The End of a Long Road, Northern Rock, Defaults..Help for the Future now....

goodfoodgirlguide

So to cut along story short. Multiple redundancies and bad budgeting left me and my husband unable to pay our debts as normal in 2012 and so we defaulted on all of them.

We also bought a house in 2006 with Northern Rock. A 125% mortgage.

For the last 6 years we have been on a DMP with Stepchange.

I have checked the credit files for each of us with all the 3 agencies, my husbands are nearly clear and i have one that will drop off at the end of next month.

Finally we should be able to think about sorting our future out now that we are in a better financial position.

We have been stuck for so long paying over the odds for our house and other bills because we have been unable to obtain better rates due to our adverse credit history.

I have loads of questions and dont really know where to start but here goes.

We still have a few more years of paying the dmp, how likely is it that they could ccj us? After waiting all this time for our credit record to be clean im terrified of it all happening again.

We need to remortgage, we pay 458 for the actual mortgage and 133 for the personal loan on top. Our mortgage is 80,000 and the house is worth between 100,000 ans 110,000. The unsecured loan part is 23,000. Is it better to try and remortgage for a higher value to pay off some of the loan? With NR, as soon as you separate the loan from the mortgage the interest rate doubles. At the moment we are paying 5.76.

Is it worth taking a credit card out to build up our credit worthyness. Im worried by doing this it will affect the mortgage application. We also would like to have a normal current account rather than the CO OP Cashminder we have at the moment. That will leave a hard search too, as will looking at changing energy suppliers wont it, we are currently with British Gas and pay over the odds.

I do have the contact details for 2 independant brokers, are we better off using them rather than going to the high street?

Also, the last question, i was made redundant recently. My son is starting school in Sept and i will be hoping to get a job then as we have lost his nursery funding for full time. Is it better to leave the mortgage application until im bringing in income too so that our affordability is better? We have waited this long, we can wait a few more months.

Im so frightened of messing everything up again, i dont really know where to start with sorting ourselves out. We have learned a few hard lessons over the years and are better people because of it but now i just want to look forward. Thanks for reading.

jwil

I would speak to a broker about your mortgage options. They will see your financial circumstances and will be able to advise better.

Your debts are unlikely to go for a CCJ as long as you are still paying them. If someone did, you would have plenty of warning to come up with a plan, as long as your address is up to date with all of your creditors.

Is there any scope for reducing your DMP payment to free up cash to overpay the loan part of the mortgage?

beanielou

Another vote for a broker.
Good idea from jwil to try to reduce payments to DMP if you can.

goodfoodgirlguide

Thank you so much for the replies. Hopefully when I'm back in employment in Sept I will have more cash to throw at the loan. The last thing I want to do really is reduce the payments to the dmp. I'm so worried about getting a ccj which will ruin everything now if that was to go back on our records.

Maybe the better option is to wait a bit longer and try and get that loan down as much as possible before trying to remortgage.

As far as our credit file shows, my husband is clear,, I have one default to drop off soon. How should we go about rebuilding good credit history. Is getting a cc and repaying in full the best way? Any recommendations on who to use?
Many thanks.