Mortgages are traditionally regarded as a “good” sort of debt. A mortgage lets you acquire a valuable asset – somewhere to live in – at what is usually a pretty low interest rate and avoid the costs and uncertainty of renting.
But even though mortgages are a sensible way to borrow, and mortgage rates are at record lows in 2016, they still have problems. And these can be made worse in Britain because of the high property prices. So there are quite a few Debt Camel articles about mortgages – this page brings together links to the most important of them.
Getting a mortgage
I have debts – can I get a mortgage? Having debts can create problems if you want to get a mortgage. Because you are having to make debt repayments, that takes up some of your income so it affects the lenders’ affordability calculations. And if you don’t have a spotless credit record, that can make it much harder to get a mortgage.
95% mortgages – what you need to know In 2017 there are now a lot of mortgages on offer if you only have a 5% deposit – good news, but be careful about the drawbacks.
Will recent defaults stop me getting a mortgage? This is answering a reader’s question in detail. He has inherited some money so wanted to know what his chances of getting a mortgage are.
I’m in a DMP – can I get a mortgage? Debt management can go on for a long time and can be shown on your credit file in various ways, so there isn’t a simple answer to this question, it depends on your situation.
How can you balance clearing your debts with saving for a deposit? There isn’t an easy answer to this question, but this article explorers what you should be thinking about.
Refused a mortgage – is this reasonable? There are millions of “mortgage prisoners” in Britain, who are stuck in their current mortgage because they don’t meet the new affordability rules that were introduced in 2014. Sometimes the lenders are applying these too strictly though and can be challenged.
Payday loans make it harder to get a mortgage A few years ago some payday lenders suggested that taking out their loans and repaying them improves your credit record. Unfortunately, mortgage lenders tend to see having payday loans on your credit history as a sign that you have had big financial difficulties. Many lenders won’t consider you for a mortgage if you have had a payday loan in the last year.
Is a long – 35 or 40 year – mortgage a good idea? Some people, especially first time buyers, are choosing very long mortgages to keep the monthly payments low. But these can run into problems, it’s not the great option it might appear.
Can you ever get a mortgage if you have been bankrupt? One of the main concerns people have about going bankrupt, especially if they are still quite young, is that they may never be able to get a mortgage in future. This isn’t right – although bankruptcy (and an IVA or a DRO, the other two types of insolvency in England and Wales) wrecks your credit record for six years, you can recover from this if you can get a good deposit together.
Can you use “Right to Buy” if you have debts? There is a clause which says you can’t have an arrangement with your creditors – find out what this means.
When you already have a mortgage
Fixed rate ending? Should your remortgage? More than a million people could save a few hundred or even a thousand pounds a year by getting a new fixed rate. Find out what your 4 options are at the end of a fixed rate and how to decide which is right for you.
Options if you have an interest-only mortgage At the end of an interest-only mortgage you have to repay the full amount, but nearly a million people in Britain don’t have a plan for how they can afford to do this. Many are hoping they can remortgage, or be allowed to carry on making their usual monthly payments, but this isn’t likely. If you are one of these people, find out what your real options are.
SMI is becoming only a loan SMI is the name given to the help you can get from the benefits system with your mortgage costs if you retired, unemployed, too ill to work etc. This is turning into a loan from April 2018 – but if you are out of work it’s still worth finding out about though!
Charging Orders and Orders for Sale If you have a house with equity and you are having problems with your unsecured debts, you may be worried about your creditors getting a charge on your house or even make you sell it. Find out the facts about this area.
Sell the house – a tough decision One of the main aims of debt advice is to let people stay in their own home – but this isn’t always the best decision, so have a think about whether it is right for you.
Repossession after bankruptcy Sometimes when everything has gone wrong and you have a house with negative equity you want a completely clean start after going bankrupt. Find out how to hand back the keys after bankruptcy and make sure your mortgage debt is included in your bankruptcy.
For remortgage/equity release and secured loan problems in you are in an IVA, look at the Guide to IVAs.
Interest rates & other news
Interest only mortgages and the problems for debt advisors A new report shows that there are now fewer interest-only mortgages. But for people that still have them, and debt advisors, these are still a difficult problem to handle well. (2016)
Will very low mortgage repossession rates continue? Three reasons why they may be going to increase from 2016
“Winter is coming” The Game of Thrones motto reminds us that the current “summer” of very low interest rates won’t go on for ever. Even though rates were cut to an all time low in August 2016, at some point they will rise again.