Opinions - (Re?) Mortgage

ginger68_2

Hi Folks,

Am just dipping my toe in the water so to speak and have a few questions and a slightly different situation so bear with me while I explain.

Unfortunately, my wife passed away last year. The flat we live in was mortgaged in her sole name - the mortgage has however been paid off by life insurance / endowments and the flat has now (this week) been transferred into my sole name.

There are still some outstanding credit card balances and things like mail order catalogues, funeral expenses etc that need to be paid off. My understanding (broadly speaking) is that as I've "taken" the flat which was part of her estate, I'm now liable for any other debts that are left outstanding.

I also recieved a death in service payment from the Civil Service of approx 28k, which I've handed over to my solicitor to discharge as much of the debts as possible. This has so far been used to pay off two secured loans (approx £5000 & £10000)

This is not a huge problem as my parents will be initially bankrolling any debts so that I can get them cleared immediately.

I reckon that overall, I will owe them a maximum of £10k.

I also have some credit card debts that I would like to pay off - approximately £20k. The only spanner in the works is that I have arrears against a couple of these
cards which I am currently in the process of sorting out. These should be cleared within the next 8 weeks.

The flat is valued at approx £90k.

So all in all, would be looking for a mortgage of around £25-30k maximum. Does this seem reasonable ? I do worry about applying for stuff and then screwing up an already fragile credit history.

Am in full time employment on around £22K per year.

Have looked on a few websites like moneysupermarket.com but would appreciate any further advice or pointers on how to proceed.

lynnexxxo

Firstly, I am sorry to here about your wife.

I would work out all the debts you have. And how much you have available (without further credit) to pay for them. Judging from what I have read on these forum some people with small mortgages find it difficult to get good rate - however as your loan to value (of your house) ratio is low thats a point in your favour, a neg is the less than prefect credit.

What sort of interest are you paying on the debts you have?

As you are earning, and mortgage/rent is not an issue at the mo, is it possible to throw as much money as possible to any extra debts and get them cleared in a few years?


I don't want to sound like i'm judging you, and i don't know your circumstances but it sounds like in the past few years you have been living beyond your means. Its important now that you stop that and only spend what you can afford, or the credit card bills will start creeping up again.

Martin_Moore

Most lenders have a minimum mortgage lending of about 25,000. As Lynn says it depends on what rate of interest you are paying on on your existing debts. (You would need to compare any potential mortgage interest rate against your existing credit agreements) These debts that you have would be unsecured. If you remortgaged the flat then they would become secured debt.

The arrears you have with the credit card could effect which lenders would consider your application. Most of the other facts you stated such as your salary and the amount you wish to borrow compared to the value of the flat (Loan To Value) should not cause any problem at all as they would fit most lenders criteria.