Remortgage options

XEO25

Hi, looking for some advice regarding a remortgage please...

I'm 1.5 years into my first mortgage (2 year fixed with Kensington). Rate is around 5% due to past credit issues. 180k borrowed against a 200k property. Property is now worth minimum 225k.

In 6 months I'd like to remortgage (a) to get a better rate, and (b) to borrow an additional 30k for additional home improvements. 

Credit issues (5 defaults <£1000 each, all cleared 3 years ago, and all will be 5.5 years old in 6 months).

Questions:

1) should I wait an additional 6 months for the defaults to drop off my credit file, or is 5.5 years old enough to not be an issue?

2) could I borrow an additional 30k? Salary is 65k. Affordability allows, even at 5%.

3) I have 16k of debt currently, as:
  - £6k loan
  - £8k loan 
  - £2k credit card

Debts on track to be cleared in 2 years. How helpful would it be to clear all/some of this first?

Thanks!

housebuyer143

XEO25 said:

Hi, looking for some advice regarding a remortgage please...

I'm 1.5 years into my first mortgage (2 year fixed with Kensington). Rate is around 5% due to past credit issues. 180k borrowed against a 200k property. Property is now worth minimum 225k.

In 6 months I'd like to remortgage (a) to get a better rate, and (b) to borrow an additional 30k for additional home improvements. 

Credit issues (5 defaults <£1000 each, all cleared 3 years ago, and all will be 5.5 years old in 6 months).

Questions:

1) should I wait an additional 6 months for the defaults to drop off my credit file, or is 5.5 years old enough to not be an issue?

2) could I borrow an additional 30k? Salary is 65k. Affordability allows, even at 5%.

3) I have 16k of debt currently, as:
  - £6k loan
  - £8k loan 
  - £2k credit card

Debts on track to be cleared in 2 years. How helpful would it be to clear all/some of this first?

Thanks!

Based on your salary you could likely borrow what you want but I think borrowing the extra might be a sticking point. You would then need a 95% mortgage and this rates probably are not better than what you have and you limit the lenders you can use. 
Why do you need £30k? What's it for? 

I recommend you use a broker when you remortgage as they will be able to find a lender and advise regarding the defaults.

K_S

@xeo25 Looking to do a home-improvements capital raise remo at 90% LTV (you'll be severely limited lender-wise if you want to go beyond 90% LTV on a capital raise remo), income of 65k, background debt of 16k (for the loans it's the monthly payment that matters and for the cc debt it's the amount). Even at 90% LTV, you'll already be above the maximum LTV allowed for capital raises with a good number of lenders.

Very very generally speaking, for people in the above scenario, waiting till you have an entirely clean credit report (all defaults dropped off) should be helpful in getting access to the lowest mainstream rate available to you (at that point in time) and a reasonable choice of lenders.

Affordability - other than the income and debt, it will also depend on your age and profession (which will determine how much flexibility you have on term) and the specific lender's affordability calc. You could get a very rough idea by playing around with a few lender calcs. Plug in your numbers and see what kind of borrowing figures it throws up. You can tweak the debt/outgoings to see if that is needed to hit the borrowing required.
https://www.halifax-intermediaries.co.uk/tools-calculators/mortgage-affordability-calculator.html https://online.accordmortgages.com/public/mortgages/quick_enquiry.do

All said and done, there's no harm in checking out your options now. Worst case scenario you'll find out that it's a no go until the defaults drop off so you're no worse off than waiting for 6 months. Rates/affordability might be significantly different in 6 months time, you may need to spend a few months on Kensington SVR if you wait, etc. so might as well check out your mainstream options (if any) now before deciding to wait.

XEO25 said:

Hi, looking for some advice regarding a remortgage please...

I'm 1.5 years into my first mortgage (2 year fixed with Kensington). Rate is around 5% due to past credit issues. 180k borrowed against a 200k property. Property is now worth minimum 225k.

In 6 months I'd like to remortgage (a) to get a better rate, and (b) to borrow an additional 30k for additional home improvements. 

Credit issues (5 defaults <£1000 each, all cleared 3 years ago, and all will be 5.5 years old in 6 months).

Questions:

1) should I wait an additional 6 months for the defaults to drop off my credit file, or is 5.5 years old enough to not be an issue?

2) could I borrow an additional 30k? Salary is 65k. Affordability allows, even at 5%.

3) I have 16k of debt currently, as:
  - £6k loan
  - £8k loan 
  - £2k credit card

Debts on track to be cleared in 2 years. How helpful would it be to clear all/some of this first?

Thanks!