Is There No Hope? Consolidation Re-mortgage

UpTheCreekWithoutAPaddle

Hello everyone and thank you for taking time to read this.

I fully understand the warnings about consolidation, but I feel this is the best option for me. I'm hoping someone may be able to give me some guidance.

My situation is all my own fault, and I deeply regret getting to this point. In a nutshell:

Property value = £260,000
Current mortgage = £140,000
Credit card debt (which I want to consolidate) = £55,000
Total re-mortgage needed = £195,000
My salary = £52,000 per annum employed.
Wife salary = £1200 per annum part time employed.
Age 52
Credit problems: 1 x "arrangement to pay" December 2011 lasting 1 month only (was actually a late payment but Cahoot insisted on recording and arrangement to pay). 2 x late payments around the same time.

Wife no credit problems.

Any pointers / guidance / recommendations very very gratefully received.

Kind regards

Paul.

Dave_Ham

Hi Paul,

You already make the point recognising the true cost of consolodating the unsecured to secured, so will not major on this.

I would expect this to be achievable for sure, given the information provided.

It would be prudent to obtain your Experian, Equifax and Call Credit files and then put them in front of an experienced broker.

All the best

droiderm

This might be a bit rich coming from me.
One of the hard lessons I learnt was consolidating is an easy way out. You can do it once, then maybe do it again, if your really lucky you can do it again. But unless the original problem is solved it's only going to go one way.

Have you considered biting the bullet and not consolidating? i.e. have a good luck at your finances and try and change your lifestyle and start paying your debt down?

This might sound like some righteous guy on a forum, but trust me, it's from bitter experience. From my past, I would have consolidated then felt the relief, but in reality you will probably feel worse off because of your extra mortgage payments, and your overspending. At some point your going to have to look at what you spend. The last thing you need is to be coming back here in a couple of years time asking the same thing, when you may not have an option. The penny tends to drop when you have no more options.

Please consider going to the Debt Free Wannabe board before taking what might feel like the easier option.

UpTheCreekWithoutAPaddle

Hi Dave,

Many thanks for your speedy reply. I have been using a local broker but I am not convinced of her abilities (she went to the Woolwich and I was turned down), I guess I had better search out an experienced broker, I just wish I knew how to approach them! I have done the search on "unbiased" and it does present a list. I guess it's just a matter of picking at random and phoning. I have all the credit reports in my possession so that's a start.

I have to get this resolved as it is quite literally running me into the ground.

Thanks again.

Paul

Dave_Ham

I am not here to judge, rather help. Droiderm does make some valid points about attacking unsecured debts as it would save you in the long run.

I do not think Woolwich was a sensible choice as the AP marker is a killer for them. It would be well worthwhile chasing Cahoot under data protection and threathen the ICO, as for a missed payment you can mitigate but the banks automatic credit scoring systems mark down on AP's on file hugely.

I still believe subject to fuller information, that you can get this remortgaged. Goes without saying and easy for me to say, but try not to miss any payments prior to or going through the remortgage process.

If you cannot get a recommendation from friends and/or family, would call up a few brokers from Google and ask a few questions in advance of meeting them to get a feel if they want the business, discuss fees/costs and check there experience and if you could build a relationship.

Good luck

UpTheCreekWithoutAPaddle

Hi "droderm",

Yes I understand that it's a hard lesson, and boy do I feel seriously depressed about my situation. I have looked at trying to budget my way out but I would barely have anything to live on as the CC bills are so high (I have 2 kids also). I checked the DMP route but that would destroy my credit rating and worse still (which I feel so very guilty about) my wife's too. With the help of the DFW board I am positive I would not allow this to happen again, I could not take the shame or depression I am experiencing at the moment again.

thanks for your kind words.

Regards

Paul

droiderm wrote: »

This might be a bit rich coming from me.
One of the hard lessons I learnt was consolidating is an easy way out. You can do it once, then maybe do it again, if your really lucky you can do it again. But unless the original problem is solved it's only going to go one way.

Have you considered biting the bullet and not consolidating? i.e. have a good luck at your finances and try and change your lifestyle and start paying your debt down?

This might sound like some righteous guy on a forum, but trust me, it's from bitter experience. From my past, I would have consolidated then felt the relief, but in reality you will probably feel worse off because of your extra mortgage payments, and your overspending. At some point your going to have to look at what you spend. The last thing you need is to be coming back here in a couple of years time asking the same thing, when you may not have an option. The penny tends to drop when you have no more options.

