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  • FIRST POST
    • anfieldred
    • By anfieldred 3rd Apr 18, 9:30 AM
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    anfieldred
    A question for brokers regarding remortgage for debt consolidation
    • #1
    • 3rd Apr 18, 9:30 AM
    A question for brokers regarding remortgage for debt consolidation 3rd Apr 18 at 9:30 AM
    Hello,

    I'm looking for a reply from any brokers on here if possible please.

    I've got a mortgage that I've had for 4 years at about 72% LTV (depending on the valuation), and am looking to remortgage to try and clear some debts. By taking out £20k I could 'free up' around £950 a month (from loans, card payments etc.). I'm aware that I'll be repaying over a longer period, but don't really see another way out at the minute.

    The problem is, as I've got a high amount of debt (around 30k), I get that lenders won't be keen on taking this on - also, my credit score isn't great due to the debt I have. If I borrow an additional 20k, this would take my LTV to around 82-83.5% again depending on the valuation.

    My question is, do brokers have lenders that will take this on/have you had much success with something similar in the past? I get that there's no 100% guarantees and I can't hold my own broker to it, but I'm bothered that I'll fail a final credit check and fail at the final hurdle - how likely is it that I can actually remortgage?

    I've looked at additional borrowing but can only go to to 80% LTV (with Halifax currently), so my broker is looking at other lenders, but how likely is it that it can actually go ahead?

    Any information is appreciated - if it's likely to be a no-go that's fine, but would be keen to hear any success stories you've had with remortgaging for debt consolidation.

    Thanks
    AR
Page 1
    • ACG
    • By ACG 3rd Apr 18, 9:44 AM
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    ACG
    • #2
    • 3rd Apr 18, 9:44 AM
    • #2
    • 3rd Apr 18, 9:44 AM
    There are lenders who will go to 85% an even 90% LTV for debt consolidation at normal rates. You say you have bad credit because of debt, having debt is not a problem. It is only a problem if you are paying late or missing payments.

    If you do have bad credit, you could look at doing a second charge loan. That would mean keeping your current mortgage with Halifax and then a top up mortgage with another lender.

    Your broker can go through the figures and determine which would be cheapest. It will likely be a remortgage but if you do have bad credit, it could be cheaper to keep your current mortgage on the high street and then go down the second charge route.
    I am a Mortgage Adviser
    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.
    • anfieldred
    • By anfieldred 3rd Apr 18, 9:50 AM
    • 204 Posts
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    anfieldred
    • #3
    • 3rd Apr 18, 9:50 AM
    • #3
    • 3rd Apr 18, 9:50 AM
    Thank you for the quick reply ACG. I've had 3 late payments in about 4-5 years, and 2 were in January although am disputing one of them.

    I have looked at second charge loans, but the payments were coming out at around 350-400 p/m (admittedly this is a lot less than I'm paying now), whereas initial figures from online calculators were looking at around £100-150 if through remortgaging.

    If I could get to around 87% LTV I could 'free up' around £1200 in payments each month, whereas at 82% it's around £950, so it definitely makes sense to try and get it on the mortgage if I can as it's a significant amount of money that wouldn't be paid out every month. I'm just concerned it's going to get rejected - I know a broker can only do so much in the sense of finding & recommending the product, then it is up to the lender to decide if they want to go ahead or not.
    • anfieldred
    • By anfieldred 10th Apr 18, 10:34 AM
    • 204 Posts
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    anfieldred
    • #4
    • 10th Apr 18, 10:34 AM
    • #4
    • 10th Apr 18, 10:34 AM
    Bumping this one rather than starting a new thread - explained & sent everything to my broker, and they said to go with Natwest and it was rejected at the first stage.

    Where do I go from here? I read on whichmagazine that Cambridge BS consider bad credit applicants, however on their site is says only for that region (am based up north).

    Does anyone know of any specialist lenders that may take this on/would be worth applying for?

    Thanks
    AR
    Last edited by anfieldred; 10-04-2018 at 10:40 AM. Reason: updated post
    • pepperpop
    • By pepperpop 10th Apr 18, 5:48 PM
    • 37 Posts
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    pepperpop
    • #5
    • 10th Apr 18, 5:48 PM
    • #5
    • 10th Apr 18, 5:48 PM
    We are in a similar situation - applied to accord via broker on brokers recommendation. Was rejected "too higher debt in income ratio" We were told by broker - didn't really understand as we would be clearing all the debt, he is now trying with clydesdale we await their decision and then we've no idea what to do if they decline.
    • Thrugelmir
    • By Thrugelmir 10th Apr 18, 6:23 PM
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    Thrugelmir
    • #6
    • 10th Apr 18, 6:23 PM
    • #6
    • 10th Apr 18, 6:23 PM
    didn't really understand as we would be clearing all the debt,
    Originally posted by pepperpop
    Debt consolidation provides the answer not the solution. You are not clearing the debt. Merely deferring repayment over a much longer time frame. Which initself exposes both you and the lender to increased level of risk. Mainstream lenders are reluctant to convert unsecured debt to secured debt for a variety of reasons. Primarily that the majority of people subumb to further financial issues at a later date. 2nd charge secured lending therefore provides for lenders a better commercial proposition that reflects the risks involved. Alternatively there are the primary mortgage lenders that specialise in underwriting poor credit business.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • pepperpop
    • By pepperpop 10th Apr 18, 7:27 PM
    • 37 Posts
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    pepperpop
    • #7
    • 10th Apr 18, 7:27 PM
    • #7
    • 10th Apr 18, 7:27 PM
    No its not a solution as such i agree, i want to take responsibility for the debt we have and pay it back unfortunately it would take years and years. I am interested in looking at the primary lenders that specialise in underwriting poor credit business and if need be perhaps 2nd charge - do you have an idea of who to approach if we need to? I have made many changes to our lifestyle over the last couple of years selling on eBay cutting food costs no holidays lease car being returned etc etc, but we are not making any dent in our debt due to the interest on cards and as they are close to their limits we cannot get 0% cards. I have produced a very detailed budget for the next 10 years which (if we can remortgage the unsecured debt enable us to make overpayments on our mortgage and try and pay this additional lending off quicker. Any advice much appreciated
    • feekerry
    • By feekerry 10th Apr 18, 8:03 PM
    • 76 Posts
    • 26 Thanks
    feekerry
    • #8
    • 10th Apr 18, 8:03 PM
    • #8
    • 10th Apr 18, 8:03 PM
    Hi

