Re-mortgage Fees -adverse credit

aero1

Hello all

My husband and I went bankrupt in 2010. Therefore all high street lenders are an absolute no-go but through a broker that deals with people with poor credit etc we appear to have found a lender!

Our plan is to remortgage even at a higher rate, then as soon as we can, get on a better deal. (I am in a hurry to remortgage to get my ex off the mortgage and my husbands name on there instead).

I just wondered, if I run the figures by you all, if anyone can offer advice as to whether it makes sense to do it now or should we wait another year.

The rate would be 6.15% variable. Huge, I know. But thats not what bothers me, its the costs involved!
I have been quoted:
£1500 lenders fee
£1995 Processing & completion fee
£450 Valuation fee
£275 fee to name change names on mortgage

I know the fee is bound to be higher because we are perceived as high risk - but that's really high! My main worry is, because in 6 months or a year we would want to get a better deal is this just throwing money away for the sake of it?

Thanks for your help.
(btw, I'm actually very excited at the thought that we can actually get a mortgage together, I'm just trying to be practical too)

amnblog

If you have been clean on credit since the bankruptcy there are mainstream lenders that might consider you if you have been discharged 3 or 4 years.


How much is the broker charging you>

aero1

Hi Amnblog

The brokers fee is wrapped up in the processing and completion fee.

We are both discharged 5 years now but despite clean living unfortunately my credit file is still looking awful as a joint loan with my ex (which I am no longer liable for) is in arrears and so it looks like I am happily not paying my debts. Hence the rush to get the remortgage and get clear of the debt link.

My husbands file, though we have tidied it up, has two CCJ's on it, which although they were included in the bankruptcy still show up on there.
He has put on a Notice of Correction on the entries but even last week a different IFA said no one on the high street would touch us with our records.

Apart from that, everything is up to date. So, now we have the opportunity (maybe) - they might knock us back yet! - I just want to make sure we don't rush into something that will cost us an arm and a leg
to set up, just to get rid of my ex off the mortgage. Or is it worth it, as straight away my credit history will start to recover and we can look forward to better opportunities down the line.. I don't know what to do and anyones advice or opinion is appreciated

amnblog

What you are suggesting regarding your file gives the impression that you are more likely to be two years away from mainstream rates than six months or a year.


Adverse credit products do carry more fees as the Lender is taking extra risk.


Check out the early redemption penalty on the deal and make sure it fits with when you expect to be able to obtain a better rate.

aero1

OK thanks Amnblog - I think that too, its unlikely that in Sept 2016 all the lenders will suddenly welcome us with open arms

As regards the costs then, you think they are about right for high risk applicants? The mortgage itself would be £142500.

I will definitely check out the early redemption fees etc thanks for that reminder too

amnblog

Who is the Lender?


I suspect your broker is placing the case through an administration company known as a packager - that increases the fees.

aero1

I actually don't know - isn't that awful! I shall email the broker now and find out

amnblog

He should be providing you with an quotation with everything listed before you commit to anything.

aero1

Yes its all just theoretical at the moment so I havent gt any actual quotes in front of me. He has narrowed it down to this one lender, we tick all the boxes and the reasons for the CCJs and loan have been explained to them.
I have asked him to proceed with getting an agreement in principle, then when we have ALL the facts and figures, make a decision. As you so rightly pointed out, anything better looks a long way off still but we're not going to be hasty
I will make sure to check out the fees for switching further down the line.

Thanks again

densol_2

When you say " no longer liable " for joint loan - do you mean legally or simply by an agreement with your ex ?

If it's still legally a joint loan - my understanding is you won't be able to disassociate yourself from him on the credit file till its paid off ? And then of course the thing sits there for 6 more years

Thrugelmir

aero1 wrote: »

My husbands file, though we have tidied it up, has two CCJ's on it, which although they were included in the bankruptcy still show up on there.
He has put on a Notice of Correction on the entries but even last week a different IFA said no one on the high street would touch us with our records.

Going bankrupt isn't a way of satisfying a CCJ. Notice of correction may be unhelpful.