Remortgage help - stuck in a hole

walkabout2011

Basically my current mortgage deal expires in a couple of months. I have debts of 10,000 accumulated as a result of university after I purchased the house. I have taken up a new job which is some miles away and will be commuting with my partner as it is close by to their work. We need a new car as our current is very old, has been round the clock, has numerous mechanical issues and is really uneconomical to drive.

I'm stuck in a hole though. My partner has been in their job only a few months and doesn't get out of a probationary period until 3 days after the current mortgage expires. From then on it would take six weeks to transfer the mortgage to a different lender. We intend to take out equity in our house to cover 8,000 of my debt. However there are some issues.

Firstly, we owe around 77,000 by the end of our mortgage deal. They would only let us remortgage up to the 85,000 if we used the money for home improvements, only letting us remortgage up to 80,000 if we wanted it for debt consolidation. I feel really annoyed because if we were to release equity up to 85,000 our mortgage repayments would only be 9 pounds more a month than we pay now. I've never missed a payment on what I owe and I always overpay (I've shifted 5,000 in the past year alone off my debts, although things are slowing a bit thanks to the cost of now commuting to work). This would then mean we could get an economical car on finance which would effectively pay for itself compared to the amount of fuel we are spending now. I could then blitz the remaining 2,000 of my debt and pay it off in a matter of months.

Secondly, due to the probationary period issue, we can't do anything to remortgage to a new lender anyway until at least July .

I just feel soooo hopeless. I don't use my credit cards anymore. I've never missed payments and I work my backside off for any extra money that I can. I just wish that lenders would be willing to let me consolidate my debts as they would be making even more money off me and I can have breathing space. I've got until September when my first 0% balance transfer runs out and I've exhausted most other balance transfer cards.

Anyone been in this situation or got any suggestions?! I'm really kicking myself for getting into debt

Yorkie1

1. What are the current and the follow-on interest rates for your current mortgage?

2. What is the value of your house (realistically, comparing to recently sold similar properties)?

3. What is the combined income of you and your partner?

4. You refer to debts. Do these include late payments, defaults, CCJs, arrangement plans or similar? If so, I think the brokers on here might find it useful to have this information.

ACG

Not all lenders require you to be out of your probationary period before you can get a mortgage. Some just require you be in employment - some require you to have been there for 3 or 6 months.

I would suggest either get looking on lenders websites and looking at their criteria with regards to employment or go and speak to a mortgage broker. Other lenders may allow debt consol upto higher LTV's than your current lender.

Its very rare that there are no options especially when there doesnt seem to be any major issues (i can only go off this post though). So i wouldnt get too down just yet.

walkabout2011

Hi, Thanks for your replies everyone.

Yorkie1 - here are the answers to your questions:

1) Currently 4.99%, SVR come July when the deal ends - 4.74%

2) House is valued at 100,000. As of last week we owe 77,414, so come the end of the deal, this figure will be slightly less.

3) Our combined income is 44,000 a year.

4) My current debts are: 1 student current account - 952.88 0% interest; 1 graduate account - 1,761.59 0% interest until September 2013, Barclay's credit card - 4357.56 0% interest until October 2013 and Natwest credit card - 3660.15 0% until May 2014.

I have no CCJs, late payments, defaults or payment arrangement plans.

Yorkie1

Thanks for posting that info.

I am not a mortgage expert but hopefully others who are, will be along at some point to offer further comments.

Dave_Ham

I would fancy getting this through, subject to the exact detail.

Have a free chat with a broker and they should know where to place this.

All the best

walkabout2011

Ok, so just to update on this. I have now got 7500 as a loan from a relation to cover my debts, leaving just 2500 to pay. I am hoping to either get an additional loan or remortgage as before for 7500 for home improvements, but use the money to pay my relation back. However I rang up Santander about getting an additional loan and they did a very basic on the spot valuation of our house, stating that it's worth just 94,500. What I find confusing is that all the houses are selling for about 99000-100,000 in our area?! Would all lenders value it in a similar way?

I'm at a bit of loose end as to what to do to shift all my debts now and what would be best in terms of our mortgage

ILW

You could just pay down your debts rather than shifting them to your mortgage.