Require second mortgage

vindaloot

Hi, I need some advice please.

I already have a mortgage outstanding at 106k (monthly payment is £650) but looking to get a new mortgage on a house priced at 100k. I have 10% deposit for new purchase. My income is 46k pa. Issue is I have recently defaulted on a HSBC loan value 3k - I have setup a payment plan with the collection agencey and paying £50 a month. I also have other credit card debts approx 6k with Barclaycard, egg and lloyds tsb.

I've already been refused by HSBC for the new mortgage application citing my credit rating as that's the bank I normally bank with.

I would cover original mortgage payment by renting my current house to my sister, so I feel I can afford it but is there any bank out there which will approve my mortgage with my circumstances.??

Thanks guys..!!

[Deleted User]

I would say you need a good broker, I have had some conversations on here with various people, you may need to change your post title to attract them to your post, they will charge you but may be your only option. You can't afford for everyone to search your credit report so you need to get it right the next time you apply for something!.

HTH - Remember everything is really hard to obtain now so just keep trying!

Thrugelmir

If you can't afford to repay the loan how are you intending to fund a house move?

Cut back on your outgoings and sort out your debts. While you are in a payment arrangement there's little possibility of obtaining a mortgage of any kind.

vindaloot

Changed post title.

Assj can you provide any broker contact details?

Beckyy

You would have to seek consent to let from your current mortgage provider to let your house out. This will at least have a fee, if not a raise in interest rates so you would need to bare this in mind when it comes to the amount of rent you charge. You would also have to declare any rental income, for tax purposes. You will also be the landlord, and will incur any costs associated with that too.

Mortgages are based on affordability, so if a company doesn't think you can afford the repayments on both mortgages and your debts and other commitments then they won't give you one.

Is there a reason why you want to do this instead of just selling up and moving? I would really recommend paying your debt off before taking out another mortgage.

GMS

OP with a recent default you will have no chance of a 90% mortgage.

Why on earth did you apply to HSBC? If you loaned a friend £10 until next week and they didn't pay it then came back in 3 months and asked for a loan of £1000 what would you say? You defaulted on 3k with HSBC then asked to borrow 90k. Madness. They are the pickiest lender at the best of times never mind with your track record.

Clear the default as soon as you can. You would need a 20% deposit as an absolute minimum and a further amoutn of time since the default.

Dave_Ham

To be fair GMS summed it up perfectly..

I would only add that if you are married, living with partner etc. and it was not a joint loan default you may be able to get in single name...

There are many considerations here, find yourself a good broker though...

Just so there are no false hopes, I deal almost exclusively deal with adverse credit mortgages and I would not get a 90% with a recent, unpaid default....

System

You will need to ask HSBC permisson to rent your house out on an assured shorthold tenancy, they may refuse especially as you have recently defaulted on one of their products.

They may charge and also they may put the interest rate up as the original mortgage will have been given to you on the basis that it was going to be your home. Where a property is rented it becomes a commercial venture hence the possible interest rate hike.

vindaloot

My partner was not on the defaulted loan. I think I will try to get the mortgage on my partners name as she has a clean credit history. Cheers guys..!

Thrugelmir

vindaloot wrote: »

My partner was not on the defaulted loan. I think I will try to get the mortgage on my partners name as she has a clean credit history. Cheers guys..!

Still doesn't help with obtaining consent to let on your existing property.

Shame your partner didn't help you from not defaulting by lending you some money. .

GMS

vindaloot wrote: »

My partner was not on the defaulted loan. I think I will try to get the mortgage on my partners name as she has a clean credit history. Cheers guys..!

Using your funds as a deposit? Issues if you are to reside with many lenders