I'm going to have to sell and rent...help pls!

MRBEN_3

Hi, I'm new to the forum - so as not to waste anyones time I've put my main issue to the top, then elaborated on my situation further down.

My question is:

I wanted Nationwide to allow us to pay a 5k fee to leave our current mortgage product and go on to another mortgage product, still with Nationwide. The product I had in mind was a 3year deal at 4.49% (this would have saved us over £300 per month and would have been worth taking the 5k hit).
- however I was advised that Nationwide have withdrawn there customers right to buy themselves out of mortgage products......
CAN THEY DO THIS?, IS THIS TRUE?



The background:

My wife and I own a two bedroom mid terrace house which we purchased three years ago and is worth in the region of £155,000-160,000.
We owe £145,922 and are paying interest only.
For the first two years were on 4.78% giving a monthly payment of £581.36.
In July 2008 we went on to a new product at 6.75% for 5years giving a new monthly payment of £818.42 (4years remain).
The new product seemed a good idea at the time, as interest rates seemed to be climbing..... hmm....
Nationwide estimate that we own 9% of our house.

Nationwide came up with three options:
1) A payment holiday (which we are not entitled to as we don't own enough of the house....).
2) Go on to interest only (which we already are).
3) As a 'short term fix' agree to pay an amount of the monthly payment and have the rest added to our mortgage balance (which would mean us going in to arrears, and cause issues for our credit reference file).

I asked them to swap our product and they refused....

Obviously option 3 remains a possibility, but would only be a short term thing and may cause us more problems that its worth.... We are probably going to have to sell up and rent.

Any advice would be appreciated.

Perhaps I should blow next months wages on lottery tickets!
(joke).

Thanks.

Ben

beecher

Nationwide have withdrawn the ability to swap products - you can still pay the ERC and go elsewhere. However, if the 91% LTV is accurate you won't be able to go anywhere else.

I take it there are issues with finding the money for the mortgage? You could post a Statement of Affairs either here, or on the Debt Free Wannabee forum for lots of advice, ie get rid of Sky/car/gym membership, and other forums will help to cut back on food/power bills etc.

Keep in mind that if you sell and rent, you'll still have to find the 5k to pay the ERC

benjo

while this suggestion wont solve your problem immediately as a general rule of thumb, the more of your property you own the more choice you have for borrowing, I know you were joking about lottery tickets, but even small regular overpayments to your mortgage can make much more of a difference than you might think.

Beechers suggestion Re debt free wanna be board is good, also take a look at the mortgage free board, there are some great ideas there.