Mortgage Payments.... what can I do??

M1977

Evening,

I have a question that I was hoping for some advice with....

My wife and I currently “own” two houses (mortgaged). Due to a change in personal circumstances we found that we had to move away from the Midlands (Career and Family reasons). To this end our house “up north” is currently sitting empty and we are trying hard to either rent or sell albeit selling it is the preferred option.

We have another mortgage on the place we are living in now “down south” and this is great.... The problem is that the mortgage payments on the house up north are £1000 a month and this is interest only. Things are getting tight and we have been wondering what we can do to alleviate this “problem”. The “old” mortgage is with GE Money and the balance is around the £180k mark but a redemption penalty of around 6k applies until 2010. We had to go with GE Money as when we got the mortgage we had fallen out with The Woolwich but this is now sorted out and as such the new mortgage is with RBS.

Some of you here may say that we were silly to get a second mortgage in this current climate but needs must and we had to do what we did for the sake of our families, nothing sinister though!!

Is there any way that we can reduce our payments in the short term so it would give us room to breathe. The stress is not helping and we have thought about letting the house go into the field of repossession but I accept this was silly thinking but the thought crossed our minds nevertheless....

We both have good jobs and earn a respectable salary between us (80k p.a)

I have no doubt that when this “slump” passes the house will sell like a hot cake as the place where it is was highly sought after about a year or so ago but like most places the market has died....

Any advice is greatly received....

marmitedog

I'd let the northern house out. If its not letting at the moment, your asking rent must be too high.
I was in a similar position and the rent just about covers the mortgage interest. Leaves me with a £200 pcm shortfall to cover the capital payment.
I'm being realistic with mine, its not going to sell for anything like I paid for it for 3 or 4 years so I'm in it as a landlord for the medium term.

Why did you go with GE if your income is OK? They normally target sub prime with corespondingly high risk based pricng.

See a local letting agent to get a realistic view. All the best.

M1977

marmitedog wrote: »

I'd let the northern house out. If its not letting at the moment, your asking rent must be too high.
I was in a similar position and the rent just about covers the mortgage interest. Leaves me with a £200 pcm shortfall to cover the capital payment.
I'm being realistic with mine, its not going to sell for anything like I paid for it for 3 or 4 years so I'm in it as a landlord for the medium term.

Why did you go with GE if your income is OK? They normally target sub prime with corespondingly high risk based pricng.

See a local letting agent to get a realistic view. All the best.

Hi it is on the market to rent and it is on for a very reasonable price.... 1k pcm mortgage and 575pcm rental price....

Someone is going round to the house on Monday to view it so fingers crossed.

We went with GE as when we took the mortgage out both my wife and I had defaults registered against us thanks to a !!!! up by the Woolwich but this has now been sorted and they have retracted them....

bigstevex

seems silly that you got the GE mortgage before the woolwich sorted the issue, you effectively cost your self lots of money i'm guessing in interest! I threatened carphone warehouse with court when they put 3 defaults on me and it took a week to get them off my history then.

unfortunately your already on interest only so there's no options there, your only option really is as you say to rent it out and just get what you can for it each month to help with the payments.

Gorgeous_George

Ouch! That's a huge mortgage for the house in the Midlands (not really up t'North is it?).

With such a poor yield you need to sell (even if this leads to a loss) or, at the very least, remortgage onto a more favourable rate. With such a large mortgage it may be worth paying the penalty.

I'd sell it and take the loss on the chin.

GG

bfgun

Gorgeous_George wrote: »

(not really up t'North is it?).

Anyone living South of Watford would think so

olly300

bfgun wrote: »

Anyone living South of Watford would think so

Strangely we are not all ignorant southerners.

Some of us have lived up North you know.

(Then moved back down south cos of the rain.)

wymondham

With £80k coming in, should'nt this be 'do-able' ? Could you cut back on other outgoings as these must be very high - ignoring the mortgages??