Switcher Refused - poor credit rating

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Davetherave

New Member
Messages
3
Income details
Net monthly 6500 NETT I earn 12,000 (GROSS) as a self employed contractor

I am married with 3 kids 10-11-12. Wife is a homemaker.

Home loan
Lender: PTSB
Amount outstanding: 380K, 22 yrs remaining
Value of home: 520K
Interest rate: BAD tracker – 3.25
Monthly repayment: 2,100
Amount in arrears: Never missed a payment since 2006

Other Loans/Creditors
None
No Credit Cards

Savings and investments

3,000 in credit union

I am a director of a Limited company which has no major capital


Problem Statement:

I am paying a high interest (3.25%) on my large mortgage (380K) and I want to switch.

4/3.5yrs ago I ran into financial trouble and stopped paying my credit union loan of 20k. The credit union initiated legal proceedings. This appears on my credit rating and will remain there for another 1.5 yrs. The credit union loan has been paid in full since May 2021.
I have applied to switch to U.B. I have been refused.
As far I I understand I have the following options:

1. Do nothing and wait on 3.25% for 1.5 yrs until the 5year credit rating timeline passes, then apply to switch

2. Take the 2.95% 3y fixed PTSB offer that has been proposed by the Bank

3. Is there any other BETTER options available??? Will any bank touch me with a poor credit rating, even over 3yrs back.
 
Not the main issue here but you only have €3k savings on a net income of €6.5k p.m.?!

Could UB have refused you because they're exiting the market?
Have you tried any other lenders?
 
Davetherave said:
4/3.5yrs ago I ran into financial trouble and stopped paying my credit union loan of 20k. The credit union initiated legal proceedings.
Click to expand...

I really don't think any lender will consider you based on this other than F.I. but they charge sub-prime rates.

You are stuck with ptsb for another 18 months.

And permanent tsb exploit existing customers by offering lower rates and cash back to new customers.

I think you should remain on variable and move when your ICB record is clear

Don't fix for 3 years.

You could fix for 2 years but that would not save you much over the variable rate.
You would save 0.15% over what you are currently paying. That is €570 a year.
Probably worth doing as you won't be able to start applying to move for 18 months and it will take a few months for the paperwork.

I think you are better off not applying to any other lenders just now as you will have a reject on your file with them, so even if your ICB record is clean, they will see your history.

Brendan



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Thanks Brendan,

Good Advise. I will fix for 2 years and re-apply in 2023.
It is a heavy price to pay for sticking my head in the sand 3.5 years ago.

My main lesson in all this is that I should have engaged more with my creditors and not ignored them along the way.

Many Thanks,

Davetherave.
 
Davetherave said:
4/3.5yrs ago I ran into financial trouble and stopped paying my credit union loan of 20k. The credit union initiated legal proceedings. This appears on my credit rating and will remain there for another 1.5 yrs. The credit union loan has been paid in full since May 2021.
Click to expand...
Davetherave said:
My main lesson in all this is that I should have engaged more with my creditors and not ignored them along the way.
Click to expand...
You say creditors, plural.
Was there more than just the CU involved in your bad debts and negative credit record?
 
Hello ClubMan,

Credit Union was the only negative mark on the credit report.
I should have stated creditor in previous post.

Thanks for all the help,

DaveDeRave
 
Is there any scope to increase your monthly repayments? 3.25% after tax is an unbeatable guaranteed return on paying off your mortgage early. If overpayments are an option, you might not want to fix the whole principal.
 
ClubMan said:
Not the main issue here but you only have €3k savings on a net income of €6.5k p.m.?!

Could UB have refused you because they're exiting the market?
Have you tried any other lenders?
Click to expand...
I would say that IS the main issue for a self-employed contractor. 3k is not even 1 month's family expenditure. What is the plan if work dries up / a contract comes to an end? .I wouldn't be increasing mortgage repayments, but instead, regularly saving whatever the OP can afford, even if it's only €500 per month (ideally more) and even if it's returning zero interest.

I know that's not the OP's questions and Brendan's mortgage advice looks sound to me.
 
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