Broker advised cannot get mortgage

IWillBeFree

I engaged a broker to helm me re-mortgage and he has now advised that he cannot get an agreement in principle. He's not able to advise me what is preventing this but I assume it is either affordability or a default on my credit report.


Some information that may help answer my query:


I had a default logged in March 2010, which was fully satisfied in May 2012. This is the only issue in my reports, everything else is paid on time, no late payments/CCJs etc.


I owe roughly £25,500 on three credit cards.


I paid off a credit card in early August, but it still shows as £4,500 outstanding on it on the credit reports. I have contacted the lender and Equifax and Experian and have all advised me it takes up to 8 weeks to be updated.


I earn £63K and I am looking for a mortgage for £160K which is 68% for the LTV.


My questions are:


1. Should I wait until the default falls off my file in April 2016 before applying again? Or should I apply again at some point between now and then, and if so, when?


2. Is there anything else I can be doing to improve my position? I am paying off as much debt as I can and the broker suggested I may want to get a credit card and pay it off each month, to make me seem more appealing to lenders. I am reluctant to do this and would welcome another point of view.


My mortgage payment will increase significantly soon so I am keen to secure another deal as soon as I can. Any pointers or advice would be appreciated.


Thank you

kingstreet

What are your existing lender's customer retention options?

IWillBeFree

My existing lender doesn't have any deals for retention at present. Not just for me, for anyone - that's how they do business now. The broker called them whilst I was with him and advised him so.

Landofwood

IWillBeFree wrote: »

My existing lender doesn't have any deals for retention at present. Not just for me, for anyone - that's how they do business now. The broker called them whilst I was with him and advised him so.

Which lender is that?

kingstreet

Ok. So reading between the lines, you are with a "credit repair" lender with no retention options and you expected to be able to remortgage back to the high street roundabout now?

£25k on cards is heading towards 50% of your income and an affordability hit of £1250 per month as most lenders take 5%. The more conservative lenders like YBS and Nationwide will kick you for this, as much as for the historic default.

I'd say waiting until the card balance has fallen on your credit file will help and no, a single default registered in April 2010 shouldn't be a deal-breaker.

If you've got card debt being paid regularly another card is not going to help one iota, so ignore.

Have you obtained all three versions of your credit files to get the full picture of your credit history and asked a broker to place your case on the correspondence of your best file and the lender which sources only from that particular CRA?

Thrugelmir

IWillBeFree wrote: »

the broker suggested I may want to get a credit card and pay it off each month, to make me seem more appealing to lenders. I am reluctant to do this and would welcome another point of view.

My personal view is that it may be worth trying another broker. With £25k of existing debt applying for yet another card isn't the brightest of ideas. Your focus obviously should be on tackling what already exists. Reducing the debt significantly every month will have far more "appeal".

densol_2

Thrugelmir wrote: »

My personal view is that it may be worth trying another broker. With £25k of existing debt applying for yet another card isn't the brightest of ideas. Your focus obviously should be on tackling what already exists. Reducing the debt significantly every month will have far more "appeal".

Yay - me and Thrug finally agree on something ! . I agree and fail to see how anyone could think that taking out yet "another" credit card could help with credit scores ! Yeah if one had NO history at all.....but having three already.... Here's a plan - lets get 4 !!

Key is to pay pay pay on those cards so it's a more reasonable figure for main stream lenders

amnblog

Surprised the initial broker has given up on this.

Certainly worth getting a second opinion.

If the credit cards prove a barrier and you do not have the cash to clear them, you might consider consolidating them ( once you understand the potential risks of this action )

IWillBeFree

Thank you everyone. I will try to answer a few of the points that came up.

My current lender is Kensington.

My monthly debt repayments are £540 and that's the minimum. Since the penny dropped, I have been paying significantly more.

I was not necessary looking for a High St lender, just a remortgage on a fixed rate. The broker advised me he tried Halifax and Kensington and neither were able to offer me anything.

I'm glad there seems to be agreement on not taking another card out, that didn't seem a good idea.

I will of course keep paying back my debt but the increase in my monthly mortgage payment will seriously be impacted, hence I'm keen to get myself in a position to get another deal asap.

I really appreciate everyone's input. Clearly hindsight is a wonderful thing but I can only do my best from now on, I cannot change my past financial mistakes.

Thank you

Thrugelmir

IWillBeFree wrote: »

My monthly debt repayments are £540 and that's the minimum. Since the penny dropped, I have been paying significantly more.

This data is now visible to lenders when accessing credit files. So has a part in influencing the outcome.

IWillBeFree

Thanks Thrugelmir. Clearly not influenced in a positive enough manner.

A point I missed by kingstreet above was in relation to my reports. I have got the Equifax, Experian and Call Credit reports and also passed them to the broker. I don't think he did anything else with them other than view them to confirm what I told him.

All show pretty similar things, no surprises. Last credit application was in June for a new bank account.