Please consider going to the Debt Free Wannabe board before taking what might feel like the easier option.

Conrad

It's a difficult one this because of the size of the card debt. It will come down to underwriter discresion (be wary of brokers claiming the underwqriter is a mate - oldest line in the book and NEVER true).

What you might find is underwriters taking the view you have a propensity to get into lots of debt which for them is a difficult point in case you get into mortgage arrears and more debt subsequently.

Normally you'd look to try the main lenders, people such as Halifax first.
See how that goes.

A lender such as GE money or Precise can consider such cases (I've only had a skim read though).

So don't believe any broker indicating this will be a sinch. It might be, but that will be more down to luck than judgement.

The best brokers are the ones that assume everything will be hard - this quality helps them spot the problems. Maybe seek out such a broker. Beware of car dealer salesmen type borkers that use phrases such as 'this is every day fodder for me'. They are nothing but crude salesmen.

UpTheCreekWithoutAPaddle

Thanks for the reply, Conrad.

I have so far avoided mainstream lenders (except the Woolwich through a broker) as I'm in fear of too many footprints on the credit file, but I may well have an investigation into the Halifax. I wonder how many "hits" are acceptable so to speak on your credit record?

Thanks again,

Regards

Paul

Conrad wrote: »

It's a difficult one this because of the size of the card debt. It will come down to underwriter discresion (be wary of brokers claiming the underwqriter is a mate - oldest line in the book and NEVER true).

What you might find is underwriters taking the view you have a propensity to get into lots of debt which for them is a difficult point in case you get into mortgage arrears and more debt subsequently.

Normally you'd look to try the main lenders, people such as Halifax first.
See how that goes.

A lender such as GE money or Precise can consider such cases (I've only had a skim read though).

So don't believe any broker indicating this will be a sinch. It might be, but that will be more down to luck than judgement.

The best brokers are the ones that assume everything will be hard - this quality helps them spot the problems. Maybe seek out such a broker. Beware of car dealer salesmen type borkers that use phrases such as 'this is every day fodder for me'. They are nothing but crude salesmen.

Dave_Ham

There are no hard and fast rule with regarding to the number of "hits"

Conrad has speculated before that he personally is not worried about the number of rejections and impact on credit files.

I am a bit more aware, although there is no 2 or 3 rejections and it affects other lenders credit score rules; I think it is better to approach the right lender correctly once.

If you let a true professional look through your credit scores, they will know if Halifax is viable or not. You may save yourself time and money in the long run approaching one broker and letting them do the hard yards with the lenders.

Best of luck

Thrugelmir

UpTheCreekWithoutAPaddle wrote: »

I fully understand the warnings about consolidation, but I feel this is the best option for me. I'm hoping someone may be able to give me some guidance.

I would seriously recommend selling up to clear your debt. (Without passing any personal judgement on the reasons for your unsecured debt). Underwriters would be be very wary of consolidating that amount of debt. If nothing else it gives you an easy way out. You will have learnt no lesson. Statistically people in your position are highly likely to reoffend. As that's human nature. People's attitude towards risk and prudence is mirrored in the way they manage their money.

Even after clearing the debts from equity. You are fortunate enough to have a sizable deposit left. Along with having a reasonable household income. So there's no need to despair.

A DMP would destroy your credit rating. So not advisable if at all possible.

UpTheCreekWithoutAPaddle

Hi Thrugelmir and thanks for the comments.

I understand what you are saying, but deep in my heart I feel I would rather struggle with the DMP than sell up. It would break my heart to sell the house and goodness knows what it would do to my wife and kids.

I even had a dear friend and colleague (Director) at work (he's well off) offer to clear the CC debt and for me to repay him "later" when I could remortgage to the 200k but an advisor said unwise as there are no guarantees I would still get a mortgage, which of course is true.

Slowly beginning to loose hope really.

Thanks again,

Kind regards

Paul

Thrugelmir wrote: »

I would seriously recommend selling up to clear your debt. (Without passing any personal judgement on the reasons for your unsecured debt). Underwriters would be be very wary of consolidating that amount of debt. If nothing else it gives you an easy way out. You will have learnt no lesson. Statistically people in your position are highly likely to reoffend. As that's human nature. People's attitude towards risk and prudence is mirrored in the way they manage their money.

Even after clearing the debts from equity. You are fortunate enough to have a sizable deposit left. Along with having a reasonable household income. So there's no need to despair.

A DMP would destroy your credit rating. So not advisable if at all possible.