Stressed - Remortgage

GH1981

Apologies in advance for the long story but I have just been to see First Mortgage about a remortgage which I thought should be quite straightforward but it turns out they could not find any deals for me.

My current fixed rate of 3.59% with RBS is ending this month. Current monthly payment is £605 per month, balance is £88k over 16 years.

I also have 20k of credit card/loan debt that I was hoping to add into my mortgage as I am going off on maternity leave at the end of October, therefore I am looking for ways to reduce my monthly outgoings. My current payments are roughly £620 per month.

Total out goings of mortgage plus unsecured debts per month = £1225.

I earn £34,760 and my husband earns £19,000.

I was hoping to remortgage for £108,000 over 25 years (our home is worth £130,000 therefore LTV roughly 85%)

I have just been in to see First Mortgage and the adviser there done a credit search through Halifax which we were declined for. She said they were probably the most flexible lender but they would only accept us for up to 60% which will not even cover the £88k we need to remortgage!

I am now feeling completely stressed out as my income is going to drop significantly while I am off on maternity leave and we will not be able to afford to keep up with our monthly commitments.

I showed the advisor copies of our credit files and she pointed out that my husband has 2 recent late payments which may be affecting our decision and the fact that the amount of credit we have outstanding is high.

I just don't know what to do now. I could get a remortage deal over the 16 years for the £88k with my current lender that doesn't require any credit checks but that wont bring our payments down much. The only thing I can think is that I keep my mortgage as it is and default on my credit card/loan payments while I am off but then that will only further damage our remortgage prospects in future.

Is this really the only option for us? I find it ridiculous that I am currently managing to pay out over £1200 per month and cannot refinance to something that would see me paying only £550 per month.

Can I just say that I fully accept responsibility for building up a high level of debt but it just doesn't seem logical to be declined on the basis of affordability when the payments will be less than half of what I pay now!

Thrugelmir

GH1981 wrote: »

I find it ridiculous that I am currently managing to pay out over £1200 per month and cannot refinance to something that would see me paying only £550 per month.

Nothing personal in my comments. From the lenders perspective you do not have control over your personal finances. Debt consolidation rarely works. Statistically those that get bailed out re-offend.This is all down to human nature. Resolving ones own problems rather than being gifted an easy get out are worth their weight in gold. So take your RTG's off and face reality. Forget remortgaging and look at the options that are available to you. Apologies if I sound harsh. This is the commercial reality, you would considered extremely high risk.

GH1981

I appreciate your comments and can appreciate that applying to consolidate doesn't look good to lenders but would you think there was a chance I could even refinance just the £88k of my existing mortgage to 25 years to help bring down the payments.

Not sure what options I have to consider as I said previously my only option at the moment is to keep my current mortgage and default on my credit cards while I am off which is stupid as that will only worsen my financial problems rather than me being able to make it better before that happens.

dimbo61

Can you speak to your existing lender about any deals they have for existing customers?
While you are on the phone you could also ask about extending the term from 16 years to say 25 BUT you need to look at your ages as you do not want the mortgage past retirement age 65!

GH1981

I originally spoke to my existing lender about remortgaging the full amount over 25 years but they declined us at the credit check stage.

opinions4u

Lenders aren't willing to take on debts where you're not paying on time as it is.

I'd suggest the Debt-free Wannabe board for help.