Help needed to sort out mortgage to downsize with debt

FetaBrie

Hello All, Posted this elsewhere but was directed to try posting here to get some advice. Am new to posting but I have been a lurker for years, and have been inspired to take control of our situation that has been out of control for a long time. I won't bore you with all the reasons why but after struggling & juggling with too much debt, we have accepted an offer on our house and made an offer on another house for half the price. The relief I feel is enormous, and it is definitely the right thing to do for us to be able to live our values and achieve our financial goals.
What we need help with is how to proceed with arranging the mortgage. My husband's credit rating is excellent, whereas I have a 'fair' score as a result of 3 recent late payments on a tiny balance on a Next account (I know, awful, am so angry with myself), as well as quite a lot of debt on credit cards (I have 28k, he has about 6k) that have just got out of hand in order to bandage over the cracks. We also have a 25k loan (313/ month) and an HP car (110/ month).
We are lucky in that we both have good salaries (65k combined) at permanent jobs. The new house price is 76,500, and we have accepted 158 for ours, with an outstanding balance on the mortgage of 134,500. No chain on either side so we could potentially move in 8 -10 weeks. What is the best way forward: independent financial advisor, mortgage broker, current bank, current mortgage provider? Our bank knows our situation and was encouraging us to apply for a re-mortgage to cover the CCs, but we knew we would not get the valuation and also really wanted to downsize. Does this mean they are likely to approve? Do we try to arrange a loan first to cover outstanding CC debt? 15% deposit or would 10% be enough? Any advice so gratefully received, I am not sure which direction to go next and am fearful of making any other marks on our credit report by applying. Thank you so much for reading & offering any help.

Senior_Paper_Monitor

Broker would appear a good investment on this one in my opinion (expect a fee)

FetaBrie

Thank you Senior P.

Thrugelmir

There's no harm in approaching your existing lender and explaining your plans to see if they'll assist. I always suggest a frank open approach. Show a desire and commitment to tackle your issues head on. No one is going to judge you. What's done is done.

I wouldn't be overly concerned about a few late payments when jointly you owe well in excess of £60k. That's what lenders will be scoring you on internally. CRA ratings are meaningless and do little more than generate revenue by selling subscription services to unsuspecting consumers .

Is the £25k loan an unsecured debt?

FetaBrie

Thank you Thurgelmir. Yes, the 25k is unsecured. The interest rate is 8.7% and 5 & 1/2 years remaining on it. Is this going to be an obstacle?

TrickyTree83

Some staggering amounts. I can see why it'll be a weight off your shoulders.

Newstart2014

Hi


We were in a similar situation, but didn't move only re-mortgaged. Complete weight of our shoulders. Debts totalled £70k (divorces and new starts for us both). We can now pay all off and still have our mortgage £100 lower than what it had been which is we can easily manage. Good luck with finding a way through. I would recommend broker route myself. Ours has been fantastic both times in getting first and now second mortgage.

FetaBrie

Thanks Newstart. Glad to hear you were able to find a way through. We couldn't do that as our house has not appreciated in value (it was a new-build in one of the areas most impacted by the recession in the country). Just met broker and she has been really supportive, has suggested a 5-year plan that seems really sensible and very manageable. Is going to ring me later to let me know if we can go ahead with 90% or if we'll need 85% LTV.

FetaBrie

YESSSSS... 90% LTV has been approved, that means we can clear some of our debts and start tearing into the rest.
I can't wait.