looking for advice on remortgaging with arrears on current mortgage & neg cred his

missathome

Hi
Im new to this forum but have been following martins site for quite some time. I need to remortgage our property to consolidate debts and also ideally make some home improvements.
I have some arrears on the current mortgage and a not to good credit history. I have worked my way through martins remortgage advice but before taking the plunge (im really scared of making a big mistake here) i wondered if there was anyone in a simiar position who had recently remortaged. There are so many companies out there who say they can help someone in my position but at the end of the day i need a low interest rate so that the monthly payments are manageble just like everyone else and that just doesnt seem possible. I would be grateful for any comments you have ;-)
thanks

apk1

I know I'll get shot down for saying this, but you really need to speak to an independent broker, without knowing the specifics, no-one can give you relevant advice.

As you say there are a lot of companies targetting companies like you, some charging horrendous rates, depending on your current arrears the rate is not going to be too good, you will need to sit down and see if paying a higher rate on the mortgage compensates for the lower rate on the consolidated debts.

Also are the home improvements essential ? could they not wait until you get straight?

herbiesjp

Having arrears on your current mortgage, and a credit history that is not too good, will mean that you will not get high street rates.

HOwever the actual rate offered will depend on how a lender will class the severity of the adverse credit history you have. There is no industry standard when it comes to adverse credit mortgages, and so while one lender may call you near prime another lender may call you medium adverse.

Get an up to date copy of your credit file from Equifax or Experian and have a word with a whole of market adviser armed with the credit file.

A good adviser will then use that to discuss verbally with several lenders and find find lender will offer the best deals to you

A_Nice_Englishman

You seem to assuming that remortgaging is the solution to your debt problems. The general advice seems to be that converting unsecured debt to secured debt not a good idea.

I would post on the Debt Free Wannabee board first and see what advice you get there. If the conclusion is that you should remortgage, then look for someone who will lend to you.

ajb69

For what it's worth - and I'm no expert at all - I'd also say are you sure you want to remortgage?

From what you say, you are thinking of replacing your current secured and unsecured debt with a new, 100% secured, debt. While this will hopefully give you slightly lower monthly payments than now (otherwise something has gone terribly wrong ), if you miss just one payment you could lose the house - and you've said you've already missed payments on your current (smaller) mortgage.

I obviously have no idea who your current lender is but I've heard others on these boards say that some sub-prime lenders do not mess around if you are late with even one month's payment - they just start to repossess.

It's also not exactly a good time to take out an adverse credit mortgage, with the current turmoil in the credit markets - rates/lending criteria are changing rapidly, so it may be good to wait a few months anyway for everything to settle down.

I'd echo what everyone else has said - find a financial advisor, who specialises in this area and ideally has a recommendation from someone you trust. They'll probably be paid commission by the new mortgage company, so make sure they are "whole of market" - i.e. not tied to a particular set of mortgages - and make sure they tell you the commission they will earn on each product before you sign up. It's effectively your money - it comes out of the new mortgage - so don't be afraid to ask!

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