Advice on remortgage please?

thaGeek

Hi
I currently have ajoint mortgage (myself and my wife) with GMAC RFC.
The house was a right-to-buy council house that we got for £27000.
We borrowed £37000 from GMAC over 25 years.
That was 3 years ago although we have lived there for over 7 years.
House value is approx £120,000
Our combined income is £47,000

We also have a secured loan of £15,000 and other loans totalling another £15,000.
Considering we have some bad credit history (1 or 2 settled defaults) and have had trouble getting finance in general, what is the likelyhood of the following?
I'm looking for a remortgage at the same or better rate than we are on at the moment (which I believe to be average), hoping to borrow £80,000 in total to consolidate our loans and have some cash leftover for home improvements.
I've not approached any high street lenders as I doubt that they would help considering our past credit, I have however contacted London and Country requesting a call back but that hasn't happened for some reason.
Any help/direction/opinions would be very much appreciated.

Thanks

herbiesjp

What rate are you on at the moment?

You should be able to find a re-mortgage easily, however your credit history may impact on what rates are available.

A good broker will always sound out high street lenders first for you, to see if they can get you to fit standard criteria otherwise you may have to look at slightly higher rates

Was the pre-emption period on your Right to Buy 3 or 5 years?

thaGeek

Current rate is 6.7% and I pre-emption period is 3 years as far as I am aware, hope I am right!

Edit: Have just checked with our council website and pre-emption was changed to 5 years in Jan 2005 so mine is 3 years, had my mortgage for just over 3 years now.

herbiesjp

As long as you are out of the pre-emption period you should be fine to look at what you want to do.

Just as long as you understand the implication of turning unsecured debt into secured, and paying interest over a longer term

You could get better than that rate, but it will depend on the state of your credit history, so I would suggest getting an up to date copy from Equifax or Experian and running it past a fee free whole of market mortgage adviser.

Don't get taken in by these companies that that "specialise" in mortgage for bad credit, as you can get the same deals from any good broker and not pay hefty fees either. As said previously, a good broker will also look to get your mortgage placed on high street first if at all possible

HTH

thaGeek

Thanks very much for the information. Incidentally i have never missed a mortgage payment so would consider approaching my existing lender other than the fact that GMAC RFC appear only to deal through advisors and not directly with the borrower. As for the consolidation issues, the only way I can look at it at the moment is that our monthly outgoings mean that recent payrises that myself and my wife have got are not improving our quality of life whatsoever, and the 2 large loans that we have totalling £27k were both taken out a high rates (because of credit rating) with the intention at the time of consolidating by means of a remortgage this year.
Obviously we have made £90k+ on our purchase already in just 3 years and even if we increase mortgage to £80k, it is far less than the average borrowing (i think).

herbiesjp

Not having missed any mortgage payments is good news and yo are right about Gmac only dealing via brokers, however they would not be top of the list in terms of high street rates and so shopping around will be a good idea

Nothing wrong in consolidating, and it sounds like you have given it thought, so you are making an informed decision rather a than a jump into the unknown