Husbands mortgage declined due to my DMP - help please!

barnabycarebear

Hi all,

I'm a newby to the site, but I hope that someone will be able to offer some sage words of wisdom.

My husband is currently on an endowment mortgage with 11 years left to run on it. After receiving letters from the endowment company his policy remains on amber alert to have a significant shortfall. We know this has been an issue so he wants to change his mortgage over to a straight repayment mortgage for the remaining term, taking out a bit extra to do some much needed work in the house (think giant hole in roof, 15 year old boiler with more leaks than pipes!) The monthly repayments are affordable, there is plenty of equity in the house, works full time, no other outgoings in terms of loan/credit card etc. However the application was referred to the underwriter and he received a call this morning to say it's been turned down.

When I went on maternity leave back in 2009 I struggled financially to keep up with repayments on credit cards, loans etc and the stress got to the point that I entered into a DMP with CCCS. The finish date on my plan is estimated to be 2018 and I know my credit rating will be shot for at least another 6 years after that!

I feel absolutely sick to my stomach that a decision I made has had such a catastrophic effect on my DH's finances.

To get to the point does anybody know of companies who would be more lenient and accept him for a mortgage application? We're looking round for a decent mortgage broker who can offer us some advice, but my poor DH is so dejected by this refusal that he's unwilling to even contemplate a broker if it's likely to be bad news from them too!

So any success stories from DMP/Mortgage applicants, I'd love to hear from you.

Thanks for reading, sorry it was so long!

Dave_Ham

Ok, there potentially could be solutions depending upon the detail; so:

How much is the current mortgage value?
Approx. property valuation

You really need all of your Experian, Equifax and Call Credit files as need to understand how the DMP is translated on these and importantly if and when the lenders defaults were placed on the files.

With equity there is almost always a solution, the skill of the broker and the specific details will dictate the rate achieved.

barnabycarebear

Thank you so much for the prompt reply :beer:
His current is with the Halifax and stands at £40,500 - we had the house valued last year at £95,000 but the Halifax used whatever calculation they go with and went with £88,000 (3 bed terrace).

They have said they would swap him over to a repayment mortgage at the £40,500 figure with no problems, I think it was that he wanted to borrow an extra £22,000 that initially caused a problem as raised it over the LTV and was referred to the underwriter.

If we really cut back on the work needed then we should be able to get it done for under £10,000 (the extra would have been to extend our tiny kitchen back and add a downstairs toilet). Sorry I'm waffling again lol. I'll get the credit files ordered and post back more info.

Thanks again for your help.

Dave_Ham

I would expect there to be a solution on these numbers provided.

Credit files and a good broker should at least give you a detailed set of options.

amnblog

Dave is right.

There seem to be a number of ways to deal with this issue.

If you need the work done and the extra cash your husband will have to face up to seeing a mortgage broker.

If you can live without the extra cash can you not just overpay the current mortgage every month (assuming there are no penalties in doing so) which will give you the same effect as the repayment mortgage?