How to move a sub prime mortgage?

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darranstore

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About 16 months ago i was as i realise now "fooled" into taking out a sub prime mortgage. I went through a mortage broker at the time and after getting morgage approval from 2 prime banks i found when i sale agreed on a property suddenly those offers were not there anymore. this was blamed on a predicded slow down in the market and me being self employed so i was told. Stupidly i took up the ofer of this new mortgage that was brought to the table from g.e that i was told i would have no problem moving from once i made 6 months payments and i could take it too a regular lender. At the time i was so convinced i was doing the right thing finally getting onto teh property ladder i snapped the mortgage brokers hand off agreed to an unafortable monthly payment and crazy high interest rate.
The market was only to get worse in 6 months and it came and went and i couldnt get anyone to take it, 12 months came and went and still no luck, now at 16 months, 7 interest hikes and a now rate of 8.2% im still having no luck. I have brought this issue up with my lender on numerous occasions and they seem unwilling to come to and arrangment, they even told me over the phone the other day that the were in fact not a bank ???? and thats why the rates were not dropping like with other "banks". My mortage of 298,000 now has repayments of 2117 every month and i just cant do it any more. They have agreed to give me a 30 % reduction on my mortgage for 3 months only and this would result according to them in 3 missed payments going onto the icb which will distroy the chances of me ever moving it, it seems im trapped with them and the only way to proceed is default and distroy my credit rathing. I am self employed in a business which has noose dived in the current climate and have no idea what to do..... I am against the wall on this one and any suggestion would be greatly received...
I have investegated all ovious obtions with no luck....
 
I know this sounds like a stupid question but have you tried every bank? maybe contact a good large broker if you haven't already and they may be able to process your application in a more favourable way because they know what the banks look for. I'm afraid I can't offer any better advice than that. The situation sucks.

Also I am not sure how they can agree to reduce your mortgage for three months and then report you to the ICB for missed payments and hence trap you in the sub prime mortgage. If that is what they are suggesting, I would give serious consideration to contacting the Financial Regulator who is now responsible for all the sub prime lenders.
 
Hi, I hope this works out for you, I can think of three possible solutions:

1. It sounds like your only reason for going with GE Money originally was being self employed (did you self cert your income?). If you have business accounts organised at this stage, or even if you can get an accountants certificate completed for the lender, you should be able to apply through a prime bank.

2. If possible, can you get anyone else, PAYE or long term self employed to support a prime mortgage application with you? Maybe their income will get you over the line.

3. Last resort, try Springboard Mortgages, yes they are sub prime, but the rate should be lower than what you are paying at the moment, and they are part of the Irish Life group. Even Start would probably offer a better rate than 8.2%.

With the recent withdrawl of GE from the mortgage market, I'm not sure how competitive their rates are going to be from now on, but I think even with the cost of moving, it would be worthwhile. With the falling house values, a lot could depend on your loan to value. It would probably want to be 75% or less. Also make sure when applying to a prime lender that they are aware that you went sub prime as you were self employed, very different to having missed payments on previous loans.
 
Hi,

we are with GE money also since Sept 07 and have had increase also but last week we got our first decreas of 0.65% which took near 200 a month off our mortgage each month and that was after many a many a call for them to do something
 
