Can we get another Sub-Prime, Self Certified mortgage? Struggling with payments

Posted on 12 January 2008

Hi,

Help needed urgently please. Our fixed rate with mortgage express ends at the end of March 2008, which consists of a balance of £138,000 interest only and we have a secured loan with yesloans and mortgages. To clear this one will cost approximately £32,000. We are really struggling to keep up with payments, BUT have NOT missed or been late. However we have missed and been late with nearly every other bill that comes in (no CCJs as yet). Are we going to have real problems getting another sub-prime self certified mortgage? Any advice would be most helpful please.

Kind regards,

Liz

Hello Liz,

You are right to get some advice now, as you need to start your remortgage in the next week if it's going to be ready for the end of March.

Second mortgages are notoriously troublesome, but you have done really well not to have missed any payments on this, or your mortgage; they are the most important thing for your credit rating. Being late for bills repeatedly will catch up with you though, so you do need to make a change.

You do not say why you need to self-certify your income, if last time it was because one of you was self-employed when you applied for the mortgage and did not have three years worth of accounts, you might now be able to find a lender that can do the loan for you based on the income that you can now prove.  Credit has been easy to come by over the last few years, but that is over now, and unfortunately many people will find themselves in the position where they cannot cope, yet cannot remortgage. You say your payments are currently £1,025 in total but when you move to the lender's higher rate, this will go up a few hundred pounds.

The good news is, despite the credit crunch, there are some lenders who can offer sub-prime deals like they used to, and to find these you should have a broker work through your exact mortgage deal options. Firstly so you know you've covered all the bases, but also because brokers have good relationships with underwriters, and can often call up and get cases agreed outside of what you normally could yourself. Charcol does not charge for advice on sub-prime mortgages and they can be reached on 0800 066 5575 - free of charge.  The typical APR for bad credit business is 8.3% APR.

If they can't help you, I would strongly suggest that you sell your home and move to something smaller that you can afford, or rent, before you miss mortgage payments and run the risk of being repossessed and your credit rating being severely damaged:  because you are, I'm sorry to say, living beyond your means.

Please call a broker and start the process.

Best of luck.

Category: Bad credit, Secured loans

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