If declined twice for debt consolidation what next?

pepperpop

Hi Just wanted to ask what the next options would be if declined twice for debt consolidation remortgage - (agreed in principle 2 hard credit searches carried out applied via broker) haven't applied to our current lender yet as it was looking cheaper to remortgage elsewhere - My questions are how long before we could apply again in view of the 2 hard searches and also should we try our current lender next or try a specialist lender - We were told on initial applications there was plenty of income to play with but we think because the debt we want to consolidate is equal to our annual salary we are thinking that is going against us - but we are unable to reduce this by much. We have read up on second charge mortgages which when doing a search on uswitch are coming up cheaper per month than what our current lender quoted to us for the additional borrowing - however we suspect brokerage charges for these are pretty high? In view of the fact we are unable to reduce our unsecured debt by much without consolidating what are our options? We have thought long and hard and have decided that consolidation is the best thing for us but having been declined once and awaiting decision on a second application it would be really useful to have an idea of what our options would then be?

ACG

Why were you declined? Did you fit criteria and affordability?

Could you look at a secured loan for the debt?

Thrugelmir

pepperpop wrote: »

We were told on initial applications there was plenty of income to play

That's only part of the underwriting process. Lenders also look closely at the debt accumulated.

pepperpop

Hi thanks for replaying os quickly. We are awaiting decision on 2nd application but the first application was declined due to high debt to income ratio (although all of the unsecured debt we have was being consolidated onto the mortgage). Second application is in with a lender who "looks at individuals a bit differently. Our broker extended the term of the loan this time we are 4 weeks in and still awaiting response as they process everything manually. I guess we are super worried as we have been turned down once and if we are turned down again then that will mean 2 hard searches on our file - does this mean we cannot apply to anyone else for a while? To give an idea of numbers Salaries per p60s this year total £53k. Current mortgage o/s £139, property valued at £250 Additional borrowing required to clear loan and credit cards £50k bringing LTV to 78% I have 1 late payment on my file from last march - all debt payments and mortgage payments have always been paid on time bar that 1 2 days late.

pepperpop

ACG wrote: »

Why were you declined? Did you fit criteria and affordability?

Could you look at a secured loan for the debt?

Meant to say I have looked at these but a bit worried about fees being high can't seem to find anywhere online where you key in what you need to borrow and it shows fees.

ACG

the first application was declined due to high debt to income ratio

Who was the lender?

Secured loans are only really done through brokers. Fees are normally charged in one of 2 ways, 10% of the loan amount up to a maximum of £5k but the legals and valuation is covered out of that or £1k plus the val and legal fees, but it can vary depending on the finer details.

pepperpop

ACG wrote: »

Who was the lender?

Secured loans are only really done through brokers. Fees are normally charged in one of 2 ways, 10% of the loan amount up to a maximum of £5k but the legals and valuation is covered out of that or £1k plus the val and legal fees, but it can vary depending on the finer details.

The lender that declined was Accord - we are now trying with Clydesdale. We are currently with Natwest dont know if we should try them for further advance and if so how long should we wait in view of 2 hard searches by Accord & Clydesdale. Failing that Im thinking second charge as last resort as interest rates higher - or are there other lenders that will accept us for a remortgage? Thanks again

ACG

Natwest are pretty good with debt consolidation. It could be worth speaking to them.

pepperpop

ACG wrote: »

Natwest are pretty good with debt consolidation. It could be worth speaking to them.

Thanks ACG presume we should wait till we hear from clydesdale first? If clydesdale decline should we wait for a period of time before we approach Natwest (due to having had 2 hard searches on our credit files) - Thanks for responding our heads all over the place with this as the moment we just want to be sure that if we are declined that what we do next isn't going to jeopardise our chances further.

ACG

I dont have enough information to say whether or not you should wait. Realistically waiting a month is not going to make any difference, it would probably be 3 months minimum but more like 6 months.

pepperpop

ACG wrote: »

I dont have enough information to say whether or not you should wait. Realistically waiting a month is not going to make any difference, it would probably be 3 months minimum but more like 6 months.

Thanks again ACG we thought that might be the case, would that also be the case if applying for a second charge? Also how do we find a good second charge broker? We presume we should keep an eye on our credit file in the mean time, try and improve as much as we can? Our broker told us it would make no difference to our credit rating if we reapplied (we paid £300 upfront refundable if not able to get us a mortgage - he's says if clydesdale say no then barclays but we dont think barclays will lend to us based on the amount of unsecured debt we have, Barclays intermediary website lending criteria says;

"Over-indebtedness
Where the total unsecured bureau debt (credit cards, overdrafts and loans) is greater than or equal to the gross annual income used in the affordability assessment then the application will be declined. This includes where customers were looking to consolidate the borrowing on to the mortgage.)"

However if we say no to applying to Barclays we think we will not be refunded the £300 fee.