Am I a mortgage prisoner, if so help!

Angelcrackers

Hi

Mortgage with Engage Credit. 

I called them to ask if they would be able to put us on a lower rate due to escalating interest rates. They said "sorry, we are only a servicing company, so no new loans"

I asked if that meant I was a mortgage prisoner and they didn't answer me, but do you think I am?

If so, can anyone help. 

Want to remortgage approx. £252,600
House worth £540,000ish
Total annual income joint £61,000
OH just finishing probation period in job, but looks like no problem with going permanent. He also gets constant offers of overtime, would any of that be taken into account?

We had arrears on mortgage of £5600 due to Lockdown/Furlough and short hours in old job. But since moving to new job have already cleared £4000 and will clear the other £1600 over the next few weeks.
Also have one ccj which has not been settled yet, but drops off in late January '24.

Any ideas or hope for us?

MFWannabe

Angelcrackers said:

Hi

Mortgage with Engage Credit. 

I called them to ask if they would be able to put us on a lower rate due to escalating interest rates. They said "sorry, we are only a servicing company, so no new loans"

I asked if that meant I was a mortgage prisoner and they didn't answer me, but do you think I am?

If so, can anyone help. 

Want to remortgage approx. £252,600
House worth £540,000ish
Total annual income joint £61,000
OH just finishing probation period in job, but looks like no problem with going permanent. He also gets constant offers of overtime, would any of that be taken into account?

We had arrears on mortgage of £5600 due to Lockdown/Furlough and short hours in old job. But since moving to new job have already cleared £4000 and will clear the other £1600 over the next few weeks.
Also have one ccj which has not been settled yet, but drops off in late January '24.

Any ideas or hope for us?

Think you would be better off discussing with a good mortgage broker 

simon_or

With ongoing mortgage arrears, there's no chance of being able to re-mortgage to another bank.

Based on the above, what's stopping you is not necessarily affordability, it's your credit worthiness so that wouldn't be defined as a mortgage prisoner aiui.

ACG

You need to clear the arrears as a bear minimum. 
Once you are caught up, get your credit report and speak to a broker. 

Angelcrackers

But if the arrears were caused by the high interest rate and I can't move to another lender because of it, this still doesn't mean you are a mortgage prisoner? 
I was paying as much as I could towards the monthly payments every month, we just couldn't afford the 6-8% rate we were on at the time.

Angelcrackers

So the fact I've already cleared most of the arrears as stated and contacted my lender suggested to you I'm "not solving the problem". 
Clearly asking for advice, is also not solving the problem? Right...

My point being I'm trying to get straight, but if our current lender won't lend and I am unable to get a mortgage elsewhere due to the high rates I've been charged over the years. Then in ADDITION to asking for advice, I was wondering if that meant we would also be considered prisoners. 

Very easy to take your financial high ground when not in our position I presume. 

MWT

Angelcrackers said:

My point being I'm trying to get straight, but if our current lender won't lend and I am unable to get a mortgage elsewhere due to the high rates I've been charged over the years. Then in ADDITION to asking for advice, I was wondering if that meant we would also be considered prisoners. 

Very easy to take your financial high ground when not in our position I presume. 

Nobody is trying to take the 'high ground' and they are trying to help you.

The problem you have is that even if you are defined as a 'mortgage prisoner' the modified affordability criteria can only be accessed if you are up to date with your mortgage payments and have no missed payments in the last 12 months, and from what you've said, affordability isn't likely to be your main concern anyway.

Just based on what you've said, you have one blocker, the arrears, and one concern which is the CCJ.

So you need to get rid of the arrears and then talk to a broker as ACG suggested above...

Also you didn't say, but can we assume this is a repayment mortgage?

If it is interest only that would complicate things...

ACG

Angelcrackers said:

But if the arrears were caused by the high interest rate and I can't move to another lender because of it, this still doesn't mean you are a mortgage prisoner? 
I was paying as much as I could towards the monthly payments every month, we just couldn't afford the 6-8% rate we were on at the time.

I will go back to this post as the other posts seem to be going off a little...

