What to do?

KellsBells

Hi all,
I'm after a little advice from people in the know. My circumstances are as follows.

We have a mortgage on a two bed house, but have just had a baby (my third child now) and therefore need to move to a bigger property asap. The house is worth about £80,000 in my opinion, and the mortgage balance is 71,000. I've been looking for a while, and the sort of property I'm after is going to be about £110,000.
Now, this is the bit I need advice one - our current mortgage is with GE, a sub prime lender, and although my recent mortgage payment record is impeccable, this wasn't always the case. My credit file is shot to pieces with 3 CCJ's, various defaults, and missed payments on various things, and the CCJ's have another 4 years to run on my credit file.
My husbands and my salaries are not great, but we've been managing our mortgage payments of £430 for a number of years, and could comfortably manage up to £550.
So, what options do I have? Am I likely to be able to move my existing mortgage across to a new property and borrow and extra £30k? Whats the best way to approach this when your credit is in a very bad way?

Any advice very gratefully received, I'm really stressed about the lack of space we're now faced with. Thanks.xx

opinions4u

1. You will need a deposit of at least £11,000 plus your moving costs. You only have equity of £9,000.

2. I think the CCJs will scupper you. How much are they for? When? are they satisfied? If you couldn't afford the bills 2 years ago a lender will ask how you expect to afford them now and in future.

3. Stretching incomes combined with CCJs and small deposit will make getting a mortgage offer even less likely. What are your salaries?

4. You say you can afford £550pm. My area has good quality rental properties for this. If you do borrow, how will you cope when mortgage rates go up?

From the limited information provided, I don't think you're going to get what you want.

Bigger deposit (25% or 40%). Longer gap from CCJs and defaults (maybe as long as 6 years). All bills paid on time in the interim. These things will help.

But sub-prime is not where lenders want to be these days. They are declining better quality applicants.

Sorry.

suburbanwifey

I don't think it is going to be possible at all to remortgage to a bigger home at all, sorry.

KellsBells

Hi there,

Thank you for reply and advice.

We'd be able to get a few more thousand to cover EA & sols fees, and add to the equity for a deposit of 11k. It'd take us a while but we'd be able to.

The CCJ's were not as a result of not being able to afford - they were a case of head-in-sand disease. One is a funeral bill (for my dad's funeral) - not yet satisfied - for £1200. One was a store card which is satified and the other I have no idea, a parking fine I think?.... All in all they were about £2,200 in total.

Our salaries combined are just under £30,000.

Renting in our area is absolutely not an option - I'd barely get a 2 bed around here for that amount. Plus it's so hard to get on the property ladder these days, I'm reluctant to lose that and just rent.

Can you think of anything else I could do? xx

Thrugelmir

Scrimp and save any money that you can. Then use it to pay down the mortgage. Saving is the way forward.

Why wasn't your Dad's funeral expense settled from the Estate?

KellsBells

Hi,

the funeral costs weren't covered as he didnt have an estate. No assets, no will, and I was next of kin.x