Help 90% mortgage needed

getmore4less

RenovationMan wrote: »

Can I make a guess and suggest that throughout your financial lifetime, you have been taking the 'easy route', by making mortgage equity withdrawls and using zero percent credit cards to fund a lifestyle that was beyond your means?

Well, just as the GB Government has found that this cant go on forever, so are you. Just like the government, your going to have to take this on the chin and start taking control of your finances.

You have a decent income, especially given that you are using both tax free allowances and both pay 20% tax. You need to take a long, hard look at your lifestyle and cut out everything you can. I would also assume that you have SKY TV packages, mobile phone contracts, fancy cars and all the trappings?

Time to decide what you want out of life, the illusion of wealth or actual wealth.

Pure speculation.

Lets see what the OP comes back with, could just be waisting effort without all the facts.

Pete111

LeanneJ77 wrote: »

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.

I'm very surprised that the OP got hold of such a large LTV mortgage of that size in early 2009 when House prices were lower and surveyors marking down values significantly - especially when their finances were so 'challenging' compared to income...

This situation doesn't smell right but if true then it's a great example of people trying (and failing)to live a champagne lifestyle on beer money and a warning to us all!

LeanneJ77

Thanks to those who have replied with useful, inluding information about possible lenders. I will also take a look at the other board.

I'll not go into the in's and out's of how we are in so much debt but the house we are in now is a new build (was going to auction) hence we were advised at the time this was the only mortgage available to us, our only requirement to the broker was to find a mortage that would enable us to buy this house we only had a 10% deposit. We didn't ask for a fixed rate but this was the only mortgage available. The broker did advise us at the time to pay the penaly after 2 years, that the value would hopefully go up to enable us to do so and that as it would no longer be classed as a new build we would have more choice mortgage wise.

Yes we sold a much cheaper house before we bought this one, that was our first home and it was time to move on. I am still happy with the price we paid for this (identical houses in street all sold for £450+ before the crash), one has now sold for £300 so value has increased again from what we paid. We love this house and will probably stay here forever.

Yes we both have a mobile phone £15 a month, but no we don't have Sky - would love it but know we can't afford it. We both have a car due to living in the middle of nowhere and working in completely different directions. Each of these cars are worth about £2,000 (guess - probably less!) so not the value some of you may think.

I've been right through our income /expenditure today and we can manage (just) but will need to make some changes. After all our household bills we have £600 left a month but £400 goes on petrol. That leaves £200 for food, oil heating, car tax/mot and emergencies.

We are not far off, which I knew. Hence I'm not willing to throw the towel in. It would just be so much easier if we could do something with the £40k on cards / overdrafts as as the end of the day we are paying £700 per month on minimum payments so these are not going down.

Pete111

LeanneJ77 wrote: »

Thanks to those who have replied with useful, inluding information about possible lenders. I will also take a look at the other board.

I'll not go into the in's and out's of how we are in so much debt but the house we are in now is a new build (was going to auction) hence we were advised at the time this was the only mortgage available to us, our only requirement to the broker was to find a mortage that would enable us to buy this house we only had a 10% deposit. We didn't ask for a fixed rate but this was the only mortgage available. The broker did advise us at the time to pay the penaly after 2 years, that the value would hopefully go up to enable us to do so and that as it would no longer be classed as a new build we would have more choice mortgage wise.


Yes we sold a much cheaper house before we bought this one, that was our first home and it was time to move on. I am still happy with the price we paid for this (identical houses in street all sold for £450+ before the crash), one has now sold for £300 so value has increased again from what we paid. We love this house and will probably stay here forever.

Yes we both have a mobile phone £15 a month, but no we don't have Sky - would love it but know we can't afford it. We both have a car due to living in the middle of nowhere and working in completely different directions. Each of these cars are worth about £2,000 (guess - probably less!) so not the value some of you may think.

I've been right through our income /expenditure today and we can manage (just) but will need to make some changes. After all our household bills we have £600 left a month but £400 goes on petrol. That leaves £200 for food, oil heating, car tax/mot and emergencies.

