Seeing the bank today

mon1o

Hi all! It is a while since i posted asking for advice on this board. My post stated that my hubby and i had somehow (through stupidity) accumulated £35000 worth of debt (approx) and we were considering whether to sell our house and pay off the debt and rent another house to help raise our credit score. We were then going to purchase another house once our score has gone up.

Well we have had our house valued by 4 estate agents and all 4 valuers gave us a figure of £105000 which means we have approx £60,000 equity in our house. Once we have paid back the mortgage and our debt we are left with almost £30000 so we went to see the bank last week and explained our situation. She told us that by her workings out if we did our original plan (but instead of renting took out a mortgage of £75000) we would still be £200 per month better off.

The only thing that will stop us getting a mortgage is our credit score. My hubby has not missed a payment on either our secured loan or IVA (for his debts) in 2 years and we have never missed a mortgage payment in almost 5 years. I however am always missing payments for my credit and store cards and am almost at my overdraft limit. Will all this count against us? I have tried contacting the cc companies and asking if i can arrange a payment plan with them but they have all refused and told me to pay what i can but they cannot stop the charges. So im over my limit on all of them. Hence why we need to pay the debt off fast. So this afternoon we are going to the bank to apply for a mortgage and im hoping they will take all this into consideration. What are the chances?

Im really nervous and this really is the only way for us. Sorry for the essay!
Moncia xx

*zippy*

Bumping this for you monica

Eager_Elephant

Hi Monica,

I think you need to think very carefully about taking out a bigger mortgage because you are turning unsecured debt into secure debt which means that if you miss payments your home is at risk but if you kept them as loans and credit cards they won't be.

I am also worried about your statement that you ran up £35,000 debt without realising - is this in addition to your husbands IVA or has he taken the IVA to pay the debts.

Without sounding too harsh I think you need to get a grip on your spending before seeing about a remortgage otherwise in a few years you will be back here with a large mortgage and loads of debt again.

If you do get a mortgage it may be at a higher interest rate as you are both obviously a high risk. Some banks treat IVA the same as bankruptcy.

Have you taken advice from CCCS or Payplan, they may be able to help you enter into a debt management plan for the time being which may also have the added bonus of charges and interest stopping.

Let us know how you got on.

EE