Struggling with mortgage,Lender wont help. Whats my options?

dickdasterdly_2

Hi.

I was managing financially up till about 4 months ago when my hours were cut back at work. I looked for a new job and found one paying more per week. This lasted about two months till I was let go due to the buisness not needing as much staff- First in last out unfortunatly! I got a job with an agency but they are not giving me as good an hourly rate or anywhere near enough hours. I only just managed to afford my mortgage last month but I am not going to be able to pay next months(Due 10th). I am now living with my gf(but not paying rent) and am trying to rent my own flat out but it will cost approx £150 to become registered etc. I dont have this money at the moment so I called my lender to request a payment holiday. They flatly and bluntly said "no" due to me owing more than 75%ltv and because the payments woud increase after the holiday it was considered too much of a risk for the lender. As opposed to the much more secure person who just told them he couldnt afford the repayment! I am considering selling (I thought of this when the second job went down the pan) but two in my block have been up for sale for almost a year already. I have checked the prices of these as they are similar to mine (2 bed maisonettes) and it looks like i will be left with negative equity even if it does sell. So now I am wondering what my best option is. Borrow the money needed to become registered as a landlord and hope it rents out quick(its not in the best of areas)? Put it up for sale and hope it sells quickly? Or go down the IVA route? If I take an IVA will it take my mortgage into it as well? Any advice would be appreciated
Thankx

Senior_Paper_Monitor

IVA should not be considered unless there are other debts involved (you don't mention any) - and in fact the mortage isn't in arrears so far, so it isn't a debt at this stage!

This means an IVA is not possible - requirement is minimum £15K of debt spread over three accounts.

I would suggest a quick visit (or as quick as they can manage) to CAB or a debt counsellor (the second should be free and uncontracted at this stage) - at which I suspect they will help you make a budget, calculate what you can afford to teh mortage and prepare a written proosal to the lender on this basis.

Be aware that renting the property requires permission of the lender (and probably additional expense) - and as you have alreedy been in touch about the problems it would be very unwise not to tell them! I am not sure what the cost is for 'registering as a landlord', but there are costs incolved if you put the property through an agent, for obtaining appropriate certifciates and the changed insurance requirements etc.

Even if successful in renting, it sounds like you may have to subsidise the cost anyway.

Does your girlfriend rent or own a property? Either way consider her moving in with you, releasing [rented] or letting [owned] hers, and contributing to your costs.

Evilm

Have you tried asking to go on interest only for a short while? (If your normal mortgage is repayment).

I would seek assistance from the CAB. As SPM said above an IVA really is the last resort.

themull1

if your girlfriend rents, could she not move into your house and help pay the mortgage?

UnderPressure

What about a lodger? If you have a spare room this could be the answer your looking for not only a bit of help with the mortgage but also utilities as well, you could screen them if yourself to ensure you get someone sensible, but as long as they are working and can maybe give you some sort of reference you should be OK.

I am not sure about the legalities of this so you would have to do a bit of research beforehand but it could well be the answer.

If it is only a 1 bedroom flat then a full blow let may be a better idea but as you have said there are things to pay for before this could happen still worth looking into though as in essence you would have a tenant paying your mortgage for you, as and when the market picks up you should be then anle to sell with no issues.

Best of luck