Advice please negative equity deed of postponement

Hi Everyone, a bit of advice please ....
We have a fixed rate mortgage with Northern Rock which ends in september, we had been given a ridiculous new repayment nearly £250 more than what we are paying now which starts in September.
We have applied for a re mortgage through Abbey, which has been accepted on principle as it were.

We have a problem though, our Mortgage is currently £122,000 and we have a secured loan with First Plus of £57000.00 we have just found out our house is valued at £150,000 !!!! 6 months ago when we got the loan out it was valued at £185,0000.00 !!!!
We have been told by Abbey that they are airing on the side of caution that is why the value is so low. Our mortgage advisor at Abbey says the valuer said its valued at this because he thinks this is as low as it will go during the current decline.
We have to complete a Deed of Postponement with First Plus, on initial enquiries with First Plus, before we knew what the value was, they said they ok up to 110% used to be 125% but as long as its just a straight swap of mortgages and we are not borrowing more advisor says he has never seen one turned down.

The mortgage is in the name of my husband and I we have a excellent credit history between us, never missed a payment on anything etc.

Advice please due to negative equity do you think the Postponement will be accepted by First Plus? will they air on the side of caution like Abbey and their valuer? Should we have our house valued again? Do they look at our credit history when deciding?

Am 6 months pregnant, 2 other children and soon to go on Maternity leave so an extra £250 is out of the question ...
NEED SOME HONEST ADVICE PLEASE

Thank you in advance
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Replies

  • I don't think you'll have a problem if you aren't increasing your borrowing. You aren't putting First Plus to any greater risk at not getting their money back than they are already, so it makes sense for them to allow you to remortgage to keep your payments down.

    If ever a lender has done a credit check when allowing a Deed of postponement (First Plus), then I've never heard of it.

    If Abbey have ok'd the mortgage I don't think you need to worry.

    There's no point whatsoever in getting another valuation done as the Abbey will not take any notice of it.
    I am a Mortgage Consultant and don't like to be told what I can and can't put in a signature so long as it's legal and truthful.
  • thanks so much for your quick reply

    no we are not borrowing anymore but we do have negative equity , the secured loan and mortgage do not add up, they are more than the value of 150k. but then again we have never missed payments on the mortgage or secured loan but if this mortgage doesnt go through we might!!!
  • sorry me again, looked on Zoopla, house was valued at over 200k. I realise that is an estimate but still its a big difference between 150k and 200k. how do they value a house? when the valuer came he made a comment about the front garden being so untidy, (we live on a main road ) and hubby didnt get chance to tidy up the night before he came. We were only given 24 hrs notice before the valuer came. He said the rest of the house was immaculate beautiful infact ... .such a domestis goddess ha ha which is not easy at 6 months pregnant and a toddler running around !!!! do you think because he mentioned it it was an issue?
  • The garden being untidy isn't going have a bearing on things.

    DOPs being accepted have been discussed on another thread recently - all you can do really is wait until FP give you a decision I'm afraid.
  • delboypassdelboypass Forumite
    229 Posts
    Zoopla will use a crude measurement based on previous sale prices and multipliers

    What it will not take into consideration is the current state of the credit market and the credit crunch going on now and the continuing credit crunch which is now predicted out to 2015...

    Everything is becoming more expensive..

    I would say fix the morgage too as interest rates going to go up to combat inflation as it is starting to sky rocket...

    Also see todays news that UK is at the highest debt level in the G7 (and also the highest debt level EVER seen in the G7 of 173% per person - running at average wage £43,000 which is higher than i would have expected)
  • ziknikziknik Forumite
    248 Posts
    You took out the 57k loan for debt consolidation(?) 6 months ago. So you must have been living beyond your means for years.

    I can’t see the situation getting any better over the next few years.

    What are the details of the Abbey mortgage? Don’t tell me it’s fixed for 2 years. Your situation is going to be worse in 2 years, your house will be worth less (tidy garden or not)

    I’d suggest that you do some research on bankruptcy. It might be a good option for you.

    Have you got family you can move in with for a few years while you pay off your debts? I know it is not idea with 3 children, but some inconvenience now may save you 10s of thousands in losses.
  • we are in situation cos my hubby lived beyond his means before i met him and i have taken on his debts too due to the fact that i got married to him ... moving in with family is not an option at all and bankrupcy will result in my hubby losing his job. so we will be even worse off.

    yes it is fixed, but for 3 years and who knows what will appen in 3 years and yes am an optimist

    Am sure we are not the only ones in this postion and I just wanted advice on DOP's and whether it will be accepted.
    Do these companies want to lose money cos that will happen if we dont want the DOP cos we will be unable to pay the loan and mortgage. At the mo we are honouring payments but we wont if mortgage cos up to £250.
  • delboypassdelboypass Forumite
    229 Posts
    What did you do with the loan...

    £57k is a hell of a lot to get through in 6 months with nothing to either sell or return...


    Would take you best part of 10/15 years to save that amount im guessing so you must have known that the fan was turned on when blowing through it..
  • as i said earlier it was debt consolidation my hubby had run up over the years on cards, i married him i took it on to
  • silvercarsilvercar Forumite, Ambassador
    43.6K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    Relax for the moment.

    If you can afford to ride out the storm then the negative equity won't hit you. Its only when you sell it becomes an issue.

    There is no reason for the deed of postponement to be refused as you are not increasing your main mortgage, there is every reason for it to be allowed as the lender will know that without it you are more likely to default on your loan repayments and no-one would want to repossess on a second charge in negative equity at the moment.

    Chill and look forward to your new arrival.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, in my home and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
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