Debt

[CatsangDogs]

Hi, I'm looking for advice regarding debt and a possible remortgage. My credit score is horrific due to debts accrued by my ex and also myself, I have a few different debts and 1 CCJ, all in all the debt comes to £8,000. I'm hoping someone can help. I have a small mortgage just less than £40,000 but my home is worth £250,000. I need a new roof and would love to be able to pay off the debt. I did ask my mortgage company if I could remortgage and was told no because of my credit score. I am hoping someone could advise as to what I could try next. I was hoping as I have a lot of equity in the home that I can remortgage even though my credit is useless. I am aware I'm in a mess, please no bashing and I would be very grateful for any advice, thanks in advance.

Sorry to read of your situation - Could you ask for this thread to me moved to the money board? You’ll get some genuinely helpful advice on there. In the first instance, get a spreadsheet of your debt and the interest rates that are accruing so that you understand your starting point.

is your house very old? Needing an entire new roof is quite rare unless zero maintenance has been done. Could you get more than one reputable firm to come and quote for the work?

There are brokers and lenders who specialise in people with adverse credit, albeit you’ll pay a higher rate on less favourable terms. It’s worth contacting some to get the lay of the land. How recent is the period your adverse credit originated from? The less recent the better, and if your CCJ is settled (paid) those lenders will look generally at it more favourably.

Whilst you have a lot of equity, that only provides comfort to the lender that if they had to repossess your home, they’d be able to recover what they were owed post sale. But it takes a long time for a lender to get to the position of taking possession if you did stop paying your mortgage, so they’re more concerned with whether you’re likely to repay or not, and unfortunately you won’t appear a low risk.

If your roof desperately needs repair and you have no way of raising any capital or credit, there may be a scheme operated by your local authority to help homeowners with low means having property fall into disrepair, it’s worth checking. This would be repayable, and as you own an asset, could involve a second charge on the property.

A broker is the way to go. I got a good rate first time round and he contacted my before my term was up (the mortgage company did much closer to the deadline) and was able to tailor a new mortgage to my new circumstances. Not debt/CCJ but I was self employed with a very variable income.

This thread really should have been posted in the Money board, @CatsangDogs . You would get more volume of replies there, please don't post for "traffic" as sometimes it's quality not quantity on Mumsnet if you post in the right area in my experience.

I would head to moneysavingexpert. The debt free wannabe board was a great help to me.

Thank you @Netaporter I'm not sure how I find the 'money board' could you point me in the right diirection thank you.

https://www.mumsnet.com/talk/money-matters

Or you could report your own OP and ask for it to be moved

I’ve reported it for you and asked that it gets moved to money matters. 🤞for you. And good luck 💐

Hi @CatsangDogs
We have moved your thread for you.
MNHQ

Definitely talk to a broker about a specialist remortgage.

Obviously the world has moved on but in 2004 I remortgaged out of an IVA and the rate was only about 0.5% higher than a normal rate so not disastrously expensive.

But before you do that obviously have a thorough review your budget to make sure you can comfortably afford a bigger mortgage and consider what you will do if you lose an income for whatever reason, so emergency fund and possibly income protection insurance.

Alternatively is downsizing or moving to a cheaper area an option depending on the suitability etc of your current home.

I know this is a bit tangential but I saved a fortune on roof repairs by using a firm that used rope access to the roof rather than scaffolding. They were half the price of a conventional roofer who put up scaffolding. (£4k vs £9k). Check if there are any in your area (my roofer was hi-solutions but they are local).

When was your CCJ issued?

Thank you @Netaporter

Hi @zipadeeday about 6 months ago.

Thank you @SunshineOnARainyLeith I will look into that thanks

Is the CCJ paid and when does it drop off your Credit Report?

Thank you @PipMumsnet

Hi no its not paid yet but will be in about 2 months time. I've never had one before so I'm not sure how long they are on record for @SleafordSods

I thought it was 7 years. Things might have changed recently though so I could be wrong. But I know lenders really don't like them.

In any case, I rather think the mortgage broker has answered your question for you when they said that you couldn't remortgage. Your only options now are to try other mortgage lenders. How urgent is the roof? Is it actually leaking inside the property?

Hi @Bjorkdidit sorry to sound stupid but should I shop around different brokers or are the type of broker I would need more difficult to find. Going off what I pay for my mortgage now and how much a new roof and to pay off my debt will be affordable now my divorce is through and I know how I stand, thanks.

Hi @zipadeeday is that 7 years even if its been paid off in full? I feel so bloody stressed out. The roof is pretty knackered so I don't have an option other than fixing it.

Hi Op. You have various options.

• The CCJ wont drop off your credit record for the next 6 years so creditors will be cautious to lend you money (even though you’ll pay the CCJ off soon). You could try to borrow money from a high interest lender, but I would only do that if I really, really needed to replace my roof now rather than patch it up and replace it later as you’ll pay so much more back. Obviously a loan secured on the house will carry less interest.
• i don’t think you told us how much you pay towards your debts every month. Do you have a mix of loans, credit cards and the CCJ? Have you defaulted on your other debts? Your options do depend on your disposable income. For example- once you pay off your CCJ, can you increase payments to your credit cards, so you end up paying less interest as time goes by. Once those are paid off, maintain payments towards any loans (as interest on loans in added upfront so paying more than the contractual monthly instalment won’t make them cheaper) while also starting to save towards your roof?
• Once you pay off your CCJ (and consistently maintain contractual payments towards your other debts) your credit rating starts to improve slowly, so you might be able to remortgage in a year or 2 as your CCj debt will show as ‘satisfied’, even though CCJ won’t drop off your credit record until 6-7 years have passed since it was registered

if you want to share what your other debts are, whether you have defaulted or pay CMI and how much you pay every month, I can advise more.

It’s 6 years from the date the judgement was issued.

Once you’ve paid the debt in full, ask for proof from the Creditor and then email the Court that issued CCJ with the proof and ask for the debt to be “marked as satisfied”.

Wow @Gabitule thanks for all that info. One of the debts is to Next that I pay £25 per month, the other is to Very and that is £40. Lastly british gas which is £280 per month. So when mortgage and other bills are paid I don't have a huge amount left.

Very and Next usually work out like credit card debts where, if you only pay the minimum payments required, you’re really just covering the interest with only a tiny amount going towards the actual debt. So it would take you forever to clear the debt. The more you pay towards these debts, the less interest you end up paying and the sooner you clear the balance.

Is the £280 paid to British Gas just for a debt, or for both on-going usage and a debt? If they say that this is just for on-going usage (averaged over the year) I would challenge them and provide meter readings as £280 is very high, so it’s likely to include an amount towards a debt.

Assuming you pay £280 for both your on-going usage and your debt, B gas has set the debt repayment high as they want you to repay it within a year or less, but you can insist that you can’t afford it and ask them to spread the debt repayment element over a longer period. This means you would pay less than £280 to B Gas and the money saved from there can be used to increase your payments to Very and Next, as these are attracting high interest.

Once you clear the CCJ you can also use the extra money to pay extra towards the debts with the highest interest (Very, Next or other credit cards. But not loans - as I mentioned before, the interest on these has already been added at the start so paying more than the contractual repayments won’t help)

It might be worth calling a debt advice charity like National for free debt advice tailored to your circumstances. Depending on where you live, your Citizens Advice may have a good debt advice service (as their national debt service is very hit and miss). Or see if a local law centre offers free debt advice. Ask about the impact on credit rating for any solution you are presented with!