Mortgage arrears and resolution

JonnyBoy35_2

I hope someone or more than one can help me with this idea I have to get me out of my current situation

we have a very large mortgage and are paying £2k pm int-only on a fixed rate which was set 12m ago so is of course very high compared with the rates now

we are just under 3m in arrears but cant seem to clear arrears and are struggling to pay monthly pymt ( we have done though for last 3m)

income has greatly reduced and everything else not being paid at present

if my mortgage goes to svr this would reduce pm payment by £350 which would mean we could start to clear arrears and pay other pm bills

but there is of course a 20k penalty to pay if we did this

HOWEVER the vaklue of our ppty now means we are in negative equity so the lender would lose if they repossessed and forced sale as we couldnt pay back the shortfall and we would prob bankrupt ourselves to prevent this and wouldnt need to pay others back-dont want to do this but in this event little option?

so surely it is lenders interest to forgo the eric and allow us to move to svr and pay reduced min payment , allowing us to slowly clear arrears and pay other creditors

if they added eric if they did this payments would not change and negative equity would increase

we genuinely want to pay all back but without the lender(capital home loans) doing this we do not know what we can do

do you think if I approach the lender they will agree?

silvercar

You could benefit fromt he government's new scheme that allows arrears to build up and then be capitalised onto the mortgage.

Check you are obtaining any benefits you are entitled to.

I can't see a lender agreeing to forego ERCs. See what your lenders attitude would be to payment holidays.

Squish_21

I'd suggest discussin with your lender. May be easier face-to-face to go through all the options.