Remortgage With Defaults/Arrangements

[DNW]

Hi folks

We've been stuck paying an over-inflated standard mortgage for years and now that it's coming up to 6 years+ since most of our debts were defaulted, we're considering the possibility of my partner taking retirement from his long-term employer and using most of his pension lump sum to clear around half of our mortgage, and then reducing the remaining term.

Will the fact that we had all the defaults (and are still making token payments against a couple of debts) be incredibly limiting in terms of mortgage lenders / rates?

[cymruambyth]

Remember that 6 years and 1 month after a default is registered with a CRA they drop off your records even if you are paying a small sum.

[DNW]

I didn't realise those that were still receiving payments would drop off too, I assumed they'd be there until they'd been cleared.That's really good to know, thanks Cym

Given that we've had no formal credit (other than mobile phone contracts) for over 6 years, would we need to spend time rebuilding our rating to be a viable option to standard High Street lenders or would it potentially be a case of going to a mortgage advisor and seeing what options they give us?

We've a few months yet before this becomes a properly viable option as there's still one debt which won't become SB until around August, I'm just trying to look ahead and reassure OH that he won't have to stay in this particular job for another 25 years! .

[Still Waving]

Would you also consider remortgaging with your current provider? It could mean less admin hassle, and possibly lower associated fees.

[DNW]

Yes, I’d definitely consider staying with them - they are one of the debts (credit card) I’m still making token payments on so I’ve avoided contacting them about the mortgage so far in case it pushed them into action with the cc. Thankfully it’s one of smaller debts so hopefully we’ll be in a position to negotiate a settlement in the not too distant future as I certainly don’t want to end up in a situation where they want to add it on to the mortgage (been there, done that in the past, before running up even more debts again afterwards).

[February17]

I would wait until the autumn when your 6 years is up and then check your credit file every month and see what drops off.

If one of the unpaid cards is with the bank that you have a mortgage with then they might not be the best option for your first attempt at new credit as you will still be on their system and you dont want the computer saying no.

When your file is clear I would try a broker that specialises in unusual credit history and see what you can get, maybe go for a low introductory rate and then remortgage as your credit history improves and as the introductory rates expire.

Good luck.

[DNW]

Thanks Feb17 Good plan about waiting and checking the credit files later on, it's something I've avoided doing for over 6 years as I know it won't be a pretty sight lol.

A low intro rate for a couple of years is exactly what I'm hoping we'll be able to do, as such once my partner does receive his pension lump sum and uses it for the mortgage, the loan to value of it will be reduced which should help with rates too I'm hoping (or at least balance out the rubbish credit history).

[February17]

I thought you had been checking your credit file so suggested waiting until you get nearer the time for some final checks.

If you haven't looked at your credit report for 6 years it's time to look so that you can check the default dates are correct and look for any other errors such as electoral role errors.

One of my defaults has the wrong date which I will correct sometime, no rush yet as I am only 1 year in so plenty of time to watch and see what changes.

some of the free credit report sites are

https://www.noddle.co.uk/

https://www.clearscore.com/

https://www.moneysavingexpert.com/creditclub

Be aware that most of the 'free' sites will try to sell you credit and loans so just ignore the offers to 'help' as that would result in searches on your file that you don't want.
All you need is to see the various account default details.

My favourite report site is https://www.checkmyfile.com/ This has a monthly fee after the first 30 days, so maybe try that and then cancel or do what I do and 'pause' the account for 6 months so you don't get charged for a while. re-enable it when you want to check nearer application time.

I find that checkmyfile gives more data than the free sites, it shows the 'reported until' date which is useful to help spot errors.

[DNW]

Great info and thanks for the links, I think it was probably Experian I used last time. But no, I've not been anywhere near our credit reports in a very long time - I thought I'd read something about it flagging up things that could make creditors become more interested in you, but to be honest my head was completely all over the place 6 years ago when the rug was well and truly pulled from under us, so it's quite possible I misread or misunderstood at that time.

I'm pretty sure my own records are spot on with dates as being meticulously organised with paperwork has hugely helped me to get through the last few years, but as you say, I should probably check to make sure that the dates have all been reported correctly.

[Joanna Connolly Solicitors]

We've been stuck paying an over-inflated standard mortgage for years and now that it's coming up to 6 years+ since most of our debts were defaulted, we're considering the possibility of my partner taking retirement from his long-term employer and using most of his pension lump sum to clear around half of our mortgage, and then reducing the remaining term.

Will the fact that we had all the defaults (and are still making token payments against a couple of debts) be incredibly limiting in terms of mortgage lenders / rates?

