mortgage company gone bust - advice or suggestions please

Bairn_2

Hi, I took out a 100% mortgage almost 2 years ago with Future mortgages (I think they lend to people with less than great credit). Anyway, they have now gone bust and are no longer doing anything with any mortgages. They are now part of Citi. My problem is that in June my 2 years fixed term is up and I will then go to 2.49% above the Libor rate which then was 3.93. That will make no difference at all to my current rate of 6.95%. They change their rate every 3 months and obviously at the moment I would benefit slighly from it.

I called them today to see if in June when I come off fixed I could get fixed again and they said that they are not offfering any further mortgages and it will just switch to the variable or totally change lenders.

There is no way in the current market I could change, therefore I am stuck with the current lender but at a risk of the libor rate going up at any time and my mortgage payment changing every 3 months!

I am on an interest only and currently pay £1500 per month! I was made redundant in October last year, luckily found another job within 2 weeks but earn less than I did previosuly as I was in a sales role and earned good bonus at the time of taking out my mortgage.

Does anyone have any advice on how I can get fixed in?

Thanks

Tracie

Ian_Griffiths_Halifax

What adverse credit did you have at the time you applied for your mortgage? When did you get the adverse credit? What is your house worth currently and what do you owe on your mortgage. What do you earn now? Have you incurred any more adverse credit since you got the mortgage?

We'll need all this info to be able to tell you if you've any chance at all of doing anything.

Bairn_2

Hi, i think I had an old ccj and then I was overdrawn with the back on occassions. It must be a while ago as I got the mortgage almost 2 years ago. I bought the house for 245000 on 100% mortgage and with the current climate I would assume a drop in the house price but to be fair, the property in the local paper this week seemed quite stable. I think I owe 252 as I had some of the fees etc added to the mortgage. I have only been on interest only therefore not reduced the mortgage. I don't think I have any adverse credit now but not sure what is on there from previous. I earn 28000. My fiance earns around 30/32k but the reason the mortgage is in my name as he has some adverse credit still.

Hope this helps

Thanks

HappyMJ

My advice is terrible but I'd say walk away from it. It's beyond your reach. If you sell now you will be at least £50k in debt so declare bankruptcy and start again. It's not that bad. Just remember it was the banks mistake of lending without a deposit and relying on the house price to increase (it's probably why they went bust) so the judge will grant it without question. Your combined income just cannot support a mortgage of this size and give you any form of a lifestyle and you have a large negative equity.

Yes I've added the maths up and your "interest only" payment is £1,500 per month as you say. So I'd recommend renting somewhere nice for the next 7 years while you re-establish yourself.

Good luck. In answer to you original question no lender will re-mortgage to you with negative equity. Unless you can find a spare £90k lying around somewhere to reduce your Loan-to-Value ratio to at least 75%

payless

A lot of people are going to be in the same boat - even some that had 80% prime mortgages 2 yrs ago, ( ie good depsoit and no bad credit history) .. some of these prime lenders ( woolwich, York, A&L , NR , chelesa..) , have higher SVR than your 4.6% ( 3m libor is currently 2.1%)

DON79

Hi, we will be in a similar position to Bairn in September this year when our fixed rate with Future Mortgages ends.

Affordability won't be a problem as both myself and my husband work, our mortgage was 100% but only for £102,000 in 2005 which at the time was approximately 4x my husbands income not taking into account my own.

But we would like to fix again. We won't be able to move lender because we are now in negative equity and cannot raise enough of deposit to improve on our ltv.

Does anyone know whether we could fix our rate again or have any suggestions? Don't really want to be stuck on a variable for the remaining 20+ years. It is not interest only, it is capital and repayment.

Would appreciate any helpful advice.

Donna

Conrad

Complain to the senior mortgage compliance officer and MD at your lender that the lender is not abiding by thier commitment to the FSA's 'Treating customers failry' rules. You went to these lender on the tacit understanding you would be able to select from other 'suitable' product options in the future.

payless

Conrad - If i was am lender I would say that whilst we don't have an obligation to provide a follow on fixed.. here's one for you, of course it will be priced to reflect the original client status ( ie sub prime ? ) and the current LTV