Hi ! Thanks for the replies,

Just to answer a few of those questions...
At this stage i think i have in one way tried every bank, i am with a few different mortgage brokers and being advised that no one is really lending at the moment and even though i have a good credit history ( for the moment anyway) and a set of accounts for 2007 they still think my case is not strong enough. The reason being now is that my own personal accounts arent great, alot of work has dried up and ive had problems gettin paid off clients. Im bank with the A.I.B and normally found them very good though these days they seem to bounce very small direst debits if the funds arent there and this leave "un paid" stamped accross my bank statement. I could have probably kept a better eye on my accounts tho always found i was doing something else. At this stage i need to completely go back to the drawing bored and find away out.
In realation to GE i did contact the finacial regulator though they did say the reduced agreement with GE was unfair they did not do anything about it. I have tried to discuss the matter with GE over the last 3 months on so many occasions. They dont ring me back and couldnt seem less interested in my situation. The other day i rang them to get an appointment face to face with them , ofcourse they never rang me back and i called again and was told there was no point in meeting face to face as the person i would meet is out sourced and wouldnt be able to help me anyway. I am fed up ringing them and all i wanted to do was come clean about the affortability of my mortgage and come to some tempory arrangement which they seem not interested in, im sick thinking at this stage i have no other choice but to default...
I have 92% borrowed of 40 years with them. Loan amount was 298,000 which will cost me just less than a million over the full term for a house currently valued in todays climate at about 325,000.
When signing up for the mortgage there was some sort of sign up fee of €1500 for i dont know what:confused:
 
Hi again. I know First Active would have looked very favourably on your case before they ran into trouble. You are really looking for a lender who will switch at 92% LTV which narrows the choices a lot. I suppose the first action point is to get three months bank statements together with no referral fees or returns (easier said than done I know as many banks have a zero tolerance policy now). Brokers aren't dealing with Ulster Bank any more, so this may be a new route for you that hasn't been tried yet. Most lenders are ok if your accounts are dated within the last 18 months, although some like KBC now want a more recent picture, especially for anything in the construction trade.
If all else fails, I really think it's worth a few GE Money clients getting together to lobby for rate changes. Most sub prime lenders were pricing on the basis most of their clients would be moving mortgage in 2-3 years, so they only had a couple of years to make a few quid. Moving back to prime is no longer a reality for many clients now, so they can continue to charge these rates well into the future, which is ethically questionable in my opinion. The interbank rate is between 2-3%. Charging you 8% is a margin of 5%. They are creaming €14,900 per annum on your mortgage. The €1,500 charge at the start would have been the 0.5% arrangement fee from GE.
 
Another alternative would be to sell your house particularly as it's worth more than the loan. Are you sure it's worth more than the mortgage? What did you purchase it for and what was the mortgage at that time? If you can sell for more than the mortgage you can clear the arrears etc. You obviously do not have bank statements that any bank would consider now due to the 'unpaid' written on them, this will send alarm bells ringing. Also your loan to value of 92% is considered high in today's climate. Do you have any other debt other than the mortgage, I suggest you do the money makeover section to get better advice as I realise selling after all this hassle might seem drastic but if you give more details of your finances there may be some other options for you.
 
Many thanks for all the reploes and suggestions !
In response to a few questions my day to day bank at the moment would unpay a €10 dd and write unpaid on ur accound whilst deductiong the unpaid fee of €10... Its crazy, i think this is what has goe against me the most as i do have scattered a handfull of unpaids on my account. The reasons being is that work has slowed down and i am finding hard to get paid for some jobs and the cash is drying up. I will have to try and manage my accounts better by first of all canceling all DD's so this unpaid thing will stop anyway!
Selling the house really isnt an option, i just dont think people are buying full stop and it could just be a waste of time, aswell as this even if i did sell and clear the loan ive lost the deposit which i will never raise again of 34,000, all the fee's, 32,000 worth of mortgage payments a mental 30,000 spent doing it up. I would prefare somehow to ride the wave and hold on to the house with my fingers crossed. Appart from the mortgage my main out goings would be utilities, servicing a car loan of 11,000 and credit cards carrying business debt around on. Its amazing how much has changed since last year, i really never say myself having to hold on to that mortgage rate for so long and the whole thing was one big con, i cant call GE back again as im wasting my time and just fustrating myslef even more!
 
Darran

Just to clarify a point of information. From my broking days the arrangement with GE was that they would reduce your repayment by a third for 3 months after which you would revert to having to pay 2 payments in the fourth month. Your ICB profile would not be affected until the fourth month and you would only show as having 2 payments being missed in the fourth month should you be unable to pay the fourth months repayment together with the backdated arrears.

On the flip side, if your situation sorted itself out by the fourth month your ICB profile would remain unaffected.
 
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