Urgent Mortgage Advice Needed Please

irishkeet

Hi all

I hope you can help me with some mortgage advice.

My friend separated from her husband and has fallen behind with her mortgage.

Her house is worth about £250K, mortgage owed is £118K with 14 years left on current mortgage, the current rate with Mortgage Express is 6.83%!! (rip off), she is not tied in as the fixed rate ran out a while ago.

She was taken to court this week for repossession because she is two months behind, judge said she has to pay £50 on top of the mortgage to clear this. Mortgage Express charged her (& ex) £350 each for going to court which has been added to the mortgage.

Now I know she is been ripped off big time and could do much better on a new rate but the problem is can she move while owing Mortgage Express? would a new mortgage provider look at the fact that there is lots of equity in the property and offer a mortgage to clear all she owes on the current mortgage? If she could increase the term and get a better rate she could really start getting organised. I hate the fact the M Express are really screwing her.

She works full time (and looks after 3 kids!), got her degree last year so as its a first job out of college the pay is about £18,500, age is 39 (may be relevant for mortgage advice & term)

Anyone out there that can provide advice it would be greatly appreciated.

Thanks
irishkeet

AndrewSmith

Hi and thanks for the post.

The main problem your friend will face is that she is unlikely to be accepted by a lender at high street rates due to that fact that she now has a 'suspended reposession' lodged against her.

However that said, yes the fact that their is plenty of equity in the property will help. It already is as the court's are unlikely to grant a posession order unless she refuses to pay at all.

The whole case will revolve around her credit history and what has happened financially to lead up to the lender taking her to court for posession.

Extending the term is one option with a new lender to get the costs down. Also she may want to consider taking an interest only mortgage for the first couple of years whilst she is paying a higher rate to give herself a couple of years unblemished mortgage payment history. After this she will be more likely to obtain a mortgage at high street rates.

It must be noted however that there are the usual risks associated with an interest only mortgage and that I am not advising she go down this route. It would be foolhardy to do so without being privvy to all the details involved. I am merely offering a couple of suggestions.

Beware of so-called 'adverse credit specialists' who will invariable look to charge a broker fee in excess of 1% in addition to the lender commission. After all they hve no greater access to products than any other broker and are, in some cases, restricted to a very limited number of centralised lending houses such as iGroup, GEMAC, Kensington etc.

Take proper advice from a professional mortgage broker. His experience and knowledge of the market as a whole will be able to point you in the right direction.

Hope this helps

Andy

stanmoresaver

irishkeet wrote:

Now I know she is been ripped off big time

I hate the fact the M Express are really screwing her.

Hi,

I feel sorry for your friend, and I endorse the comments made by my learned "ever so regular" friend Andy above.

However, I would ask one question, at what stage did she actually notify MX, because this should be a lesson to everyone.

I cannot comment specifically on MX, but most lenders are relatively sypathetic when told about situations of difficulty. So if anyone else is in a similar sitation to your friend, get in touch with the lender, don't bury your head in the sand, because they can't guess what is going on.

I wish her well in her situation though!

SS

irishkeet

Hi
Forgot to mention that she is currently on interest only

Any other advice would be great too
thanks

HelpWhereIcan

I would agree with all that has been said by Andrew and Stanmore.

I was actually astounded :eek: to read that proceedings have started over 2 months' arrears as this is extremely harsh!! Or has she missed a lot more than this but repaid most of them leaving 2 months outstanding? Most lenders look at the number of payments that were missed as well as the arrears balance (this applies to both repossession decisions and remortgage underwriting).

I may be cynical and sound harsh, but it is possible that you are unaware of the true extent of your friend's difficulties as people can often be embarrased about talking about these things. No matter how many times I tell people I see their 'situation' all the time, it is never easy for them and it always feels worse when you are actually going through it.

In my opinion, the best thing you can do as a friend is to encourage her to talk to a whole of market broker (taking into account Andrew's warnings) as soon as possible.

As Stanmoresaver said, the earlier things are addressed, the easier they are to resolve and the sooner your friend will get a full night's sleep.

A rate that is 1% lower will save her approx £98 pm. If she is already on interest only, then extending the term will not affect the payment and she will be relying on a lower rate to improve things (unless she has other debts that she could add to the mortgage to reduce her total expenditure- be careful of adding unsecured debts to a mortgage though).

As Andrew says, the rate she will be paying will not be 'high street' and may not be too different to what she is paying now. This means that it is vital that she keeps up her payments to Mortgage Express from now on and gives herself options to remortgage in the next year or two.

She should also ensure that she has claimed all the support she is entitled to, working tax credits etc and possibly even visit this site to see where else she could save money on a day to day basis.

I hope all goes well with your friend and that you can encourage her to seek help as soon as possible to at least get a plan for the mortgage for the future.

Hope this helps