Told to sell house, rent , build up credit then apply again for mortgage in 2yrs

rebeccaday

Hi in DMP been told by Sequence Mortgage advisor to sell house, pay off debt (£17,000) Rent for 2 yrs to slowly build up credit score (husbands current very poor mine poor , but just got credit card to build it up )then go bck to her after 2yrs and apply for mortgage with a better credit score. Madness or is she right, can someone improve in 2 yrs. 2 defaults on file end in 4 yrs will even just one default ruin chances of mortgage. Sorry not totally sure if selling hiuse to pay off debt & rent is money savvy? If we do nothing wrong we go onto SVR in September & aim to pay of DMP debt by nxt April . Tx for any advice

HampshireH

How much is your house worth? Selling a house for a £17k debt seems extreme to me but that depends entirely on your income, expenditure etc.

What are your current mortgage repayments.

How much would rent be and what is the difference in those two.

Home ownership is a hard place to get to at the moment. Losing it should be your very last resort.

For me madness but I am just a contributor and in no way have any specialist knowledge

MovingForwards

If I were in your position I would do anything to keep a home, not sell and wait 2 years; purely because no one knows if there will be further regulations about lending.

If you owe £17k how much are you paying off it each month? Are all the debts still incurring interest or has that been frozen?

Who is your mortgage with? Generally you can pick a new fixed rate and not have to be credit checked.

I would rethink using that 'advisor' as she is talking out her a$$. Sell due to owing £17k, nah even if it took 17 years to clear it still wouldn't be worth selling up and trying again.

I assume your mortgage and other priority bills are being paid with no arrears? Or a plan arranged with them to clear them?

PasturesNew

As I see it, you could "waste" £17k just renting for two years... in the hope of getting another mortgage/house.

It's a slow market, so you might not even be able to sell it as quickly as you thought, possibly even (in 'desperation') knocking £20k off what you started off asking.

Can you really not "SEVERELY cut back" for just two years and stay where you are?

Can you "live like you're on the dole" for two years? Having no treats, haircuts, days out, presents and things for two years?

Having rented for 2 years, the cost of selling/moving/rental extra costs (fees/deposits etc)/buying/moving, could equally cost you another £10k.

[Deleted User]

Any lender that tells you to “build your score or rating” has absolutely ZERO sides what they are taking about and shouldn’t be trusted.

A decent mortgage broker will get you a mortgage.

This one is clearly wrong and I do hope you’re not paying for their services.

Verityspinelli

Personally it really depends on your situation, selling your house to rent another seems very extreme but if you’re paying very high monthly payments on your mortgage so much so that you cannot commit to the payments in the long term or if you are at risk of your house being repossessed, then that might be an option, think of it as a self preservation technique jump before you’re pushed.

If that is not the case and renting is going to cost you around the same as your mortgage then it’s not worth your while, as long as you can carry on paying your mortgage you should still be able to come up with a plan to better your credit worthiness.
Maybe as others have said before you make any decisions go and speak to another financial/mortgage adviser. There are definitely some who can help you.

Good luck.

System

Selling your house when you're in debt is what you do when you're forced to either by the mortgage company or the official receiver forcing a sale if you're bankrupt or that you have eye watering levels of debt in the many tens of thousands of pounds and a large chunk of equity. Selling your house isn't something you do when you've got a level of debt just slightly more than the annual wage of someone on a minimum wage job which is well within the scope of a debt management plan.

Ben8282

Ignore this extremely foolish advice and forget about your meaningless credit score.

A4445

!!! wrote: »

Any lender that tells you to “build your score or rating” has absolutely ZERO sides what they are taking about and shouldn’t be trusted.

A decent mortgage broker will get you a mortgage.

This one is clearly wrong and I do hope you’re not paying for their services.

I’ve heard many mortgage advisors at work talking about credit scores they use it as a guideline. I even remember them telling someone to get their score up to the 700s. Even professional mortgage advisors get caught up with score.

The underwriters definitely don’t care about credit scores. For example experian tells you off for new accounts and amount of credit searches. Underwriters don’t even look at searches or new accounts. All they care are about is pay on time and affordablity. Also no defaults, CCJs and or current DMPs

SnowTiger

rebeccaday wrote: »

Hi in DMP been told by Sequence Mortgage advisor to sell house, pay off debt (£17,000) Rent for 2 yrs to slowly build up credit score (husbands current very poor mine poor , but just got credit card to build it up )then go bck to her after 2yrs and apply for mortgage with a better credit score. Madness or is she right, can someone improve in 2 yrs. 2 defaults on file end in 4 yrs will even just one default ruin chances of mortgage. Sorry not totally sure if selling hiuse to pay off debt & rent is money savvy? If we do nothing wrong we go onto SVR in September & aim to pay of DMP debt by nxt April . Tx for any advice

Sounds like madness to me.

In another message you mentioned you're receiving £1,200 a month from family to put towards your debts.

I guess you have a special mortgage rate at the moment that's ending soon and you're sniffing around to switch to a better deal.

There would have to be some pretty exceptional circumstances that would make selling up, paying off your debts now and renting for two years the preferred option.

MEM62

Told to sell house, rent , build up credit then apply again for mortgage in 2yrs

This is action you only take as a last resort.

Post up an SOA so that the very knowledgeable guys and girls that contribute to these forums can assess your situation and offer meaningful guidance.