Please help? Need debt/mortgage advice...

Meow

I know this was probably possible back in the days before the credit crunch but I was wondering if anyone knew of any companies which offer mortgages to people with bad debts and defaults? Or advisors who will be able to tell me how to repair my credit?

I have 12 months to fix my situation and I would really appreciate any advice anyone can offer.

I already own a house and have a hefty Halifax mortgage, when the interest rate went up we really started to struggle, I have 23k of debt which was manageable but when my mortgage doubled I had no choice but to default on the debts, most of which are now with debt collection agencies.

I have agreed repayment plans with all of them but my credit history is a mess and I am considering an IVA.

We have never missed a payment on our mortgage and I don't have any CCJs.

Ideally, I would like to sell the house and move to a smaller property with a smaller mortage, however, whilst the Halifax agree it would make sense to port the mortgage and reduce it, they would treat it as a new mortgage application and I would not be successful.

We couldn't afford to live in the house so we rented it out and live in rented accomodation ourselves, since moving out in Dec 2008 we have lived in two different houses and have just found out that our landlord wants to sell this one. For the sake of the children and our own sanity we don't want to risk moving to another temporary home, but at the same time moving back to our house would probably mean the end of our relationship.

I've made a real mess of everything and other than jumping off a bridge I don't know what to do, but I am not prepared to give up yet, I have a year to sort it out...

LDJ2009

Hi, just a few questions if that's ok

What is the value of the house you own and what mortgage is outstanding ?

Is the mortgage interest free or repayment ?

Is the current rental income on the house you own covering the mortgage ?

PM if that's easier

Thanks

Meow

What is the value of the house you own and what mortgage is outstanding ?
Halifax estimate value at £237500, our neighbours just sold for £250k. Oor mortgage is £255k. We bought the house for £275 in 2007 just before the crash.

Is the mortgage interest free or repayment ?
Interest only. I have two parts of the mortgage, £165 on a really good lifetime tracker deal plus the additional on standard variable rate.

Is the current rental income on the house you own covering the mortgage ?
Yes, just.

Thanks.

LDJ2009

Meow wrote: »

What is the value of the house you own and what mortgage is outstanding ?
Halifax estimate value at £237500, our neighbours just sold for £250k. Oor mortgage is £255k. We bought the house for £275 in 2007 just before the crash.

Is the mortgage interest free or repayment ?
Interest only. I have two parts of the mortgage, £165 on a really good lifetime tracker deal plus the additional on standard variable rate.

Is the current rental income on the house you own covering the mortgage ?
Yes, just.


Thanks.

I think as the mortgage is being covered albeit just, by the rental income, taking that out of the equation, you're left with the issue of the unsecured debt and the housing situation

As much as it's an inconvienience moving again, especially with kids, this seems like the easier option to resolve but could you possibly look for a smaller property or a different area to reduce the rent you're paying each month on a temporary basis until you're in a better financial position ?

A friend of mine was in a very similar situation and sold their 4 bed house walking away with hardly anything after 8 years of mortgage repayments and moved into a rented 2 bed house with their 2 kids for 18 months using the difference saved between the rent on the house and what they were paying for the mortgage to clear their debts.

Through a broker after the 18 months, as their debt defaults were satisfied and the other accounts cleared, they were able to get a mortgage and get back onto the property ladder although they have gone for a 2 bed house to start with.

Regarding the debt, is there any way either of you could get another part time job to bring in more income. Posting a statement of affairs on this board will get you some fantastic advice from others that have been in a similar situation.

I really wish you lots of luck and you've definately made a step in right direction by posting on here

Meow

Hi, thank you for your advice.

We are renting a smaller, cheaper property and I am now working on a self employed basis for three companies, I am on my way to earning a lot more money and may even be able to pay off a good proportion if not all of the 23k debt in the next year or two or get together a deposit on a house. But, equally, I might not.

That's why I want to work out what the mortgage companies need now - if all debts are "satisfied" and I'll need a 20% deposit then I know what to work towards.

There is more to moving to the old house than the financial aspect, otherwise I would just go back there, and finding a suitable rental is not easy (I look all the time). I know either moving to rented or back to the old house will be the end of our relationship. If I can fight my way out of this and work 23 hours a day to do it I will, but if I'll never be able to get a mortgage anyway....

LDJ2009

You'll do it

Keep positive x

Meow

Thank you x