C&G Mortgage/DMP

Ribbons473

Advice/outside opinions please!

Currently in a DMP, we have an Interest only Mortgage with C&G at their old SVR of 2% above base, total amount £300k

Plan is we are fed up of the DMP and other commitments so plan to sell we have around £200K equity in our house and then take on a smaller mortgage on a repayment basis.

We will use the equity to clear all debt and start afresh.

We have contacted C&G so far and they said that we can take our product with us but obviously have to go through a new application with them however we would be able to borrow up to 5 times our salary of £62K.

My concernes are have we got a cat in hells chance of getting another mortgage while we are in the DMP? Would they accept that everything could be paid direct from solicitors on completion day to guarantee debt is cleared? I guess all high street lenders are out for us?

Would we be better selling, clearing all debt and renting for say a year and then look at getting another mortgage?

Help!!!!

Thrugelmir

If your plan is downsize and clear your debts. Book a meeting with C&G and have a frank and honest discussion. Along with switching the new mortgage onto a repayment basis which is affordable. Then you may well have a receptive response.

Be honest with yourselves and make the event life changing.

Ribbons473

Thank you for your reply.

If we were to be declined by C&G for porting would this have any impact on our existing mortgage with them, could they remove or make us change to a repayment or does it have to remain?

Thrugelmir

Porting only refers to the transfer of certain existing terms and conditions on the new mortgage. The new mortgage requires a full application in any event.

My initial response was pragmatic. As from a lenders perspective you are currently in a DMP. Therefore you are not in a position to save towards repaying the capital owed on the interest only mortgage. Something which over will become an issue. As it'll become harder and harder to repay the capital owed. In addition if you were to suffer a period of financial distress or interest rates were to rise sharply. Then your finances would become even more stretched. All this means that the lender is highly likely going to spend time and money at some point administering your account.

By reducing your mortgage and putting your finances on a sounder footing. Everybody wins. I understand your concerns. There's no need to be afraid of the outcome. Lenders have a duty of care and responsibility to their customers. A customer that is proactive in their approach will be listened to.