Shared ownership - refusal again

AliceBanned · 1 December 2016 at 8:17PM

I have been posting on and off for a while on this. I bought my shared ownership flat in 2013 (40% share) and have crept into debt during that time more and more though over the past 1.5 years have been a DFW and keep working on it with YNAB.

Progress is slow, partly I think because I am paying £850pm rent and mortgage, plus all the usual outgoings. I earn just under £32k and work in central London, live just outside so have expensive train fares, and live alone. Not had much of a life since I moved to be honest and I was renting for my whole life beforehand.

To cut a long story short I saw my lender (Halifax) yesterday and they refused me a bigger mortgage to staircase. My current mortgage is £47k and the value of my share is £89k according to Zoopla. It started off at £62k. I would have thought with the rise in equity and my regular income (same job for 9 years), I could at least staircase to 60-70% but no.

I am questioning whether it is worth me staying in the flat. I could sell up, use some of the equity to repay the debts, or go on a DMP which I am trying to resist strongly because my credit file is reasonable with no defaults etc at all over the years - just too much use of credit cards and just over £10k debt including my overdraft. Feel I am going round in circles but I am living frugally, just had a bit of bad luck with my car packing up after me spending on getting it fixed blah blah just a few expenses and it sets me back on the debt repayment.

I am trying to repay £500pm on the debts and have been achieving this for some time (then had some setbacks) and back on track again with no car this time. Still feels like it will take me a long time and Halifax mortgage adviser suggested I go back in a year. I am thinking I could do this with around £5k debt in a year's time (hopefully) but they may just turn me down again. Also service charge has gone up quite a bit and I feel like I am paying out but not achieving a lot, unless I am just panicking unnecessarily/! I am scared that when I am older I will still be paying rent on SO as I am 49 now.

Other option sell up, repay debts, rent for a year in a houseshare (find a nice one and they are not too pricey here) and then try and buy again but I may not get back in the market if prices go up too much?! Sorry if I sound like I want a crystal ball but I am on my own making these big decisions and stressing about debts, trying to force myself to repay them so quickly that I can't do much else.

Thrugelmir · 1 December 2016 at 9:22PM

If you are genuinely struggling to repay your debts then a DMP shouldn't be discounted. While you are describing not paying your creditors to schedule as "setbacks". In reality sounds as if you simply do not have the funds to manage your finances normally. The result of which is to leave further black marks on your credit record.

Have you spoken to National Debtline? I appreciate it's not easy to bite the bullet so to speak. But the stress that will be lifted if you sort your problems out once and for all, Shouldn't be underestimated.

AliceBanned · 1 December 2016 at 10:20PM

Thrugelmir wrote: »

If you are genuinely struggling to repay your debts then a DMP shouldn't be discounted. While you are describing not paying your creditors to schedule as "setbacks". In reality sounds as if you simply do not have the funds to manage your finances normally. The result of which is to leave further black marks on your credit record.

Have you spoken to National Debtline? I appreciate it's not easy to bite the bullet so to speak. But the stress that will be lifted if you sort your problems out once and for all, Shouldn't be underestimated.

Thanks Thrugelmir. I have not defaulted on anything and the interest rates range from 6.9% to 19.9% on all the cards and loans (4 cards and 3 loans). So I am paying my creditors but just so slowly that I feel like I'm getting nowhere and yet at the same time so fast that I can't do a lot else.

It is a tough call because yes I have been advised DMP by National Debtline and others but I know this would jeopardise my chance of increasing my mortgage even more perhaps than the debts..not sure!
Also I have got used to struggling with the debts alone and would feel I am sort of 'failing' if I go on a DMP now. I just can't tell what level of damage it would do to me as opposed to repaying the debts 'properly' but more slowly.

You are right about the stress levels but also a DMP is stressful and I honestly find it so hard to decide the best way forward. According to snowball calculator I now need 30 months to repay my debts. 30 months more of this no-life is a bit much after trying for so long.

kirtsypoos · 2 December 2016 at 12:31PM

Alice, I don't want to encourage more debt for you but have you tried applying for 0% balance transfers, at least if you could do this you would be paying chunks off of the actual amount owed rather than interest?

AliceBanned · 2 December 2016 at 12:55PM

kirtsypoos wrote: »

Alice, I don't want to encourage more debt for you but have you tried applying for 0% balance transfers, at least if you could do this you would be paying chunks off of the actual amount owed rather than interest?

Thanks kirstypoos - I am working on improving my credit rating all the time to get to this point. It is getting slowly better but due to the loans and cards I have at the moment, until they are a bit lower I can't do a balance transfer. I keep an eye on Noddle and recently managed to shift one card at 34% interest to a 14.9% loan with Ratesetter. For me loans are a bit better as the CCs just need to go - they are too expensive and bad for me but if I can get 0% now I will be more disciplined and repay them!

