Porting mortgage with credit card debt

[Richjones19772]

Hello
I am looking for some debt advice please.I am thinking of porting my mortgage soon with and hopefully borrowing a little extra money. I have only had the mortgage 6 months and during this time my credit file has took a nose dive due the amount of debt on my credit cards ( 16k) . Payments are up to date and there are no defaults on the file it's simply low because of the high credit card usage.I was thinking of applying for a consolation loan and clearing it but I'm not sure if I'd even be accepted for one?, other than that my last resort would be a DMP.
Thank you for any help in advance.
oh and my mortgage is with Natwest.

[PlanB]

Re: Porting mortgage with credit card debt

A quick but obvious question. Does your mortgage contract allow for porting? Some do and some don't regardless of how squeaky clean your credit file is.

[PlanB]

Re: Porting mortgage with credit card debt

I am thinking of porting my mortgage soon with and hopefully borrowing a little extra money.

. . . . other than that my last resort would be a DMP.

Next question is why do you want to port your mortgage? Are you buying a new property? Or do you mean you are seeking a remortgage of your existing property to raise capital to clear debts?

If you've got debts (we all have on here and I think I hold the record at £151k ) are you thinking of downsizing under pressure to pay these? We may be able to suggest alternatives.

You talk of a possible consolidation loan or a DMP so let's take a look at everything (if that's ok with you) in case there's a better way forward.

Plan B x

[Richjones19772]

Re: Porting mortgage with credit card debt

Thanks plan B. I have enquired an my mortgage is portable, looking to move house similar cost or borrowing a little more..would like to consolidate the credit cards an I have already enquired with my bank but they refused to give me a loan as they would only take basic salary and not bonus's ( which I fair chunk of my wage is made from). The last option would be the DMP but I guess once that's started my mortgage port would be out of the question.

[odetter]

Re: Porting mortgage with credit card debt

I personally would never advise converting Unsecured debt into Secured debt.
It is a slippery slope.
Your first priority is to keep the roof over your head.

[cymruambyth]

Re: Porting mortgage with credit card debt

DMP will end chances of porting your mortgage. Consolidating loans into your mortgage usually results in interest only mortgages, plus interest rates are going to go up, so even if you could get a good deal, a few years down the line you could really be hammered. (PlanB sorry but I can beat your record )

[Never-In-Doubt]

Re: Porting mortgage with credit card debt

(PlanB sorry but I can beat your record )

Do you have more than £150k in unsecured debt ie non mortgage?

[PlanB]

Re: Porting mortgage with credit card debt

looking to move house similar cost or borrowing a little more..would like to consolidate the credit cards an I have already enquired with my bank but they refused to give me a loan as they would only take basic salary and not bonus's ( which I fair chunk of my wage is made from). The last option would be the DMP but I guess once that's started my mortgage port would be out of the question.

Is the motivation for your house move related to these credit card accounts or do you want to move anyway since you say you're not downsizing or upsizing for more space? It costs masses of money to sell and buy with agent's fees, legal costs, survey, stamp duty, removals which could aggravate your current cash-flow situation. Maybe you need to move location which is a different matter. But moving to restructure your finances may not be the best option.

If none of these credit cards has defaulted and your payments are all up-to-date then there is no reason for you to fail a mortgage port. Having too much credit can sometimes spook a lender into thinking you're overstretched (in their eyes) but your lender was happy to grant you a mortgage only six months ago so I see no reason why they wouldn't agree to your port now. You will go through underwriting again but you passed their criteria last time so you should pass it again this time unless there has been a significant change in your circumstances (has there?).

If your bank manager refused you a consolidation loan that means he didn't want to lend not that no one else would lend. Normally provable bonuses (with a history of consistence) are taken into consideration for mortgages. Is it the same bank who provides your mortgage?

Once you go into a DMP you'll default on all your unsecured debt and won't be able to get another mortgage (or port this one) for at least three years. In which case why not try for your port now and if successful you could dump the debts into a DMP or whatever once that's all gone through.

[cymruambyth]

Re: Porting mortgage with credit card debt

Do you have more than £150k in unsecured debt ie non mortgage?

before I started my journey, combined yes.

[Richjones19772]

Re: Porting mortgage with credit card debt

Thanks plan b.The house move is basically to stop a long commute. Six months ago my credit card debt was around 8k now it's doubled this is the reason I was worried about them not porting it over.

[PlanB]

Re: Porting mortgage with credit card debt

PlanB sorry but I can beat your record

I must try harder

[PlanB]

Re: Porting mortgage with credit card debt

The house move is basically to stop a long commute. Six months ago my credit card debt was around 8k now it's doubled this is the reason I was worried about them not porting it over.

If all your credit card debt is being serviced you may still be ok. If you've made six mortgage payments in a row then that'll definitely help. That sends out the signal that despite your outgoings you can manage the mortgage, but I would hesitate to ask for a further advance because they will look more closely if you are asking for more money.

Are you worried that you may struggle to keep up with the credit card contractual payments? If that's the case then maybe you should try for your mortgage port sooner rather than later in case the shit hits the fan.

The other thing is that your long commute must be costing you serious money in either petrol or rail fares. Some lenders look at overall household expenditure as well as income to assess affordability in which case you can point out that your expenditure will reduce substantially once you stop the commute won't it

Is there a reason why you want to port your mortgage rather than apply for a new one with a different lender? Are you locked into a fixed period with an exit penalty (ERC)?

[Richjones19772]

Re: Porting mortgage with credit card debt

All my mortgage payments have been on time and in full. I am starting to worry about the card payments though at the moment I'm paying over £400 a month and it's starting to get very tight. Forgive me for being ignorant but how can I port my mortgage before selling my property or sorting out a new property?

[PlanB]

Re: Porting mortgage with credit card debt

how can I port my mortgage before selling my property or sorting out a new property?

You can't. What I meant was you need to 'get on with it' if you think you're about to default on a credit card.

Most mortgage offers have a shelf-life of six months. Once you find a suitable property you can make your application and if accepted then you will have a maximum of six months to sell your home and complete on the new one with no further credit checks (normally but no guarantee). If you change your mind on the property or the sale falls through you can usually amend the mortgage offer to a substitute property keeping the same mortgage terms.

In the past I have deliberately sought a mortgage on a property which I had no intention of buying simply to get the loan offer in the bag, and then I switched it to a different property. This means letting down the seller but all's fair in love and war and property business in my book However bare in mind that you will lose the money you spend on the survey of the first property.

But these tactics are not for the feint-hearted or financially naïve and you may benefit from using a broker to stand between you and a lender. That way you avoid saying the wrong thing to the bank. Brokers know how to play the game otherwise they won't get their commission

[Richjones19772]

Re: Porting mortgage with credit card debt

Thanks plan b very useful info ! Cheers