High income high debt mortgage challenge

Brachay

I earn a really good salary, have high mortgage and high debt. Debt all managed well - all paid on time and above the minimums, but credit score is low. To consolidate all of this into my mortgage would save me over £2000 a month in payments, yet I can't get a new mortgage (current rate 4.95%). Why can't lenders see that actually this is a safe bet vs what I pay now? Any advice or lenders you know that could help?

kingstreet

Why can't you get a new mortgage?

Who have you spoken to so far?

What's the property value (conservative estimate, please) and what amount do you need to borrow?

JimmyTheWig

Isn't it bad practice for a lender to convert unsecured debt into secured debt?
If you then can't pay and get your house repossessed you might be able to argue it was mis-sold.

Landofwood

Lenders aren't fond of lending hundreds of thousands of pounds to people who earn "really good salaries" and still rack up large amounts of debt.

amnblog

Have you engaged Professional help Brachay?

Angry_Bear

Brachay wrote: »

I earn a really good salary, have high mortgage and high debt. Debt all managed well - all paid on time and above the minimums, but credit score is low. To consolidate all of this into my mortgage would save me over £2000 a month in payments, yet I can't get a new mortgage (current rate 4.95%). Why can't lenders see that actually this is a safe bet vs what I pay now? Any advice or lenders you know that could help?

It might save you £2000 a month in payments now, but the chances are it would cost you in interest long term (not to mention the risks inherent in converting unsecured to secured debt).
You've be better off visiting the Debt-Free-Wannabe section of the forum for advice on how to pay off your debts quicker. As a by-product, you'll save interest, improve your credit score and probably be able to remortgage for a better rate within a few years.

kingstreet

JimmyTheWig wrote: »

Isn't it bad practice for a lender to convert unsecured debt into secured debt?
If you then can't pay and get your house repossessed you might be able to argue it was mis-sold.

As a broker, you'd certainly put some legwork in on alternative lending options before the remortgage route and do some serious "a-covering" on rescheduling short-term debt over a longer term and turning unsecured debt into secured debt and the implications of loss of home in the event of default.

JimmyTheWig

kingstreet wrote: »

As a broker, you'd certainly put some legwork in on alternative lending options before the remortgage route and do some serious "a-covering" on rescheduling short-term debt over a longer term and turning unsecured debt into secured debt and the implications of loss of home in the event of default.

As I would have thought.
But brokers have a higher level of duty to their customers.

What would happen if I were to phone up a high-street mortgage lender and say "hello, I'd like to increase my mortgage to pay off my credit card debts"? [I wouldn't, by the way - after the effort I've gone to of building up credit card balances I would hate to pay to clear them!]

kingstreet

Existing lender - further advance, they'd probably tell you to do one, or try to sell you a loan instead.

New lender - remortgage for capital raising, max LTV 80%? Probably yes.

JimmyTheWig

Makes sense.

shortchanged_2

Something else you're not telling us?

Why the low credit score?