I've been on the forum as a 'voyeur' for a while and have finally plucked up courage to start addressing my problems.
The first majot hurdle was telling my wife about the debts for fear of her reaction but having overcome that particular problem its now time to start dealing with these issues...
I have approx £45000 of unsecured debt between 5 creditor's (about a third with HSBC) which I can no longer afford to pay. £15K is in the form of a personal loan which will be re-paid in 3.5 years. the rest is credit cards and overdrafts and thats where the real problem is.
However based on what I have read here a re-mortgage to consolidate the debt seems like the best option - this is due to their being anywhere between £62-87K equity in my house - more than enough to pay off the debt If I could re-mortgage.
However given the current economic climate I am so terrified that the lender's won't lend because my credit score is so poor that an IVA or worse still bankruptcy maybe the only option.
I suppose the question is - can I still get a mortgage with a poor credit score in this economic climate - even if I only want to borrow 85% LTV and around 3.5 times my salary?
Hello and welcome to the forum, there are numerous experienced people here to help and advise each visitor.
The only way you are going to find out if a remortgage is possible is by testing the water and enquiring.
Firstly I would approac your existing lender and see if they can assist you in what you want to do, failing that look for guidance from a broker. Best of luck.Tony
F.P.C. 1,2,3 Qualified
Financial Planning Certificate
CeMap Qualified
Whole of Market Mortgage Broker
Managing Director : Debt Advisory Bureau
Debt Advisory 4U
Principal : All Mortgage Products
Thanks, have contacted my existing lender (HSBC) and will keep you advised of how it goes - just feels good to be able to talk to someone about the problem (aleit self made problem!)
Yes a re-mortgage or additional drawdown to cover all of your unsecured debt would be the cheapest way to solve your problem. Even a re-mortgage maybe in your wifes name if your name is hampered by bad credit reports.
Welshboy thereafter should be able to help you. Let us know how you get on. Good luck and the fact you are on this forum is good in that you are now addressing your problems and sharing them with others who have the same or even worse debt problems.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
I can highly recommend Tony Parsons (Welshboy) as a very reputable mortgage broker, but I am sure he would advise you to try your existing lender first.
Whatever your situation there is always someone on the forum who has been in the same position and can offer support/advice as well as top notch professional advice, good luck [:)]
Be positive & look after yourself, there are more important things in life than debts....
You've made the first step to a debt free life - admitting to your most dearest is always the hardest hurdle and once done, everything else can be faced together and having someone to open up to and support you along the way is important !
Speak with your existing mortgage lender first - if no help then speak with welshboy......after that consider your other options via a insolvency practitioner - plenty of them on this forum that would be able to support you
Best of luck
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Have contacted existing lender, talked it through and on the face of it they think they can help. They're sending through the application forms so I'll let you know how I get on... wish me luck... its just the waiting and the uncertainty I have to deal with now - which is alweays the hardest bit...
That's great news and the very best of luck with your application. Don't forget if you cannot raise the full amount required to pay creditors in full, they are always open to sensible offers made directly or via an IVA or DMP.
Sounds quite positive Neil, hope it goes ok for you.
Don't forget that we are always here Neil whenever you have a query.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I am looking at releasing £30K equity from my property through a homeowner loan with HSBC. My current lender. My mortgage with them at present is £138K on a property valued at £225K when purchased a year ago. I am the sole earner for our family but earn a fraction under £50K. HSBC have advised that they will not need to do a re-valuation as it is only a year since they had the last one done, so by leveraging 30K i can clear all credit cards and overdrafts (including the 12K I owe HSBC) with only my £15K loan left to repay at 388 per month. the loan will be repaid by september 2012 so only just over 3.5 years till thats cleared. Becuase both the mortgage and homeowner loan are tracker's I am allowed to make unlimited overpayments (if I can afford it) thus reducing the mortgage and loan amount as quickly as the disposable income allows.
It all sounds very positive and will free up around £700 per month, and hopefully in 3.5 years I'll be £1000 per month better off.
they do not seem phased by my current poor credit score, but I suspect I am borderline on affordability - after bills etc only have £1400 per month with 2 dependents (approx 40% of income).
does anyone know how their affordability criteria works for existing borrowers? especially when almost a third of my debt is with them anyway?
I must add that the 14oo disposable will be if the homeowner loan goes through - at the moment its 400 which doesn't go far clothing and feeding a family of 4...
That is a great way of restructuring your debts, but do make sure that you cut up all of the credit cards and ask for the accounts to be closed to avoid the temptation of racking up further debt in the future and just making the situation a whloe lot worse. I am sure you will not!!!
You're quite right - better than that I am going to close my current account and have all my salary paid into a joint account with my wife so she'll have complete transparency of any spending.
We want to keep a credit card for emergencies which I'll have the pin no. for but my wife will physically hold so any spending on it is a joint decision.
Hopefully these actions will prevent a repeat of this situation.
Keeping my fingers crossed that HSBC will come through - otherwise I'll ask welshboy to see if he can come up with potential deals...
