Should I stay or should I go...?

panickymum

Hi all

Having established that my new landlord will take the bankruptcy clause out of my tenancy agreement (yay!) we have a date to go and sign the contract...and now I am scared if we are doing the right thing or not. Our intention was to go for vol repo as we have been unable to sell and the current mortgage is a struggle but the future payment (starts in Jan) even more so.

Our situation is that we have 73k of unsecured debt but £20k of this is a NatWest loan and we have already had to fill in the court paperwork for this. I am concerned that this debt will soon be a charging order so won't be included in BR.

Our house is on the market for £150k and has had no viewings. Mortgage is £145k and three months in arrears (saving for BR fees and deposit on a rented). There is a 4k early redemption fee on the mortgage so we would have to get an asking price offer v quickly to be worth us selling it.

Mortgage payment is £770 interest only and will go up to £900 in January. Rent is £600.

CAB advised us that the OR would force us to sell which kind of spurred us down the vol repo route. But given that I see some of the advice on here is that if you are in neg equity then the OR has no interest, I am getting cold feet and wonder if we should hold on to the house and see what happens. It would be a MAJOR struggle but if my OH gets back to work (he has been unwell for a year now so who knows when that will be) we then could afford the mortgage so long as the unsecured all went into BR.

It's all just so unknown and a lot depends on if my OH ever gets back to work. If he doesn't, deep down I know that £900 is unmanageable long term but if he did get back to work would we feel we had walked away from the hosue too easily?

I'm so confused, any thoughts would be much appreciated. Esp on the subject of would we get to keep the house in the first place?

Thanks all

fiveyearplan

panickymum wrote: »

Hi all

Having established that my new landlord will take the bankruptcy clause out of my tenancy agreement (yay!) we have a date to go and sign the contract...and now I am scared if we are doing the right thing or not. Our intention was to go for vol repo as we have been unable to sell and the current mortgage is a struggle but the future payment (starts in Jan) even more so. Good news!

Our situation is that we have 73k of unsecured debt but £20k of this is a NatWest loan and we have already had to fill in the court paperwork for this. I am concerned that this debt will soon be a charging order so won't be included in BR. It will be included in BR if you go BR before it goes to court

Our house is on the market for £150k and has had no viewings. Mortgage is £145k and three months in arrears (saving for BR fees and deposit on a rented). There is a 4k early redemption fee on the mortgage so we would have to get an asking price offer v quickly to be worth us selling it. If you sell it for the asking price you would be losing any money you've put into it already so if you are going br there isn't much point in trying to sell it yourself.

Mortgage payment is £770 interest only and will go up to £900 in January. Rent is £600.

CAB advised us that the OR would force us to sell which kind of spurred us down the vol repo route. i don't see why the OR would force you to sell But given that I see some of the advice on here is that if you are in neg equity then the OR has no interest, I am getting cold feet and wonder if we should hold on to the house and see what happens. It would be a MAJOR struggle but if my OH gets back to work (he has been unwell for a year now so who knows when that will be) we then could afford the mortgage so long as the unsecured all went into BR. How realistic do you think it is that he will get back to work and how many months arrears will you have by then?

It's all just so unknown and a lot depends on if my OH ever gets back to work. If he doesn't, deep down I know that £900 is unmanageable long term but if he did get back to work would we feel we had walked away from the hosue too easily?

I'm so confused, any thoughts would be much appreciated. Esp on the subject of would we get to keep the house in the first place?

Thanks all

It looks like you can't afford your house as it stands especially with all the other debt. If you go bankrupt I would do it without delay before a charging order turns that natwest debt into secured debt. If you've already started the road to renting I think that is what I would do in your position. If you are 3 months in arrears with your mortgage it won't be long before they start repossession and if you are already settled into a new home and bankrupt you will really have nothing to worry about and can truly have a fresh start.

panickymum

Thanks 5YP. We were all set (the rental is lovely-nicer than what we have) just I am getting cold feet, thinking things like...will we ever get back on the property ladder (we are both late thirties and have a child). If we were renting it would be difficult to ever save a deposit for a mortgage again if he never works. Then again, if he never works again we can't afford the mortgage we have. Truth is we don't know if he'll get back to work. he has a major back problem and has been off 12 months already.

I suppose I am scared of the unknown. I wish I had faced this years ago instead of consolidating debt left right and centre always assuming we'd pay it off eventually, never dreaming one of us would be unable to work. But I guess lots of people here feel just the same - hindsight is a wonderful thing!

betterlatethannever

PM, think of renting as a nice security net for you and the family...no worries if something falls off, breaks down or gives up and the rent will be covered (or mostly covered, in some cases) if your out of work.

My ex mother in law got a mortgage and back on the property ladder when she was in her late 50's and i know of a lot of others that have done the same. Never say never, and in the currently climate, your probably in the best place possible.

fiveyearplan

Its normal to be getting cold feet, you are making a huge decision but based on what you've said here, I think you are making the right decision.

december

Although I've never been a homeowner, and what I'm about to say doesn't isn't hugely relevant, I'm beginning to see its benefits more and more. We pay a fixed amount each month which can only go up once a year (unlike interest rates), we live in a house which we couldn't afford to buy (it was bought for £177k), we don't have the hassle of worrying if the central heating breaks down or if there is a problem with the plumbing (which there is at the moment) and if we decide we want to move somewhere else in the country, we have the freedom to do that.

I'm not trying to make light of your situation as it must be very hard to contemplate letting go of the house you made your home but if it is the case that your husband gets back to work in the future, there would be nothing stopping you from saving any surplus money you have (after if and when the OR imposes an IPA) towards a deposit.

December