Bristol and West refusing to help this situation

sallysqueak

Hi all

I'm after a bit of advice from some of you guys in the know...

Basically, my parents owned 2 properties, the property they live in and a second property which was a rennovation project which took far too long to complete and has caused this problem.

Originally property 1 (where they live) was mortgage free, so they got a mortgage on it to fund property 2 (the project property). Since it took so long to complete, they had to keep re-mortgaging property 1 to keep funding property 2's works, until they ended up in a position where they were mortgaged up to the eyeballs on property 1.

Now they are in a situation where they have somehow by some miracle managed to sell property 2 in this climate and just break even, BUT their mortgage provider, Bristol and West, want £6k to repay the mortgage now, otherwise they have to wait until November to repay the mortgage. If they wait until November, they will have to pay out around £9k in mortgage payments in this time (they have already paid out £3k since the property sold as this has failed to be sorted out, which is why i am chipping in). These payments are coming out of the money sitting in the bank, as they have no other way of paying it (only my mum works) Obviously, if they do not repay the mortgage now, while they have the cash in the bank, they will never be able to repay it as they will have £9k less than they will need by November. They can't repay now as they don't have a spare £6k hanging around.

I have written a letter to Bristol and West for them explaining all this and although the woman on the phone claimed they are getting a lot of people in the same situation asking for help like this and the powers above are having to help out, she got a letter back today basically telling her no way, sod off. So... I am wondering, please can anyone with any experience tell me what are the chances of getting this £6k either waived or reduced? We are in a no win situation at the moment, and any advice would be greatly appreciated with this matter.

Thanks in advance for anyone who is kind enough to suggest what to do!

Sally

silvercar

Sounds like they took a mortgage with redemption penalties when this was not a good idea. Also seems like they extended the mortgage to borrow money to meet the mortgage payments. Are they actually making any profit from this?

If the mortgage is on property 1 and they are selling property 2 then they could stick the proceeds from the sale from property 2 in as high interest account they can find and only pay off the mortgage in November. Or is that what they are doing? Are they getting interest on the money sitting in the bank?

Fliss_M

Is it possible to take out a loan to cover the 6K? Possibly a loan over 1 year, so the mortgage payments become the loan payments? It seems to me its ether a 6k loan now or a 9k mortgage in Nov.

Robert_Sterling_3

The parents went into a business venture. Due to unforseen circumstances the venture has not been profitable. On the contrary, all things considered, they are looking at a loss of maybe £6000 or £9000. This is most unfortunate.

There is a separate issue.
They have signed up for a mortgage.
They agreed the terms.
This is quiet separate from their business affairs.

I am sorry that this is the case.

sallysqueak

Hi,

Thanks for your replies and suggestions

In answer to the question, are they making any money out of this? No they're not, they should have done but it was all a !!!! up basically, and now i'm just trying to find them a way out of it so they can once again own their house outright and at least have that safe.

The mortgage payments are over £900 a month, and they can't earn anything like this amount a month in interest to meet the payments with the way savings are at the moment, even though they have about £196k sitting in the bank, although we had thought of that one.

I'm going to suggest they write back to Bristol and West and ask for a reduction in the fee, and at the same time look for a 0% loan/credit card to pay the mortgage fee off with? (any suggestions which is best/has the longest term?) I think getting a loan to cover this as a last resort has to be a better option than just leaving it as it is.

Maybe the only alternative to this is to give the CCCS a call and see what they suggest? Don't know if it will help or not though as it's not a 'normal' scenerio.

Thanks again

Sally

mrcow

Well hang on. Surely the settlement figure in November will be a lot less than now if they're paying £9000 off in the meantime.

You need to calculate the settlement figures correctly before you start trying to compare options.

beecher

You'll have no chance in getting out of the Early Repayment Charge as your parents agreed to pay it when they took out the loan. I don't see why the lender should give you a reduction simply to allow your parents to be mortgage free - I genuinely don't see how that makes their scenario not 'normal' and why it would allow them to opt out of a contract.

ILW

Funny, I thought property developement was just a licence to print money. The lady on the telly said so.

Conrad

Sally

Was the mortgage arranged on an 'advised' basis by a broker?

In thier situation I would have advised a mortgage without penalties, assuming lowest monthly cost was not the priority.

Can't see Bristol & West backing down. An analology would be you lent me £10,000 to invest and I agreed the minimum interest I would repay would be £20,000, but then my investment plan went wrong and I was merely only able to recoup the £10,000 so I then ask you to foot the bill by waiving say £1000 of the interest. Would not be fair on you.

The cccs will be zero help.

clairehi

OP - is the mortgage interest only? (this would explain why the £9K repayments between now and November will not reduce the balance). If not, have you asked B&W to calculate what the redemption amount would be at the end of the tie in period.

If it is an interest only deal it seems there are 2 options:

1. repay now - lose £6K
2. repay in Nov - lose £9K.

I know which one I would go for.