Remortgaging Rejection - Where to now???!

[bathgatebuyer]

Hi - I have recently tried changing my mortgage as part of my efforts to be debt-free (well, more manageable anyway!). I have a £10K Halifax credit card, and 2 other credit cards with balances of just under £2K each.

 

I have just came off the fixed rate for the mortgage I have been on for 5 years, and planned to remortgage incorporating the £10K of HBoS credit card debt into the mortgage which, on the product I've been looking at, reduces my monthly outgoings by £300. On top of this, my car loan ends this month, so I'm another £220 per month better off. So, the additional £520 per month put towards my remaining cards means that I'll be able to pay both of those off within 14 months (and allow me to reclaim the charges on those too 8) !!!!).

 

So, my great plan was hatched, and despite the obvious benefits to myself, I've been knocked back! Apparently the computer didn't like my credit score which is 'Very Poor' according to Credit Expert after 7 months of unemployment last year and all the missed payments on my financial commitments which ensued.

 

Despite the debts that accrued during that time, I have made substantial efforts in the months that I have since been working (now 8 months in a permament role with an organisation which employs over 30K people), and have been paying 2 mortgage payments every month, 2 council tax payments every month, 2 car loan payments every month, 2 home improvement loans every month for the past 3 or 4 months, and I'm back on an even keel after some really hard work over recent months to do so. I've also used my reclaimed charges to close 2 current accounts where there were large overdrafts, and also use these reclaimed charges to close 3 credit cards which totalled balances of £1,700.

 

So, positive headway in the past few months after a difficult time, but still passed over for the remortgage.

 

I'd be interested in other people's ideas as to where I can go with this. The Bank whcih rejected me have suggested I state my case in writing, provide a copy of my credit report, and they will look into the situation. I think I've composed a reasonably good solution to the problem, and will allow me to be debt-free (apart from the mortgage) within a year and a half but substantially better off each month.

 

Would I be getting my hopes up that the Bank may look upon me sympathetically, or should I give up on this idea and look elsewhere? Do you think my proposal to incorporate the HBoS debt into the mortgage is a good one or foolhardy?

 

Would be interested to hear other people's ideas on this.

[Allyxia]

HI BGB

 

You may have seen my thread on a simular problem. Me and OH did they same thing.

 

We got rid of a CCJ and a default the only blights on a credit file due to bank charges via the court and was left with perfect credit files bar one 2 marker for 1 month all the rest were zeros.

 

We couldnt get a mortgage with any high street lender.

 

When I spoke to credit expert they said tough luck it was all down to the one 2 marker (which was 4 months ago). I hardly believe that being £25 over my overdraft could seriously blight a prefect credit record in such a way.

 

Cant really offer you any more help on how to improve as credit experts advice was "you should pay all your bills on time if thats the case".

 

So again weve gone with a subprime lender. Its at 5.85% which I guess at todays rate isnt bad compared to prime lenders which are hoovering around the 5.3% mark?

 

So if anybody got any advice for BGB I sure would like to know how the hell to get out of this viscious circle?

[bathgatebuyer]

My worst is a 4 on a Cahoot loan which is now back to zero as I've paid double on everything to get back to evens! There are a few ones and two's dotted about given my unemployment - the infuriating thing being that everything was perfect prior to unemployment! One stint in unemployment (which can happen to absolutely anyone) and that's you stuffed for years apparently.

 

I thought my plan made reasonable sense - even the adviser I spoke to was convinced although it's obviously not her decision. Although, apparently some banks would rather see people put at risk of losing their home than give them an opportunity to become a responsible customer with them again.

 

Do you know what your actual score is, Allyxia? I mean, are you 'very poor', 'fair' or 'good'??? Can I also ask you to PM me the details of the lender you are now with? Also, are you tied into their deal for any length of time? And what the PPI provisions are on the mortgage?

 

As I'm out of my fixed rate, your 5.85% is way better than my 7.19%!

[gizmo111]

BBG - who have you tried? You need to look at sub prime lenders and compare their light adverse products. It is worth writing to the lender you hope to borrow off and showing them the efoorts you ahve made over the last year to get out of debt, and it is possible that your loan may get underwritten by a human rather thand a machine.

 

Hope you find something to suit.

[ladybird17]

I was left in a v. bad situation after my divorce - my ex had a stack of debts and ccj's etc, and of course, my credit score kept coming up as "linked" to him (huh - and I just spent a fortune getting rid of him!). I went to a broker who got me a subprime at quite a reasonable rate, and every year, as I never missed a payment, the rate went down 0.1% - so it was tough at first, but it CAN be done. In a not so good position, I would never approach direct, go through a reputable broker.

[bathgatebuyer]

Yeah - I'm hoping that they look upon things realistically instead of using a simple credit score. I'm really getting despondent with the whole credit score thing as it totally ignores anything which may explain your inability to meet credit commitments, such as unemployment or illness. Instead, a computer produces a score and you are either refused or rejected according to this.

 

Anyhow, I digress! I tried using the Co-operative which is who my current account is with. If they looked at that, they would see what my normal d/d is compared with those being spent correctng my arrears and see that I'm not ignoring my debt, I'm trying to tackle it, my job requires me to have a good credit record, and if I do let things slip, I lose my career as well as my credit records. Seems 7 months out of work, and suddenly I'm a financial leper.

 

So much for social inclusion!

[buzby]

Any manual assessment is always better than the automatic scoring normally used, so it's worth pursuing. A prime target for you is someone you've an established track record with, who may give additional weight that you are an existing customer. As for 'being debt-free' your aims are not their aim, and such a statement isn't music to their ears. A phrase like 'responsible money management' has a better ring!