remortgage or sell?

gstir_2

Here is our current situation.

We have had money troubles in the last few years, we are slowly getting back on our feet again. We got into arrears with our mortgage, but we agreed with the lender (SPML) a repayment plan, however, they said because we could not pay arrears in full that they would still go ahead with legal action. We have kept up to date religiously with our repayments, but they seem to be going full steam ahead with the legal action, we got a writ served against us. I personally think this is a bit harsh seeing as we have kept up our repayments with current mortgage and arrears.
Our big question is, do we sell up and move on, (I am terrified of repossession as have a 2 year old) or can we try and remortgage?
I have been looking at a company today called Grosvenor Mortgages who says they can help with problem cases like ours, however, I dont want to be scammed, paying out money then to be told that our application has been declined.
Our property is currently worth £120k-£125k, and our outstanding mortgage is for 102k.
We are in our dream house, but due to some bad luck we fell into this mess.
Any advice would be really gratefully appreciated as I am having so many sleepless nights worrying.

mr_mortgage

http://www.adviceguide.org.uk/index/life/debt/mortgage_arrears.htm

The Citizen's Advice page there has some useful phone numbers.

With the help of a good advisor who will be able to assess your situation in much more detail than over an internet forum it would not seem insurmountable to stay in your home. If you are able to pay your monthly amount, and an arrears plan it would seem (at first glance) that you can afford to live there, but need to structure the debt in a way you can service without arrears hanging over your head.

If I were you, I'd go talk to the CAB and they can put you in touch with someone who understands your position and is experienced in these matters.

gstir_2

thank you for your response.

We have already been to the CAB, but they could not help us as they are no longer, or for the timebeing taking on any more cases like this. They suggested the local Advice Shop. We tried this, and got a really helpful man, but his best advice was for us to get a solicitor to deal with the writ etc. We then got an appt. with a local Solicitor, but they wanted to charge us £150 per hour that they dealt with our case. We just couldnt afford this sort of money, and to be honest, even if we could I think I would have rather paid that directly to our mortage arrears!

We are really trying to deal with this sensibly, but I kind of feel that we are just being left on our own, and not sure what to do or where to turn next.

hydsta

Judging by the lender you're with right now (SPML), i take it you are a non-conforming customer for whatever reason. I'm not sure what a writ is, however it sounds like they are trying to recoup your outstanding arrears. I dont know how much you owe them but if you cant afford to pay it back you need to find the money from somewhere, else i think the road will lead to repossesion. You could either borrow on credit cards, personal loans, overdrafts etc, however it might be more prudent to raise more money against your property due to lower interest rates. Using the conservative figure of 120k as the value of your house, you have an 85% loan to value. I think nowadays 90-95% LTV is the max you can have. However depending on whether you're employed or self employed and how much adverse credit you have this can be lower. Due to being adverse in the past and currently having a writ against you i would guess that you wouldnt be able to borrow much if anything more against your house. If you could raise 90-95% of your house thats an extra 6-12k you could raise. You've also got to consider whether Lender's consider you earn enough to borrow upto that amount. If you do borrow more, consider that your monthly repayments will go up, can you afford that? If you're not on an interest-only mortgage, you could remortgage on this basis as you're mortgage payments would be less. You should see an independent mortgage broker that doesnt charge an upfront fee to discuss your options. They can search the whole market for you and therefore save you some of the leg work. Aside from that, they should be experienced enough to know what lender's are likely to reject your application for a remortgage and which one's will look on your situation more favourbaly. A whole of market advisor can search the market for other subprime lenders, and also others who dont have a high street presence and harder to find. The other solution would be trade down to a smaller property. Thing is, its not a seller's market right now and you might not sell let alone get the amount you value your house at. You could also consider shared ownership schemes. There's a myriad of options, and i dont have all your details so you would need to speak to an indendent broker, they'll be able to go through all the options availbe to you. Whatever happens, dont let it get to the stage of repossession as this ruin your already poor credit record.

happybroker

that's exhausting!

I suspect that you were more than 3 months in arrears if SPML are proceeding with legal action. But I do think, given that you are maintaining your payments and paying extra to the arrears, that this is harsh.

The costs that will be being incurred and added to the mortgage debt will make your eyes water and I would also suspect that they are charging you a monthly fee for being in arrears that is eating into the overpayment you make every month, meaning they will charge you this fee for longer as you will be in arrears for longer...outragous.

Depending when you missed your mortgage payments and how many I suspect it may be difficult to remortgage and if you could the rate would be quite high.

If you are maintaining your payments and paying extra I would be very surprised if a right minded judge would grant a reposession order on the property. When and if a court date is set go to court yourself, explain the situation calmly stressing that you are paying + extra and also your concerns over the charges that are being added to the loan and I am pretty convinced that a posession order would not be granted but at worst they would grant one and suspend it so that the lender couldn't take the house unless you stop paying.

Speak to SPML, and very calmly ask that they stop legal proceedings as you have been keeping up with your payments. It's certainly worth asking. Also write a calm letter (not a strong complaint) explaining that you are doing your absolute best to repay the arrears but the charges that are being made are stopping you from doing this as quickly as you would like. What's the worst they could say?

Good luck, if you keep the payments up I think you should be ok

mr_mortgage

gstir,

If you could share come more of the figures, it could help understand your situation better. How many months have you been in arrears and what is the total amount of arrears outstanding? How much is your payment plan a month with them? When is the payment plan intended to end so you are no longer in arrears?

The more info, the better help!

gstir_2

thank you so far for the responses, very much appreciated.

ok, we are currently approx £1500 of arrears to pay towards mortgage, our monthly mortgage payment is £566 and we are repaying £640 each month, so just over £80 going towards the repayments. SPML have avised that to pay full mortgage off (incl. early redemption penalty) will be £92,100.

The secured loan we have with SPPL has about the same amount of arrears £1500, (loan was for 9k) just agreed repayment plan for this also, so will be kept up to date. (to pay off sec. loan would cost £11,200).

Our property is worth £120,000, (we are very fortunate, and live in an area where there is still a good property market).

i have been looking at more remortgage companies for adverse credit and mortgage arrears, but there are so many, I just dont know where to start (and who to trust!).

I just want to wipe the slate clean with SPML and start afresh, but I know easier said than done.

gstir_2

I have just been on the BM Solutions website, I saw in another thread this company had been recommended, it looks as though they may accept us according to their terms etc.

Is it worth making an appointment with a independent financial advisor to discuss my options?

*jobags*

As you are possibly facing repossession and ultimately homelessness could you see a Housing Options Officer at your local council

They may be able to fast track you to a money advice service aimed at preventing homelessness (ours is funded by us [housing dept] but provided by CAB who come into the office 1 day weekly for housing cases referred by the council). It's really a back door way into the jammed CAB system

Good luck

Jo