You are really only classed as a mortgage prisoner if it is the lender that is stopping you from getting a new product. As it stands at the minute, it is you and the lender. Even once you are up to date the arrears will still play a factor but you might have a lender or 2, how much cheaper they will be than your current lender will depend on what your credit report looks like. 


https://commonslibrary.parliament.uk/research-briefings/cbp-9411/#:~:text=Who are mortgage prisoners?,book of an inactive firm.

Who are mortgage prisoners? Although definitions vary, generally speaking “mortgage prisoners” are people who are unable to switch mortgages to a better deal, even if they are up to date with their payments. Most mortgage prisoners have a mortgage in a closed book of an inactive firm.

Angelcrackers

ACG said:

Angelcrackers said:

But if the arrears were caused by the high interest rate and I can't move to another lender because of it, this still doesn't mean you are a mortgage prisoner? 
I was paying as much as I could towards the monthly payments every month, we just couldn't afford the 6-8% rate we were on at the time.

I will go back to this post as the other posts seem to be going off a little...

You are really only classed as a mortgage prisoner if it is the lender that is stopping you from getting a new product. As it stands at the minute, it is you and the lender. Even once you are up to date the arrears will still play a factor but you might have a lender or 2, how much cheaper they will be than your current lender will depend on what your credit report looks like. 


https://commonslibrary.parliament.uk/research-briefings/cbp-9411/#:~:text=Who are mortgage prisoners?,book of an inactive firm.

Who are mortgage prisoners? Although definitions vary, generally speaking “mortgage prisoners” are people who are unable to switch mortgages to a better deal, even if they are up to date with their payments. Most mortgage prisoners have a mortgage in a closed book of an inactive firm.

Thank you. We were Interest Only, but have been at least able to swap back to being part and part now. 

Do you think it would be better to carry on paying the higher amounts until the CCJ drops off the record in January? Ideally we would like to try once the arrears are cleared, but could wait until then if it's likely to help.
Having worked overtime this month and re doing my calculations, I think realistically we can clear the arrears by end of July, but wonder if the CCJ disappearing would be a better bet?

silvercar

Angelcrackers said:

ACG said:

Angelcrackers said:

But if the arrears were caused by the high interest rate and I can't move to another lender because of it, this still doesn't mean you are a mortgage prisoner? 
I was paying as much as I could towards the monthly payments every month, we just couldn't afford the 6-8% rate we were on at the time.

I will go back to this post as the other posts seem to be going off a little...

You are really only classed as a mortgage prisoner if it is the lender that is stopping you from getting a new product. As it stands at the minute, it is you and the lender. Even once you are up to date the arrears will still play a factor but you might have a lender or 2, how much cheaper they will be than your current lender will depend on what your credit report looks like. 


https://commonslibrary.parliament.uk/research-briefings/cbp-9411/#:~:text=Who are mortgage prisoners?,book of an inactive firm.

Who are mortgage prisoners? Although definitions vary, generally speaking “mortgage prisoners” are people who are unable to switch mortgages to a better deal, even if they are up to date with their payments. Most mortgage prisoners have a mortgage in a closed book of an inactive firm.

Thank you. We were Interest Only, but have been at least able to swap back to being part and part now. 

Do you think it would be better to carry on paying the higher amounts until the CCJ drops off the record in January? Ideally we would like to try once the arrears are cleared, but could wait until then if it's likely to help.
Having worked overtime this month and re doing my calculations, I think realistically we can clear the arrears by end of July, but wonder if the CCJ disappearing would be a better bet?

I'd have stayed on interest only to clear the arrears quicker, but if you forecast you will do that within weeks it's a moot point.

ACG

Any lender you switch to is probably going to need you to go on to repayment.
The CCJ dropping off might help but in any event I cant see you getting high street rates. 

The CCJ will mean any arrears are more or less 6 months old, if you were to leave it until Feb (once the mortgage arrears are over 6 months) you would have more options. But that does not necessarily mean better interest rates are rates are generally on an upward trend. 

If you reckon you can clear the arrears this month, get your credit report to a broker and see what they can do once you are up to date. If you want to proceed you can do. If you prefer to wait and see you can do that also.