Help 90% mortgage needed

LeanneJ77

We are in a bit of a mess with our finances at the minute. We currently have:

Mortgage £223,000 outstanding with £7,000 penalty if paid off early. This is on a fixed rate at 7.49% until Jan 2014, it is a 32 year mortgage with 30 years remaining at end of Jan. Monthly payment = £1545.

Credit cards and overdrafts totalling £40,000. Interest free periods have ended and we have moved around money in the past but coming to an end of what we can do now. Monthly minimum payments = £710.

Our house is now valued at £300,000 (identical property just sold in our street).

Although we are making these payments and paying all bills we are then relying on credit cards for all shopping, petrol etc and getting further into debt each month.

Income £31k x2.

In an ideal world we would pay off the existing mortgage and pay the penalty but would then need to remortgage for £270,000 so would need a 90% mortgage. Is there any way this would be possible or can anyone suggest alternatives eg 80% LTV mortgage but then take out loans to pay off other debts? Not sure if any companies would offer this.

opinions4u

You have a lot going against you.

90% is a high LTV and many lenders won't touch it for a remortgage.

4+ x joint income is a high level of debt to take on with a mortgage and many lenders won't stretch that far.

Loans to take on other lenders' "problems" aren't flavour of the month at present and many lenders will be reluctant.

I'd strongly suggest that you see a good whole of market broker and take it from there. But be prepared for disappointment.

we are then relying on credit cards for all shopping, petrol etc and getting further into debt each month.

This is totally unsustainable.


Personally I think you'd be better of heading over to the Debt-Free Wannabe forum to identify ways to improve your income / outgoings a little.

It may well be that selling up, clearing the debts and buying a much smaller house is a better bet.

Do you have any missed payments or defaults or other nasties on the credit file? Who is your lender at present?

katsu

I agree that if you post a statement of affairs (a full list of incoming and outgoings) on the Debt Free Wannabe board, then people will advise you on how you can reduce your outgoings and balance the books better.

People on DFW are lovely and helpful, and I think it is their advice that will help you work out realistic budgets.

Good luck

LeanneJ77

Halifax is our current lender for the mortgage. We have no missed payments or any nasties etc on file. If we were able to move all our debt to 90% mortgage we could afford the payments or alternatively we could make the payments on 80% LTV and also afford to pay off a loan. Only problem we have with current debts is that the payments and APR's we are paying are far too high. Think we are a lost cause but really don't want to sell up.

opinions4u

really don't want to sell up.

I'm sure you don't.

If you cling on for as long as possible and then get pushed over the edge in 12 months, 24 months or whenever, you'll have thrown a lot more money at the problem than you would do if you sell up now and get debt free.

That doesn't mean you should do, but if you really are a lost cause (and I can't judge that on so little information) acting sooner rather than later would save you thousands.

herbiesjp

You may have a few options available.

But it would need careful analysis of your finances and seeing just how you could best improve your monthly affordability.

You really do need to draw up a SOA pointing all details of the debts, so that yu can then see what you are saving each month (if anything at all).

Thrugelmir

Why struggle on ?

You earn a reasonable combined income. So selling up. Clearing your debts and rebuilding your lives seems the best option.

I estimate that some £2,000 of your monthly take home income is currently paying the interest charges to service your debts. Put another way that's £2800 of gross salary per month or £33,600 per annum. More than one of your salaries.

I would strongly recommend taking postive action before events overtake you both.

getmore4less

Mortgage £223,000 outstanding with £7,000 penalty if paid off early. This is on a fixed rate at 7.49% until Jan 2014, it is a 32 year mortgage with 30 years remaining at end of Jan


Why did you take on this mortgage only 2 years ago?

What was the debt then?

If this was the best you could get then then unless something significant has changed on salary or debt reduction it will be even harder now to make things better.

Although we are making these payments and paying all bills we are then relying on credit cards for all shopping, petrol etc and getting further into debt each month.


You should have close to £4k coming in and you say you have <2300 going out on debt where is the other £1700 going?

You have a serious overspending issue and have had for some time.

Do a SOA
http://www.makesenseofcards.co.uk/soacalc.html

CloudCuckooLand

Put the Uggs and GHDs on ebay...

LilacPixie

Shifting debt around is rarely if ever a good idea, shifting unsecured debt to be secured debt onto your home is an even worse idea and as the mortgage experts have said there may only be a few options availible to you.

Not wanting to move/sell up is fine but you need to have a serious look at your finances and work at clearing your unsecured debt while not adding to it to stand any chance of staying where you are

FCRangers

Sell the house for £300,000 pay off the 40k debt, then buy again with 30k deposit.