Mortgage brokers-existing arrears

Kitty97

Are there any lenders who will consider a remortgage with existing arrears without charging stupid percent interest??
Have had extremely difficult few years with serious illness, downturn in business followed by pandemic but situation has greatly improved in last few months and due to improve still further. Nearly 70% equity in home. Current lender doesn’t want to come to any agreement though and wants to repossess rather than extend term or change mortgage type. Various reasons why moving is not an option right now including the fact we run business from there.

Chris_English

I don’t think anyone’s going to offer you “high street” rates while you have arrears, but it sounds as though the rate is less important than finding a lender who’ll take you on.

What are the figures involved; house value, arrears, income and mortgage outstanding?

ACG

There is a lender we use for adverse where if you have a 30% deposit/equity they will take manual approach. Interest rates of around 3%. They would want to understand everything and you would need one years books showing that the business was back on track in addition to current business bank statements - basically they would not rely solely on 3-6 months bank statements. 

Speak to a broker. 

[Deleted User]

ACG said:

There is a lender we use for adverse where if you have a 30% deposit/equity they will take manual approach. Interest rates of around 3%. They would want to understand everything and you would need one years books showing that the business was back on track in addition to current business bank statements - basically they would not rely solely on 3-6 months bank statements. 

Speak to a broker. 

Will manually underwrite with active secured arrears?

Kitty97

Arrears nearly £100k, mortgage £125k, house valued last week at £650-675+k. Partner now has employed job as well as business we run so income around 47k atm but likely to improve further as business gets back on track.

ACG

Deleted_User said:

ACG said:

There is a lender we use for adverse where if you have a 30% deposit/equity they will take manual approach. Interest rates of around 3%. They would want to understand everything and you would need one years books showing that the business was back on track in addition to current business bank statements - basically they would not rely solely on 3-6 months bank statements. 

Speak to a broker. 

Will manually underwrite with active secured arrears?

Yes but...

Kitty97 said:

Arrears nearly £100k, mortgage £125k, house valued last week at £650-675+k. Partner now has employed job as well as business we run so income around 47k atm but likely to improve further as business gets back on track.

I think with arrears that high you are probably going to struggle to get anything reasonable. Thats not to say you wont get reasonable rates. Your saving grace is the low LTV but from a lenders perspective they do not want the bad publicity associated with repossession if they can avoid it. 

I do not mean to kick you whilst you are down, but you are a high risk even if you do not consider yourself to be one. You know yourself personally, a lender has a credit report and application form to assess you on. You might have to take the hit for 2 years, but speak to a broker or 2 to see what they can do. 

Kitty97

Thanks-lender (the Spanish one) knows full well the reason for our arrears and the seriousness of our circumstances-hence allowing arrears to get to where they are. Despite our situation improving greatly in the last few months and continuing to improve, they are insisting they want to repossess rather than agree an arrangement. We’d asked for an extension to our term to cover the mortgage and arrears as with current term it’s not affordable atm. Would be more than affordable and they know the equity we have. Have child with severe depression and autism who will not be able to cope with losing home. Bank know this too but insistent they want full arrears paid immediately or possession. Obviously their recent billions in profits are not quite enough for them.

Chris_English

Kitty97 said:

Arrears nearly £100k, mortgage £125k, house valued last week at £650-675+k. Partner now has employed job as well as business we run so income around 47k atm but likely to improve further as business gets back on track.

Are you sure that that’s right? £100k arrears suggests more than a few years of issues.

I think that you need to understand that a repossession is very likely and to plan accordingly.

MWT

Kitty97 said:

Bank know this too but insistent they want full arrears paid immediately or possession. Obviously their recent billions in profits are not quite enough for them.

This isn't about profits, if it was they would have been far more forceful on the repossession long before now.

They do have to draw a line between forbearance and allowing you to just steadily get deeper and deeper into debt.

I do understand that for both business and family reasons you do not wish to 'downsize' but in the absence of what the lender can reasonably consider as a credible alternative, they do have to draw the line somewhere, and it feels like that time has come from their perspective.

Definitely talk to a broker and see what they can come up with though...

Kitty97

Losing our home and business will put us deeper in debt not to mention the issue with our child. We’re in a position to address the situation which if they worked with us would improve things still further. This action will put us in a worse position than we ever were. Ombudsman is looking into it due to pre-action protocol.

MWT

Kitty97 said:

Ombudsman is looking into it due to pre-action protocol.

I seem to recall that you have posted about this before, just can't find the original thread at the moment, but I guess what people are mostly saying is don't assume that there is a route to fix this with your current lender, or a solution via the Ombudsman that doesn't still result in you needing to change lenders in the end.

Keeping looking for a lender that does not have a problem with the risk profile that you present, rather than trying to hang on to the one you have in the hope you can get them to agree to something that they clearly do not consider to fit their profile.

It is probably not going to be as cheap as the mortgage you have now, but you are so far outside of the terms that you agreed when you got that mortgage that you are unlikely to find anything on a similar basis starting from where you are currently, but do try to find a lender at least willing to deal with you even if it is at a premium, so you do actually have a 'Plan B'...