Declined Mortgage in Principle

Jaffabfc

Hi,

i have a mortgage that runs out in February, my credit rating is half decent 940/999 from the credit club on here.
i have a loan that i am wanting to put onto my mortgage to totally solve my money problems, but in July/August HSBC failed to take the money from my account which i didnt realise with me working non-stop threw this pandemic, they contacted me and asked me to make the payments over the phone which i declined (incase it was fraud) and rang them back to discuss (which was a nightmare to get to talk to anyone). They then looked at it and agreed it was there issue but also that i should be checking my account regularly they wanted me to make the payment of 2 months to cover the issue which i didnt have the funds for, i raised a complaint and it went on my credit file.
they are now saying they will wave one of the payments and want me to pay one of the payments within 2 week and they will then ammend my credit score but yet again i dont have the funds for.

I have failed a mortgage in principal and all i can think is because of this, so basically a computer issue which was out of my hands is going to cause me problems possibly for the next 5 years or until my loan is paid off.
Any suggestions?

MattMattMattUK

If the only reason you did not pay was a "computer issue", how come you do not have the funds still and are unable to pay to bring the account up to date?

Jaffabfc

Because the funds was used for something else, all my bills come out on payday so then i know what i have available.
because this hadnt come out i somehow used the money, i was in my overdraft at the time so i was slowly reducing the limit while reducing the overdraft so it could have been used for this, i am not certain exactly what happened with the money.

yksi

You haven't gone into great detail, but affordability for the new mortgage amount seems to be the problem here. You're living very close to the wire if you don't have funds to catch up on your existing loan repayments and my guess is that adding the loan amount to your mortgage is a level of debt that the lender isn't comfortable with comparative to your income. I realise how frustrating that is when the repayments would actually go down, but this is still how lenders see things. Late payments are a paper trail that show that you haven't been able to handle this level of debt easily. They are understandably not willing to risk lending you even more.

Consolidation is usually not the answer. The reason is that people don't tend to address the spending habits that started the debt and end up in more debt than when they started, and this time it's being in "trouble-level" debt. You've skipped ahead a few steps here by already being in your overdraft, but the rule still stands. You need to spend less, not rejig your borrowing. Best head over to the Debt-Free Wannabe boards and do some work on reducing your outgoings.

Jaffabfc

ok, so here are the information i have
Bank Accounts
HSBC -£2500
Nationwide -£800
Yorkshire Bank +£1
Natwest £0
Halifax -£850
Credit/Store Cards
Argos -£650
Mortgage
-£89,950 House value £150,000
Loan
HSBC -£10,500
Barclays -£14,000 (car valuation PCP)

So out of the above, bank account of Yorkshire and Natwest i need to close but go into the bank and do, unable to get in due to C19. Halifax i am reducing around £50 per month. HSBC i am reducing at £100 a month, Nationwide £50 per month.
Store cards i am paying £100 per month
Loan i am paying £266 on HSBC and Barclays for the car £206 per month
I am bringing in approx £45k per year. I am wanting to put the loan on my mortgage to make it one payment, which i am then going to get rid of the car and get something more affordable, the Argos card will be paid off before the mortgage renewal and the others i will pay off with the remaining money i have monthly, which will take approx 1 year and i will be financially stable with basically no debts.

i udnerstand the less i pay the more i have, i have reduced all my outgoings and the ones above is what i am stuck with but cant get any further, i have a sim only on a broken phone, also no tv package the cheapest broadband and shop at aldi.
Everything is reduced to save as much as possible to sort out the above but i am left with around £300 spare cash every month and thats it which is food and basic day to day stuff.

yksi

The advice you receive in here will be very limited, you should go into the Debt-Free Wannabe boards https://forums.moneysavingexpert.com/categories/debt-free-wannabe and post a SOA (details are over there). You (like everyone else) think that your outgoings can't be reduced; but once you post the SOA, other people might be able to point you to places where they can. And to be candid, saying that everything is reduced as much as possible isn't an acceptable answer because you need to reduce your spending - it's not optional here if you want to get yourself out of trouble so don't give up just yet.

MattMattMattUK

If you are on £45k pa that should mean a take home of around £2,850 pcm. On my rough calculations and making an assumption about your mortgage (1.8%, 20 years remaining) then you should have around £1,200 pcm remaining rather than £300 pcm. 

It might be worth you doing a Statement of Affairs to get a proper handle on where your costs are and see where the true state of things might be. 
https://www.stoozing.com/soa.php

fwor

Jaffabfc said:

i have a loan that i am wanting to put onto my mortgage to totally solve my money problems

You should not be looking at this as a solution, because typically all it does is take a debt and spread it out over a much longer period. It can give the illusion of being cheaper, because the annual interest rate is lower - but you will pay interest for much longer.

Jaffabfc said:

I am wanting to put the loan on my mortgage to make it one payment

It's easy to understand why people want to do this - to make it look "easier". But psychologically it's the wrong thing to do. You need to address the debt and overpay rather than "kicking the can down the road" by adding it to your mortgage. And the worst thing about it is that you are securing more debt on your home, and so increasing the probability that you will lose it if things go unexpectedly wrong (e.g. redundancy, illness, etc).

D3xt3r5L4b

So you're currently living off 3 overdrafts, a store card, a loan and car finance.. I think affordability has failed you here.

Jaffabfc

D3xt3r5L4b said:

So you're currently living off 3 overdrafts, a store card, a loan and car finance.. I think affordability has failed you here.

yes it has, went threw a bad point in life and just didnt realise, now i am trying to sort things

D3xt3r5L4b

Jaffabfc said:

D3xt3r5L4b said:

So you're currently living off 3 overdrafts, a store card, a loan and car finance.. I think affordability has failed you here.

yes it has, went threw a bad point in life and just didnt realise, now i am trying to sort things

Then I would suggest getting those sorted first before looking at further commitments on a mortgage.
Did you use a broker? What was their advice?