Need a (re)mortgage but lack confidence in being successful

edited 30 November -1 at 1:00AM in Mortgages & Endowments
8 replies 979 views
lauralandlauraland Forumite
1.7K Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hi there! I am new to the whole mortgage process and I'm planning to use a mortgage broker but I'm nervous about starting the process, getting my hopes up and then getting rejected! I would appreciate any advice you can give on whether getting a mortgage would be possible in my circumstances, if theres anything I can do to boost my chances and if anyone else in a similar postion has been successful.

So heres my situation;


I was in a financially fortunate position to purchase my home outright in cash, meaning I have never had a mortgage. I estimate the house is worth approx £85k, and I would like to take out a mortgage for £30k to complete some badly needed home renovations. That works out as 35% LTV.

I am single, mid-thirties, no partner or dependants. My basic annual income is £11.5k, though take home is slightly more due to unsociable hour enhancements.

Credit reports/scores aren't too horrendous. 1 late payment to next in 2013, default of £88 to virgin media in 2104 (showing as settled and only visible on equifax), and a few records of payday loans over the years, though none in the past 12 months.

Financial commitments at present are small: a monthly personal loan payment of £105, plus small balances on next, very and capital one accounts which will be cleared by March. If I am lucky to get a mortgage I plan to pay off the remaining loan balance (£4k) so that monthly payment will be gone.

I think thats all the relevant info. If anyone could advise I would be grateful, and if anyone could recommend a broker in the Belfast area that would be great :)
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I got ham but i'm not a hamster.....

Replies

  • kingstreetkingstreet Forumite
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    A remortgage of an unencumbered property is not the cup of tea of all lenders.

    With a low income, much of your earnings are taken up in subsistence expenses, so you won't be offered 4 x income. You are likely to be required to clear the credit on or before completion to achieve your ambition.

    A default in the last three years is going to put off some high street lenders, but you should have some options.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • lauralandlauraland Forumite
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    Thanks for the info. I am hoping to get a second job soon to boost my income. Am I right in thinking that I will have to be in a job for at least 6 months for lenders to consider this as income?
    I got ham but i'm not a hamster.....
  • kingstreetkingstreet Forumite
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    No. You aren't.

    Lenders tend to be more flexible, but there will be fewer and fewer the more issues you add to the mix.

    Low income
    Unencumbered remortgage
    Historic adverse
    New/second job.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • csgohan4csgohan4 Forumite
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    You have had no mortgage and unable to save up a decent amount of money is what concerns the lender, worse still the credit history is very colourful to say the least.


    Wait until you earn more, save up more, ditch the pay day loan temptation. The debt free Wannabee forum is a good place to lurk as is stepchange for debt
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ PIxie/ Bowlhead99 RIP
  • getmore4lessgetmore4less Forumite
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    Your history as you describe(using credit, no savings) it means you can't afford it even if a lender will give you the money.

    £30k 25y(60) 5% around £175pm (2.5% £135)

    More income is essential
    basic of £11.5k is 30hrs week on min wage.

    Say around £950pm
    40hr would be around £15k £1150pm.

    Have you ever done a budget/SOA?
    I think you need to be out of your credit dependency before committing to a long term debt in the order of £150pm.

    have look at debtfreewanabee for ideas on where you can cut back on your current spends.

    Any room for a lodger?
  • lauralandlauraland Forumite
    1.7K Posts
    Thanks for the advice, you have confirmed what I was thinking - wait until later in the year when I will be in a stronger position with a bigger income, less outgoings and more savings.

    I feel I have got a good handle on my finances now, after the small balances are paid on the credit accounts (£600 in total) my only credit commitment will be the loan. I've no need for payday loans anymore so that wont be a problem.

    Every spare penny I've had has been going into the doing and buying things for the house, so if I hold off doing anything for a while and put this money aside, that should stand me in good stead. I spend very little on anything else so this will be the only area where I can save.

    Thanks for all your input.
    I got ham but i'm not a hamster.....
  • A number of lenders may not want to lend you such a low amount (£30k).
  • getmore4lessgetmore4less Forumite
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    I think the key is to build up a buffer pot so that if something comes up you don't have to borrow to pay for it.

    if you can get to the state you are saving/reducing debt by around £150pm with your current income you have a much better handle on things

    Once earning more that will help a lot as you can still save and take on a debt to make your home better.
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