messy one!

OnTheUp_2-2

Hi All,

I did post quite alot last year but have since forgotten my sign in details incl my user name!! You were all extremely helpful with what was and still is an extremely difficult situation. Recently our circumstances have changed and we once aagin need to re-evaluate our situation...

I would really appreciate people advising with anything but please do not ask personal questions as to the why and where fores.. our situation as is cannot currently be changed but the way we deal with it probably can :T

We have aproperty with 227k mortgage on SVR with NR- property value approx 240k- house is vacant but refurbished but cannot be sold

We are paying the mortgage for the house but nothing else

We live in rented accomodation.. but this is being paid for for us, we are however paying all the utilities. It is not clear how much longer this free accomodation will last

Our debts-

227k mortgage
9k on MBNA 0% deal ending august 2009
7k on Halifax 0% deal just ended
1k over drawn

We have just recieved some money 28k exactly and we do not know what to do with it... I know logic says pay off all your debts BUT we cannot sell our house and we cannot live there and we cannot be guarenteed free acc for much longer and we will never come into a lump sum again and it may be our only hope of buying another property...

Questions-

1. Where should we put the money temporarily while we decide?
2. If we paid for the mortage and the house slips into neg eq. then we have lost that physical money
3. Should we perhaps pay off the 7k card and keep the rest for deposit and carry on paying £250 pm off MBNA



phew! so thats the beginings of it....

iB1

Would it be possible to rent out your vacant house in the short term? That way you can get some cash to help with the mortgage payments?

TotallyBroke

When you say you are paying nothing else for the house does that mean you are not paying council tax. I thought this was mandatory thing for a property.

Would it be possible to rent this property out? Would your mortgage allow this?
You say you cannot sell the house. Is it that for other reasons that you cannot or just that you are worried you may still owe on it after selling. If it is the latter then maybe the money you have come into will cover any shortfall and you can start again somewhere else with a clean break.

I would look into seeing if you can move the Halifax money to another 0% deal for the time being. If not then maybe you should pay it off and have one less debt, until you can find a way out of your situation.

cydney65

Hi :j

I lost my log in details too and my LBM drifted off somewhere...so we should give ourselves a pat on the back for returning to this lovely community.

Tricky isn't it when money comes in and you know you should pay off your debts but you also want to use it for something else; been there bought the t-shirt etc. If you paid off the debts you would still have 11K. Would that be enough to help with a deposit? As to where to put the money temporarily, that may depend on any benefits you have coming in (as some would penalise you for having extra money) or your personal circumstances, which I totally understand you don't want to go into. Sorry I can't be of more help.

Other, more experienced people will be along to help you, but I want to wish you the best of luck.

stapeley

I,m sorry but why would you possibly want to buy again ? Would the same thing not happen again ? I am just a little confused . Why are you not occupying your house ? why are you renting and how / who is paying for it ? If you have some equity in house can you not drop price and pay off loans with the money ? Then money spent on mortgage would pay rent .

Snaggles

Hey there - welcome.

I appreciate there's certain things you can't/wont talk about so feel free to ignore my questions if they stray into that territory - just want to get a slightly clearer picture to see if I can make any suggestions.

You said you can't sell your house and can't live there - is that a permanent situation? How long do you expect that to be the case? Are you able to rent it out in the meantime, or does the property have to be empty for some reason?

Is it likely you would get a second mortgage? Would your incomes be enough for lenders to consider it, even with your existing mortgage in the background? Would you be able to afford to pay 2 mortgages (plus insurances and other bills for 2 properties)?

If you have to leave your current accomodation, will you be able to rent something else for a while until you have saved up a deposit to buy something else?

What are your credit ratings like - is it likely you will be able to get low or 0% cards to transfer the balances of your existing cards onto?

My gut reaction is to say clear the debts - partly because if you apply for another mortgage, lenders will take these into account when calculating affordability, and partly because 0% cards are thin on the ground at the moment, and the limits being agreed aren't as high any more, so you may struggle to transfer the balances and end up paying silly APRs. As someone has mentioned, it would still leave you enough to have a good head start on saving for a deposit. But it does sound like a complicated situation, so I would be tempted to get lots of advice before you make any decisions.

lxpeanut

From what you've said I'd pay all the debts off except the mortgage. Then put the rest of the money aside. I'd only start using it to pay the mortgage if you can not afford to carry on paying it. I would also consider renting the house if you can't ocupy it.

OnTheUp_2-2

stapeley wrote: »

I,m sorry but why would you possibly want to buy again ? Would the same thing not happen again ? I am just a little confused . Why are you not occupying your house ? why are you renting and how / who is paying for it ? If you have some equity in house can you not drop price and pay off loans with the money ? Then money spent on mortgage would pay rent .

I really appreciate all your comments... Ideally obviously like to explain the situation fully so I can best be helped, but I simply cant for legal reasons. I cant/wont answer those questions above.. but will cover them loosely :-)

1. Why would I want to buy? because the market is nearing its lowest point making it affordable for us to get back on the ladder and because for where we live mortgage would be cheaper than rent
2. No the same will not happen again.. not sure what yr refering to
3. I am renting because we cant reside in our property
4.We cannot sell our house full stop.

Hi Cyndey we should celebrate, welcome back x x

On the other points.. yes now we have received some money we will be able to rent out the house but NR will only allow us to do this for 12 months, we would get roughly £900-£950 pcm and then have 10% comm to LA and house insurance

That is correct I am not paying council tax and wont have to unless obviously if someone is renting..ps also to let you know you can get 6 months relief on vacant homes

Credit rating is excellent

We expect our situation to be long term and do not forsee us selling for 5-7 years unless a miracle happens, which must explain is possible, lets just say were working on that one!

We were hoping that if we got the house rented out and under control we could get a small second mortgage but we are not sure, it would be okay to carry on renting but would prefer to buy

I really am sorry if it appears i am being awkward, it just really is a situation I cannot go into to much for vaious reasons.. but I really do want advice


Cheers

OnTheUp_2-2

My head is telling me to clear the debts completelry and then go from there but then I think oh my god I will never get that size lump sum again and it may be our only chance of getting another deposit together..

I was thinking perhaps pay off Halifax.. 1k has just paid for a holiday that we def deserved that would leave 20k put that into an accessible account and then work hard at paying off the MBNA.. but where to put the 20k?

barrys-lass

In the meantime until you decided what to do witih your money you could try a high interest savings account that allows you easy access to your money. (sometimes there a penalties for withdrawing money) There will be advice on here about this.

OnTheUp_2-2

but i will be taxed on the interest wont i?