Need advice regarding re-mortgage

andy54199

Hi all,

1st time user here (and no expert!!!))).......My dilemma, we applied to HSBC for a re-mortgage of our current house. We wanted to borrow more to pay off 4 credit cards, £16,000 more. Thus paying out less per month.

Now because of our credit rating (good, but at the limit of borrowing), we were refused. Even though we told them what we were planning.

We thought, fair enough & decided to get our head down for a year, pay off as much as possible and try next year.

We have now been offered the money (£16000) from a family member with a view to pay off our credit cards first, then apply for the same amount, then pay them back the money.

My question is this, I know there are no guarantees, but would this work? As we would hate to be in a position were we've paid off the cards & then not manage to get the mortgage and cannot pay them back.

please advise

many thanks

Andy:)

andy54199

Update- just called HSBC and was told they would only lend 80% LTV even though I went through 1 1/2 hours of applying on the phone going up to the credit check, with the guy saying we could have up to 90% LTV!!!!!

So HCSBC is out.........need advice on who would accommodate a 90% LTV re-mortgage!!!!!

Please advise

Andy

kingstreet

Capital raising at 90%, there aren't many.

I suggest you need a broker for this. A whole market broker would give you a run at the commission paying lenders and you'd need to separately research the direct-only lenders, such as HSBC you have already been declined by.

andy54199

Thanks for the prompt reply......we have now had a proper look at our debt as we have had latest statements......

Outstanding mortgage £129784.72

Total credit card debt £13862.18

House valuation £167000

Working it all out in my basic maths, we need to borrow 86% LTV.

Because, as said above, we are not really consolidating debts because they will be cleared before we apply. What would be the criteria with a Re-mortgage with extra borrowing. Seems like its all been tightened up?????

kingstreet

Above 85% = capital raising at upto 90%.

Whoever you owe the money to, it's capital raising or debt consolidation.

If you can get to 85% or below, that would open up more/different lenders to you.

How reliable is that valuation as well. £167k? Tell your broker how you arrived at this.

Thrugelmir

andy54199 wrote: »

Seems like its all been tightened up?????

Considerably so. Debt consolidation rarely works as it provides the solution not the answer (from a lenders viewpoint). However the discipline of repaying debt has a more profound effect.

andy54199

Hi guys,

Valuation is based on Zoopla & looking at what same properties are on the market for in the area. It is on the conservative side however as I know some surveyors are cautious!!!

85% LTV would give us a £1600 shortfall. Would it be a better idea to keep this amount on a card to get a deal???? Do you think our credit rating should be that much better with that amount on a card???

Thanks for the advice....really appreciate your time & expertise

Andy

kingstreet

Check sites which give actual sold prices, not EA marketing prices. Try this;-

http://www.rightmove.co.uk/house-prices.html/svr/2712;jsessionid=70DF0EF351B352E9C34041F1A4D91D8B

Surveyors use comparables. Sold prices of similar property within 0.5 miles in the last 120 days, for example.

You need to get proper advice about the possible lenders, both at and over 85% and about the valuation.

Repaying all your debt, destroying the cards and closing the accounts is the only way to stop the spiral. Anything which leaves you "keeping this amount on a card to get a deal" will doubtless see you back here in a couple of years to do the same thing.

andy54199

Thanks yet again for your valuable advice. Even on a Saturday!!!!

I agree we need to clear all cards & close them down. This is our aim.
The family member who we are borrowing the money from would gladly lend us the full amount to clear debts. I'm thinking we could go for a 85%LTV. Pay him what we get back and them clear the remaining with the £450 pm saving we will get.

Current provider is Santander. They offer a additional, what I call home loan with 85% LTV. But I don't know how strict they are with the borrowing criteria. Ie reasons for loan & proof where it's spent. I am reluctant to call as I have already spoken to them about extra borrowing to consolidate. So that will be on record.

We also paid, in the past, a one off fee to Total Mortgage for lifetime advice. But haven't used them for years. I don't think they are totally independent?????

Cheers Andy