Broker says we can't remortgage with credit card balance

[Deleted User]

I dont know what there is to say really. Paying currently 4.3% interest on our mortgage. So wanted to remortgage but broker says he is struggling to find any lender. He said he can only get a deal with 20-22 years term on £67000. Apparently because we have £16000 balance on our credit card. Is that same for every bank/lender even though we never miss any payment and got great credit score? I don't understand it.

[Deleted User]

That's a question for your broker.

Not missing payments is the bare minimum and your great credit score isn't real. Your current high rate and large unsecured debt certainly suggests you're a higher risk.

When affordability is tight, the less debt you carry, the more options you'll have.

Rincewindcl

[Deleted User] said:

I dont know what there is to say really. Paying currently 4.3% interest on our mortgage. So wanted to remortgage but broker says he is struggling to find any lender. He said he can only get a deal with 20-22 years term on £67000. Apparently because we have £16000 balance on our credit card. Is that same for every bank/lender even though we never miss any payment and got great credit score? I don't understand it.

Could it be down to affordability? From what I understand, any unsecured debt comes off as 3% of the remaining balance monthly, so that's about £480 per month. Obviously I have no idea on your income or circumstances, but as zx81 says, that is a lot of unsecured debt. 

[Deleted User]

Yes he said affordability. We earn between me and my partner 40000 😩 Oh well never mind. Thanks for replying. Didnt think there was anything we could do anyway from what sounds like.

Thrugelmir

£16k of debt on a credit card will impact lenders perceptions of you as a potential borrower. Lenders will be able to determine the trajectory of your debt from the data they receive from the credit reference agencies. The score you see is meaningless as far as potential enders are concerned. They'll use their own criteria. 

In remortgaging are you attempting to release equity? 

[Deleted User]

Thrugelmir said:

£16k of debt on a credit card will impact lenders perceptions of you as a potential borrower. Lenders will be able to determine the trajectory of your debt from the data they receive from the credit reference agencies. The score you see is meaningless as far as potential enders are concerned. They'll use their own criteria. 

In remortgaging are you attempting to release equity? 

No we wanted to just borrow what we originally owe. Nothing less, nothing more. I only took that money in January to pay off the equity loan, so I can remortgage. Our house was bought with a government equity loan scheme called ownhome. We couldn't afford to buy otherwise with only £40000 a year income.  

K_S

[Deleted User] said:

I dont know what there is to say really. Paying currently 4.3% interest on our mortgage. So wanted to remortgage but broker says he is struggling to find any lender. He said he can only get a deal with 20-22 years term on £67000. Apparently because we have £16000 balance on our credit card. Is that same for every bank/lender even though we never miss any payment and got great credit score? I don't understand it.

@solenoid From your other thread (says your outstanding balance is 67k) it looks like the problem you're having with what the broker offered is the term of 20-22 years and you would prefer it to be much shorter?

You could consider just taking the shortest term you can get (20-22 years) and then overpaying to achieve the same effect as a shorter term. If you want to overpay by a lot (more than the usual 10% a year), just get an approprioate product which allows you to do that.

https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/

[Deleted User]

K_S said:

[Deleted User] said:

I dont know what there is to say really. Paying currently 4.3% interest on our mortgage. So wanted to remortgage but broker says he is struggling to find any lender. He said he can only get a deal with 20-22 years term on £67000. Apparently because we have £16000 balance on our credit card. Is that same for every bank/lender even though we never miss any payment and got great credit score? I don't understand it.

@solenoid From your other thread (says your outstanding balance is 67k) it looks like the problem you're having with what the broker offered is the term of 20-22 years and you would prefer it to be much shorter?

You could consider just taking the shortest term you can get (20-22 years) and then overpaying to achieve the same effect as a shorter term. If you want to overpay by a lot (more than the usual 10% a year), just get an approprioate product which allows you to do that.

https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/

Oh I didnt think of that. Thank you. Yes thats a good idea if we are allowed. I don't mind overpaying to finish it in 12 or so years.