This is probably silly question, but if your partner is planning to retire how will the mortgage be paid after that?

And do you mind me asking which are the couple of debts you're still paying and why are you still paying them?

Di

[DNW]

This is probably silly question, but if your partner is planning to retire how will the mortgage be paid after that?

And do you mind me asking which are the couple of debts you're still paying and why are you still paying them?

Di

No question is a silly question - someone very wise called PlanB said that to me once

He'll carry on working elsewhere, he knows he can't 'retire' in the normal sense, but the idea being he can 'down size' to just one job instead of the 2 he's working at the moment (he works shifts and has quite a bit of time off so works a secondary job). With his monthly pension, income from his secondary job, reduced mortgage, along with the income from my 2 jobs, it should be perfectly do-able, although I am trying to encourage him to hang on for a couple more years to hit a better lump sum. He's public sector though and pensions are being changed all the time so it's difficult to know whether he'd be better leaving soon, or waiting and risking them moving goal posts again. It's frustrating as at one time his projected lump sum would've easily cleared the mortgage with a good chunk to spare.


The debts still receiving token payments were all suggested to be most likely to be enforceable when I started this 6+ years ago, so I just left them running with token payments while I fought the bigger UE battles -

• a 14k loan which was quite new at the time of starting the UE journey, and they've been happily accepting £1 a month with no real hassle at all so I've just left that running while I save towards a lump sum settlement at some point when they get fed up of £1p/m.
• £1500 or so on a credit card which is held by the same bank as our mortgage so I've kept that running also at £1p/m which they've been happy enough with
• £2000 on a credit card which I've been paying £10p/m for reasons that are quite silly. It was suggested most like enforceable and the CC company were quite nice to me and seemed happy with tokens, so I just left those running as I couldn't cope with the idea of more fighting DCA's at that time. It felt like a tiny mole hill in the grand scheme of how much we owed then.

[Never-In-Doubt]

Why don't you apply for your free statutory credit report via MSE Credit Club (Experian data), Noddle (Call Credit data) & ClearScore (Equifax data) and then you'll see what data is there.... if you have any queries feel free to email me so it's not public here. You can get info on the above 3 links here (scroll down a little bit) -> https://www.all-about-debt.co.uk/credit-fraud-agencies

As you were previously advised, whether a default is dormant or being paid, the entry will always drop off after expiry (6 years) so don't worry about those you're paying. If you get your reports though (as above), bear in mind that they could have messed up and re-applied an AP status as well as the default entry in which case you'd need to argue for the default to be put back / the AP markers are removed because the AP status would last a further 6+ years from date of last payment made (on a rolling month-by-month basis).

[DNW]

Thanks Nids

I've still avoiding signing up for or looking at any credit check stuff yet as we've one account which should hit SB this August so I thought maybe I should hang on until at least Oct/Nov to make sure that was in the clear before potentially drawing attention to ourselves. Is it wise to leave it a few more months or should I check it sooner to make sure it's as tidy as it should be at this stage?

[Joanna Connolly Solicitors]

He'll carry on working elsewhere, he knows he can't 'retire' in the normal sense, but the idea being he can 'down size' to just one job instead of the 2 he's working at the moment (he works shifts and has quite a bit of time off so works a secondary job). With his monthly pension, income from his secondary job, reduced mortgage, along with the income from my 2 jobs, it should be perfectly do-able, although I am trying to encourage him to hang on for a couple more years to hit a better lump sum. He's public sector though and pensions are being changed all the time so it's difficult to know whether he'd be better leaving soon, or waiting and risking them moving goal posts again.

Gosh you're both working two jobs!

One other thing to keep in mind is age. The older you get the more limited the available mortgage products become since some will only lend if the loan expires by the time you're 65 etc.

I have manage to source one that will lend until I'm 90 years old but the interest rate is punitive (I'm already over 65 years old).

Di

[DNW]

We've both always worked more than one job so it doesn't feel unusual to us and it's helped a lot with being able to get some savings together to help pay off the last few debts if necessary when they do eventually hassle or offer low settlements.

The retirement is younger than statutory age, hopefully before he's 60 if things do work out as hoped, but we'd still like to get the mortgage term reduced from it's current 10 years to a max of about 5 years so hopefully we won't be too restricted, but I admit age wasn't something I'd considered at all, I just begrudge paying more than twice the monthly payment than a close friend new buyer with the same size mortgage.

I am starting to think the credit file is clearing up a little as I've recently received a credit card mailer through from a high street lender rather than the high risk ones of the last couple of years but I'm still wary about checking the records fully until after Sept and the final SB date.