We are not far off, which I knew. Hence I'm not willing to throw the towel in. It would just be so much easier if we could do something with the £40k on cards / overdrafts as as the end of the day we are paying £700 per month on minimum payments so these are not going down.

Ok so perhaps not a champagne lifestyle...but why on earth did you burden yourself so massively? It seems a bit crazy in the midst of a severe recession!

RenovationMan

getmore4less wrote: »

Pure speculation.

Lets see what the OP comes back with, could just be waiting effort without all the facts.

This whole site is pure speculation, no one is ever going to provide all of their financial and personal information, so any advice is going to be based on a lot of speculation and guess work and 'reading between the lines'.

The OP sold their last house in 2008 via AUCTION, yes its speculation to assume that they were up against it financially to have to go down the auction path, but its hardly a complete stab in the dark either.

They also have £40k of debt on credit cards and overdrafts, yet earn over £60k. Again, its an educated guess when you see these sorts of figures to assume that with that level of income and what amounts to a pretty modest house, they must be living well beyond their means.

I wont apologise for the 'tough love' of my post, I dont do *hugs*, but I do think my advice is right. Its fine to have high aims, but unless you have a huge income you cant have high aims in every aspect of your life. We always wanted a large character family home and have been working for years towards achieving this aim. In May this year, we got there. However, to achieve this goal, sacrifices were and are being made. cheap holidays, crap cars, batch cooking, non-branded clothes, freesat, PAYG phone contracts, etc. etc.

Thrugelmir

LeanneJ77 wrote: »

We are not far off, which I knew. Hence I'm not willing to throw the towel in. It would just be so much easier if we could do something with the £40k on cards / overdrafts as as the end of the day we are paying £700 per month on minimum payments so these are not going down.

Therein lies your problem. No lender will interested in refinancing / consolidating your debt (at least at a competitive interest rate).

Unless your incomes increase significantly or you receive a lump sum in order to make inroads in to the unsecured debt. You are saddled with them for a very very long time.

herbiesjp

You might not get to 90% but you could look at other options for the debts, to try and bring the repayments down to a more affordable level, and one that would mean reducing the debt rather than just paying the interest/minimum balance.

Have you got an up to date copy of your credit files?
Have you spoken to a good broker?

LeanneJ77

Just as a final point, I wanted to add that when we sold our house by auction we had no debt at all. Yes we did have a low amount on a credit card but everything was paid off with the profit. The reason we sold via auction was because I was impatient. I wanted the house sold 'now' and with the market how it was I knew this was my best shot to get a decent ish price and to be living with family so that as soon as a property came up to buy we were in a good position to proceed. Which is what happened, got a great deal on this house and bought before it went to auction. Yes we are in trouble now but I also know that we will be able to sort something. Thanks to people who have gave useful replies but I think it best if people just leave this now - I can't change the debt we are in, I just need to find a solution but will look elsewhere for some advice.

getmore4less

LeanneJ77 wrote: »

I've been right through our income /expenditure today and we can manage (just) but will need to make some changes. After all our household bills we have £600 left a month but £400 goes on petrol. That leaves £200 for food, oil heating, car tax/mot and emergencies.
.

You should have £1700 spare after debt repayments.

£1100 for household bills seems a lot where is it all going?


I wanted to add that when we sold our house by auction we had no debt at all.

£40k in 2 years is a masive overspend per month have you resolved the reasons for this? (bon't need to know why)

RenovationMan

LeanneJ77 wrote: »

I was impatient. I wanted the house sold 'now'

Takes me back to my earlier point about taking the quick and easy route. As the previous poster has said, to rack up £40k of debt in just two years is staggering.

I know that your a bit put out by some of the comments, especially mine, and perhaps feel that you asked a simple question and just wanted a simple answer but I doubt that too many people would be comfortable giving the sort of advice that would lead someone deeper and deeper into debt and financial ruin.

My advice, for what its worth, is to forget trying to consolidate debt and sort out the root problem. Trust me, once youve really worked hard to get rid of a debt you think twice (or three times) before you go down that route again.

Good luck.