Can Anyone Help with Mortgage Madness

sparky2604

I currently have a mortgage with my partner of £101,000 with HSBC, we want to borrow an additional £60,000 for debt consolidation and renovations to the house. The house is worth £300,000 at the moment but with the planned renovations would easily increase by £50,000 as the renovations are part of an existing new extension and the house is out in the countryside within a good area. I have tried every mortgage company i can find and have only done soft searches so far but all have declined so far, i also went through a broker to help with the best deals and that didn't work either. Together we have a gross annual income of £43,600 but for some reason they are only looking at our credit card debt and can't see past it to reduce the monthly payments by adding it to the mortgage, because then out credit cards will be clear.
Our loan to value is only 55% and we both have very high credit scores, never missed or late on any payments for anything so with super history cannot understand why we are being turned down. We wanted to remortgage with the extra borrowing and really fix the rate for about five years, is there any ideas out there please?

haras_nosirrah

I have just placed someone in similar circumstances (offer received today) - they were borrowing 80k for repaying a htb equity loan and 32k for debt consolidation - we got this agreed at 85% ltv with a high street lender after a number of others declined as they still had 40k debt not being repaid - high earners and expensive cars. HSBC are definately not an option as they will consider the debt as still being in place unless already cleared prior to application.

There are potentially options open to you subject to credit score and outgoings you need to keep speaking to brokers.

ACG

Are you filling out the AIPs correctly?
I am surprised a broker can not place this. This is our bread and butter sort of case.

financegeek

I'd definitely try a different broker. Try and find one who's 'independent' so they can advise you on all potential options (including secured loans / second charges) once they've discussed your current situation and also future plans for you.

It may not be the best option for you (as if there's a highstreet mortgage lender it'll probably be cheaper!), but second charge lenders tend to clear the creditors directly on completion, so ignore any current payments in terms of outgoings.

enthusiasticsaver

This is often a problem with debt consolidation in that the lender cannot be certain the additional amount will be used to repay current debt. Therefore the application is scored on you taking on new debt in addition to your existing. It is also a massive mistake to turn unsecured debt into secured if you are paying off credit cards and as a means of repaying debt consolidation loans do not normally work and end up leading to more debt usually. Post on the DFW forum for advice.

butterflybook

This shouldn't be a deal breaker and a broker should be able to place this

jennhg88

Broker. Go. Now.

Thrugelmir

sparky2604 wrote: »

but for some reason they are only looking at our credit card debt and can't see past it to reduce the monthly payments by adding it to the mortgage, because then out credit cards will be clear.

Provides a solution but not the answer. Lenders may be viewed as irresponsible taking such a course of action. Lenders can view if you are proactively taking steps to reduce your debt or simply rolling it over.

Mortgage_Adviser

OP, how old are you both? Could this be the ages of yours that are limiting the mortagge term and therefore the amounts available?
The income you have quoted, how guaranteed it is?
Is it basic salaries or are there bonuses, overtimes, comissions involved etc?

xyz123

Have you asked HSBC?
How much is credit card debt? Do you both have secure jobs or agency based?

Also for future planning, Please be realistic in how much your house value will go up if you renovate. If you spend £10k on a fantastic bathroom, there is no guarantee that the buyer or for that purpose a valuation will add £10,000 to the price....

sparky2604

I am 39, my partner 45 and our incomes are very strong as i work for the NHS and he works for an international corporation so both very sats, he has opportunity for overtime but only does it when he wants to earn a bit extra