    We did something similar recently. We also desperately needed to extend the house and do some improvements. My credit history was much worse than yours! We went to 85% ltv. Wasnít a high st lender but rate was less than 3%. Our debt was higher than yours too. We even managed to reduce our mgt term in the process. We can save for the first time in years and will be using it to over pay the mortgage. I feel very different about money and debt now and itís changed my behaviour towards it.
    You need a really good broker.
    • anfieldred
    • By anfieldred 11th Apr 18, 12:11 PM
    • 204 Posts
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    anfieldred
    • #9
    • 11th Apr 18, 12:11 PM
    • #9
    • 11th Apr 18, 12:11 PM
    Hi

    We did something similar recently. We also desperately needed to extend the house and do some improvements. My credit history was much worse than yours! We went to 85% ltv. Wasnít a high st lender but rate was less than 3%. Our debt was higher than yours too. We even managed to reduce our mgt term in the process. We can save for the first time in years and will be using it to over pay the mortgage. I feel very different about money and debt now and itís changed my behaviour towards it.
    You need a really good broker.
    Originally posted by feekerry
    Thanks for the reply, and glad you got sorted. Hopefully I can too - as daft as it sounds, if it goes ahead I can free up nearly 2x more than what I'm paying on my mortgage currently.

    Do you mind me asking who your lender was please?
    • anfieldred
    • By anfieldred 11th Apr 18, 12:44 PM
    • 204 Posts
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    anfieldred
    So my broker has got in touch and says they're trying Clydesdale, however upon looking at https://help.cybonline.co.uk/system/selfservice.controller?CMD=VIEW_ARTICLE&ARTICLE_ID =14330&CONFIGURATION=1113&PARTITION_ID=1&USERTYPE= 1&LANGUAGE=en&COUNTRY=us, it says they only go up to 80% LTV...will the broker be able to get a different rate from what's on the site?
    • feekerry
    • By feekerry 11th Apr 18, 12:53 PM
    • 76 Posts
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    feekerry
    It was Kensington but as I say my credit history was much worse than yours
    • anfieldred
    • By anfieldred 11th Apr 18, 12:59 PM
    • 204 Posts
    • 2,627 Thanks
    anfieldred
    It was Kensington but as I say my credit history was much worse than yours
    Originally posted by feekerry
    Thanks again for the quick reply. I feel like an arsehole querying my broker for going with Clydesdale, but if it says on their site its max 80% LTV it seems like its a lost cause.
    • pepperpop
    • By pepperpop 11th Apr 18, 1:55 PM
    • 37 Posts
    • 5 Thanks
    pepperpop
    I would ask the question remember they are providing you with a service - you want to ensure you get a successful outcome - definitely ask if it puts your mind at ease.
    • feekerry
    • By feekerry 11th Apr 18, 4:37 PM
    • 76 Posts
    • 26 Thanks
    feekerry
    I couldnít see the deal I got on the lenders website. Was a few different rates/fees ltv but I got a slightly better one than I could see on their website so I think brokers can get Ďotherí deals than those advertised
    • anfieldred
    • By anfieldred 12th Apr 18, 10:42 AM
    • 204 Posts
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    anfieldred
    Asked is it worth pursuing as they say they can only go to 80% LTV for debt consolidation, just waiting on a reply from broker
    • pepperpop
    • By pepperpop 12th Apr 18, 10:58 AM
    • 37 Posts
    • 5 Thanks
    pepperpop
    i am in the process of trying to remortgage for debt consolidation with them but we are 78% liv
    • anfieldred
    • By anfieldred 13th Apr 18, 10:10 AM
    • 204 Posts
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    anfieldred
    Phoned my broker for an update and it looks like I've got to go down the secured route
    Last edited by anfieldred; 24-04-2018 at 10:49 AM. Reason: updated status
    • anfieldred
    • By anfieldred 13th Apr 18, 4:09 PM
    • 204 Posts
    • 2,627 Thanks
    anfieldred
    Asked is it worth pursuing as they say they can only go to 80% LTV for debt consolidation, just waiting on a reply from broker
    Originally posted by anfieldred
    Finally got a reply, and was told this was the outcome.

    Am I !!!!ing in the wind here?
    • Lauralou79
    • By Lauralou79 14th Apr 18, 8:12 AM
    • 233 Posts
    • 239 Thanks
    Lauralou79
    Go over to the debt free wannabe board. There maybe other solutions and they are very helpful there too. Consolidation doesn't always work as you don't deal with your spending so it happens again.
    I had minor debts in my early 20s and consolidated with a £8000 loan to reduce my payments many years ago. Then I ran my credit card and overdraft back up too so it didn't work. I ended up paying everything back the hard way it took 6 years: Just glad I didn't have a mortgage back then!
    • fatbelly
    • By fatbelly 14th Apr 18, 8:19 AM
    • 12,557 Posts
    • 9,631 Thanks
    fatbelly
    I agree. Debt consolidation doesn't work - it just moves non-priority debt to a more dangerous place. See you on the DFW board.
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