In the end I suppose this is all an education - it is so hard paying these off and causing me so many problems, that I won't look at debt in the same way again in the future. Really working on living within my means which is fairly depressing but should get easier when I have paid off the debt.

Thrugelmir · 2 December 2016 at 2:46PM

AliceBanned wrote: »

You are right about the stress levels but also a DMP is stressful and I honestly find it so hard to decide the best way forward. According to snowball calculator I now need 30 months to repay my debts. 30 months more of this no-life is a bit much after trying for so long.

Any possibility of a second job to generate some income. As tough choices aren't easy to make. A DMP will cause longer term damage beyond 30 months. Sounds as if you've done really well so far. Don't give up now. Is it possible to have a couple of months of absolute scrimping in order to accelerate the process.

AliceBanned · 2 December 2016 at 4:41PM

Thrugelmir wrote: »

Any possibility of a second job to generate some income. As tough choices aren't easy to make. A DMP will cause longer term damage beyond 30 months. Sounds as if you've done really well so far. Don't give up now. Is it possible to have a couple of months of absolute scrimping in order to accelerate the process.

Thanks Thrugelmir yes I am thinking along those lines. I am just flagging a bit.😬

I applied for Royal Mail xmas work. Was approved and now on waiting list. I agree scrimping for 2 or 3 months would help me turn a corner.

muhandis · 2 December 2016 at 5:38PM

If the Royal Mail xmas work is through Angard do make sure that you track your hours and days properly. I did a stint as an xmas temp in 2014 and they were utterly incompetent with paying correctly and on time. Might have got their act together by now though.

If you haven't done it before, it can be good fun and you get to meet a lot of interesting people

AliceBanned wrote: »

Thanks Thrugelmir yes I am thinking along those lines. I am just flagging a bit.😬

I applied for Royal Mail xmas work. Was approved and now on waiting list. I agree scrimping for 2 or 3 months would help me turn a corner.

ACG · 2 December 2016 at 5:52PM

Can you wrap the credit cards up in to a loan or has been suggested some 0% credit cards?

Have you tried a broker to help with staircasing? I do not do shared ownership mortgages so I do not really know how it all works but one lender saying no, does not mean they all will.

Have Halifax said no based on affordability or something else?

AliceBanned · 2 December 2016 at 7:09PM

muhandis wrote: »

If the Royal Mail xmas work is through Angard do make sure that you track your hours and days properly. I did a stint as an xmas temp in 2014 and they were utterly incompetent with paying correctly and on time. Might have got their act together by now though.

If you haven't done it before, it can be good fun and you get to meet a lot of interesting people

Hi and thanks. No I haven't done it before so thanks for the words of encouragement. I think I would be employed directly through Royal Mail as I haven't heard of Angard and all the documentation has RM logo etc. But I will keep an eye on the hours etc anyway.

I have only offered weekends and Fri and Sat nights:eek: so not sure whether they can fit me in for any shifts yet! There were a lot of people at the recruitment day and security etc took a few weeks but at least I am through. I have a week off in Jan so I might let them know I could do shifts then during the week.

AliceBanned · 2 December 2016 at 7:14PM

ACG wrote: »

Can you wrap the credit cards up in to a loan or has been suggested some 0% credit cards?

Have you tried a broker to help with staircasing? I do not do shared ownership mortgages so I do not really know how it all works but one lender saying no, does not mean they all will.

Have Halifax said no based on affordability or something else?

Thanks for your suggestions. I am trying to wrap it up but I have only just done this with the Ratesetter loan of £2500 so don't want to apply for more yet. Will do so in a couple of months. I am sure once the balance whizzes down I will get cheaper credit. I will soon be able to release the credit union savings as well. The credit union has annoyed me a bit - they helped me out years ago when I couldn't get credit elsewhere but the seem to have put their interest rates up and even though I have over £800 in savings they turned me down for a car loan recently. So there I am with savings stuck with them and they won't help me out. So I went to Ratesetter and am going to abandon the credit union once paid off. Forget loyalty!

Haven't tried a broker recently but about a year ago I enquired through a Help to Buy broker and they said the same - get rid of those debts. I think Help to Buy is even harder though. I think I will leave it until the spring and then see a broker. I don't want to do too many applications and especially not before my situation changes.

Also the Halifax is fixed until October 2017 so I would have to pay to leave Halifax at the moment. Though I will go to a broker for whole of market next time. Halifax I believe is one of the most flexible lenders when it comes to SO though. A lot of lenders avoid it completely of course.

Shared ownership - refusal again

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