Can't remortgage due to credit score

victor16_2

Was looking for advise if anyone can help... will try and keep story brief.

Bought flat 2 years ago with 5 year fixed rate. This time last year I bit the bullet to sort out my debt (left over from being a student) and went to CCCS for help and now they are managing my debt with me making (without fail) monthly repayments.

Have never defaulted on my mortgage payments and now have £20,000 equity in my home (just had valuation).

I applied to my mortgage company for a 'further advance' (increase amount of mortgage without actually 'remortgaging') of £10k and they turned me down due to my credit score despite the fact they they orginally offered me a mortgage of £10k more than I took out!!!

Basically the answer to my problems is in the equity on my property but I can't get to it and I can't change provider due to fees!!

Any ideas?!?!?!

MortgagesInc

A secured loan might be your only option in this instance - but obviously that depends on your income etc

HelpWhereIcan

FC United an is spot on - you have to think very long and hard before securing any debt on your home, let alone debts that you are struggling with.

If things are very serious, it may even pay to consider an IVA. Although mortgage arrears will not come under the IVA, an IVA may lead to some of your debt being written off in 3 - 5 years time freeing up some income to go to the mortgage eralier (I have seen one couple this year who have been on debt management for 10 years - they would have been better off having debt written off and things over and done with). Securing debts on your property when you have had previous problems is a last resort. Why put the house at any more risk than it is already?

If you have mortgage arrears, you should ensure that you do all you can to come to an arrangement with the lender to settle them without further borrowing. Normally this would be done by making an arrangement to repay the arrears over a period of up to a year.

You may find that the lender is willing to capitalise the arrears (add them to the mortgage) once you have kept to an arrangement for up to 6 months.

See http://www.moneymadeclear.fsa.gov.uk/pdfs/mortgage_cantpay.pdf and http://www.cml.org.uk/cml/consumers/guides/assistance for more on this.

Good Luck. Get some advice from someone you can trust, as MortgagesInc says you may have the option of a secured loan, but this again should be done only after you have investigated other lower cost options first.

Hope this helps

victor16_2

I don't have any mortgage arrears - have never missed a payment. Am proud to say that I am successfully managing my debts and don't struggle to pay anything anymore. By adding a small amount on to my mortgage (given that I have 38 years of payments left on it!) I could have cleared everything and had a clean slate again. Is very frustrating that I've put all that work into increasing the value of my property and I can't get to it!!!

AndrewSmith

It is also dependent upon the value of your property.

Some lenders impost a max %age of lending for the purpose of debt consolidation.

Also if you have been on a DMP with the CCCS can I assume that at some point last year you may have missed or underpaid some of the unsecured debt?

This may be the reason for the failed credit score.

Post your details on the DFW board and look for better alternatives than a secured loan. It is a mistake to consolidate short term debts in this way generally.

Conrad

Victor, something to consider;

Every year Banks write - off millions in bad debt. A lot of this is accounted for by people simply refusing to pay off unsecured debts.

Some backward looking advisers will tell you this is not possible but I assure you many people simply stop paying thier debts. Nothing is repossessed, nothing happens, life goes on.

Your credit rating may take a dive for a while and Im not suggesting you rush into anything.

The problem with 'middle men debt advisers' is they only earn if you keep paying so they wont enlighten you on the above.

As an example I often come accross people who owed money to Banks on card and loans and they tell me they simply stopped paying and the Bank gave up.

Another example; My BNrother owed £52500 to B & West, resulting from his home being repossessed. They settled on £2500 (thats right 2500) as they had no other cjoice, it was that or nothing.

Other people contact creditors and offer £1.00 per month 'take it or leave it' and are succesful. YOU DONT NEED MIDDLEMEN TO DO THIS FOR YOU.

Again, not advice, just options to consider.

In the end a Bank may claim they will send the Baliffs in to repossess a TV for example but in reality this is unlikely as the costs are high and they dont know what property they will find in your home.

victor16_2

Not really sure I've got my point across here prob not explained myself very well.

No not NEED to remortgage. As things stand I have a DMP and a budget and I stick to all my payments, no longer get bank charges and could plod along as things are quite nicely with no struggles.

However, I have no contingency money in case god forbid the boiler packs up or something and I'd like to be able to put money aside for when Xmases and birthdays etc come along.

Just thought it would be nice to know that the only thing I owed money on was the mortgage which I don't struggle to pay and have nearly 40 years to pay it back.

Obviously, the bank has other ideas.....

gwapenut

victor16 wrote: »

Not really sure I've got my point across here prob not explained myself very well.

No not NEED to remortgage. As things stand I have a DMP and a budget and I stick to all my payments, no longer get bank charges and could plod along as things are quite nicely with no struggles.

However, I have no contingency money in case god forbid the boiler packs up or something and I'd like to be able to put money aside for when Xmases and birthdays etc come along.

Just thought it would be nice to know that the only thing I owed money on was the mortgage which I don't struggle to pay and have nearly 40 years to pay it back.

Obviously, the bank has other ideas.....

Could you
(a) Remortgage elsewhere or
(b) Take a payment holiday for a year, which increases the size of your mortgage but leaves you with lots of money each month for your savings?