.

My personal advice, instead of getting themself into more debt with a new mge (if indeed possible due to the adverse credit history), they should instead use the moneys gained to settle all os debts, satisfy the CCJs, and spend the new few yrs getting back on their feet and rebuilding their credit status.

I realise this may not be what they want to here, but do hope this helps ...

Holly

MRG

Missed payments with the current lender will probably mean a decline to port the mortgage over as already mentioned.

If they do want to stay as homeowners then there's no harm in trying to get something agreed. Go to a good broker who will know the more flexible lenders to go to. The positive is that the loan to value is very good.

People have mentioned renting but if they are truly out of the woods then its just paying someone elses mortgage. Burning money in my opinion.

CCJ's once settled take approx 6 years before they go from your record, so in theory they would be renting (and probably paying alot more than a mortgage payment) for 6 years or so.

smcqis

if this is trouble dear help the rest of us! 240k to buy a house mortgage free,I would consider that very well off!

JimmyTheWig

openside50 wrote: »

I would have thought that given the new loan would be for only 30% odd value of the new smaller property that would have made it a shoe in as the mortgage company (Chelsea) will be getting £160k of their £240k loan back with a much lower risk re the new lower loan

Alternatively, Chelsea refuse the new loan and get all £240k of their loan back with no risk.

It sounds like there's many safer people to lend the £80k to. In a credit crunch (where there isn't enough money to be lent to everyone) why would Chelsea choose them?


Can they buy anything in that neck of the woods for £220k?
If so, I'd suggest they do this and then spend the next 6 years living mortgage free, keeping to their budget, paying off their debts, paying things on time and putting money into savings.
Then they should be in the position to buy what they want again with (a) a bigger deposit as they've been saving and (b) a good, clean credit record.