Remortgaging with a default

Doddy03

Hi guys
Bit of a long story but we're in the process of trying to remortgage. We've been very silly and over the space of ten years have racked up the credit cards, oh business hasn't been doing as well and in the process we wrote to oh credit cards and asked for some breathing space as the interest was crippling us. We have an agreements place with one of them but the other issued a default even though we had agreed to a £400 per month payment which the debt company has accepted and we have been paying since October 2016. Oh credit file is a three out of five and the default and agreement are noted on it. We got a financial adviser out who said no way can we get a mortgage and advised us to consolidate our second charge (currently £35,000) with the rest of our current complete debt taking us to a second charge of around £100,000 at a rate of 7% roughly with a monthly payment of £749 in addition to our current mortgage of £1,200 per month. Stupidly I panicked and chatted to the second charge people thinking this was our only option. House is worth £400.000 current mortgage is £121,000. I then telephoned a specialist broker who is in the process trying to find us something. He's found a high street lender who may be willing to take "a chance" but does anyone know how Realistic this will be? Im not sleeping or eating properly as really don't want to have to pay high charges for a second mortgage but am so worried that we won't get a conventional one. Any help or advice much appreciated

Thrugelmir

A lender could take the view that you've plenty of equity in the property. Why don't you resolve matters yourselves. Wipe the slate clean by settling your debts. Debt consolidation on the whole doesn't work (from the lenders perspective). While the outgoing is lowered. The debt is simply deferred to be repaid over a longer time period. Might well be a lender that will consider your application. However the rates on offer might not particularly appealing. Nor will you be helped if do interest rates rise in the months/years ahead.

While it's not easy to make a life changing decision. On the other side you would be free of all the stress and worry. Perhaps find more energy to drive your business forward. Which cannot be easy with all that is on your mind.