Mortgage advise for a current NRAM customer but with bad credit rating

Dave_Ham

My sensible answer was within post 4, which you seemed to have not read or it did not give you the answer you desired.

Obviously they are issues for you and therefore you thought you would test the water on the age old Del Boy "they should not have lent me the money - their fault"

No-one really bought into this so this so the toys started to come out of the pram.

Accept responsiblity, take control and move on...

Thematics

I think everyone answered the original question, you won't be able to get a new mortgage, but they didn't give an explanation why.

No-one is offering mortgages above 90% LTV, with the exception of 3-4 building societies and a few that offer new rates for existing borrowers. The 95% rates that are available are (a) only available to prime borrowers and (b) higher than NRAM's SVR which is 4.79%. This isn't the worst SVR around, although it is certainly higher than some (Santander is higher). Your repayments on £120k will be £479 per month. Once you've been with NRAM for 7 years you'll qualify for a loyalty rate which is current 4.54% and your repayments will be £454.

Your mortgage rate is lower than your unsecured credit rates so if you can, do all you can to pay those down. Look at it as a 6 year plan to clear your debt and get your credit rating back to a good score. On an income of £40k you'll be clearing £2477 per month approximately. Your wife will receive £81.20 every 4 weeks for the baby so you should have £2k left over after the mortgage payments. You may qualify for Child/Work tax credits as well.

Draw up a budget and lose anything that isn't critical if you haven't already done so. Set a budget for housekeeping each week and shop carefully. List your outgoings to keep check that money isn't being spent on unnecessary items. Check your insurances are on the lowest premium and your utilities, mobiles, phones are on the best tariffs. I'd recommend looking at Utility Warehouse but they may not take you if your creditscore is very low.

In a nutshell, you can't remortgage due to not having enough equity and other rates are higher in any case. You can't downsize as you won't have any deposit and certainly not enough to get a lower rate. Rent will cost more than your mortgage so stay put, weather the storm, enjoy your baby and love your wife. You WILL get through this and be able to move on before you know it!