Stuck between a rock and a hard place!!!

alien28

Good Morning to you all,

I write here today desperately trying to get as much advise I can on my current situation. In November my lower rate fixed period ends on my mortgage and will put my monthly payments much higher than I can afford and the possibility of remortgaging is looking very unlikely.

To give you a better understanding I hope you don't mind if I quickly outlay the circumstance running up to this.

I will be honest, I had a drink problem that took over my life and culminated about 2.5 years ago. I have not touched a drop since then but I still am feeling the effects that it had on financial situation more than ever.

I had managed to get into debt on a number of fronts but over the last 2 years I have worked hard and done a bit of financing to clear almost all of this. I discovered during this time that one lender (a bank) has placed a default notice on my account. This was done during a time I written them letters stating that I was getting advice from the CCCS (Credit Consumer Counsilling Service) and starting making token payments and then finally reached a "full and final settlement" (all happening around the time I was later to discover the default notice was place despite all the letters going back and forth).

I am currently fighting this default through the Financial Ombudsmans complaint service (Since June) after exhausting the banks complaints procedure. But I was told yesterday that it could around 6 months before I can get any news from them, due to the large number of issues they are currently dealing with.

If they find in my favour I'm told their shouldn't be any problems remortgaging as the rest of my credit file has slowly been healing. However it is now looking unlikely that I am going to get a decision before my fixed period is up.

My current mortgage, due to the default was not very good, a interest only on a higher % at the time than most, this done to keep the monthly costs down. The % interst rate goes up in November and pushes the paymenr beyond my current means and after speaking to adivsors at London & Country they say even IF I could get a remortgage is would likely be only 80% of house value (meaning I would have to find £7-8k upfront and at 8.5% interest (about the same as the rate of the mortgage I am on will go to). Which leaves me the option to sell but in the current climate thats not looking too good either.

I am currently going looking into reducing as much of my other outgoings as possible and increasing my income by selling what I can from my house, but if anyone has any other sugesstions I am all ears.

Sorry for the long post. Thank you for reading.

beecher

Is it possible for you take in a lodger? Otherwise putting it up for sale seems like the best option - do you still have some equity in the property?

alien28

The equity in the house is slowly being eaten away, although I believe there is still some left! There are a number of houses unsold on my street that have been that way for many months now and so this obviously makes me nervous to try and sell.

The option of a lodger is a strong possibilty. The only reason thing that worries me is if things dont work out financial even with that help.

beecher

I'd recommend going over to the Debt Free Wannabee forum and posting there to get help with cutting down on your outgoings.

Good luck.

alien28

Using the services on this site I have already reduced my debt down to my mortgage and 1 Credit card which will be paid off within the next month or two. I also scrutinise my outgoings every week and so know exactly where I can reduce spending. This unfortunately may not be enough. But Thank you Beecher for your suggestions they are much appreciated.

lynzpower

is there any chance at all you could get a second job? Preferably one thats quite lucrative..( eg wedding market)

are you on interest only at the moment?

alien28

I am on interest only unfortunately yes. I have also considered a 2nd job but would be limited as to my choices. I work full time (which in volves a decent amount of travel) and I have also just started university to get my degree (part time & sponsored by my employer).

alien28

...wedding market?!?

Conrad

Just sell and then buy back in when prices have dropped another 20%

jayoh

Firstly well done on turning your life around so successfully :beer:

My advice would be to sell - if you do make a loss, at least you can concentrate on paying back what you've had to borrow - whereas the prospect of keeping the house and therefore the mortgage would be a long term burden on your finances with little prospect of there being an end to it in sight for many years to come

alien28

are people still buying in this climate though?