Mortgage help needed, desperately

getmore4less

Get those rooms rented ASAP.

Whats the follow on rate in Feb?

maninthestreet

narnia2000 wrote: »

They didn't ask how much I earned, the property was £162,500 almost 5 years ago, I put down approx £45,000 as a deposit, I, at the time had £40,000 in savings. During the first year my then partner was out of work, therefore my saving reduced to £20,000, half way through the second year he left......the mortgage is in my name only. I have reduced the mortgage to approx. £98,000 over the last 5 years. I didn't rent rooms sooner as there were various jobs which needed to be completed, a catch 22 situation, however I bit the bullet and the jobs were finished in July.
I have not received or been entitled to any benefits, apart from single person council tax reduction.
Currently the market is dead, I feel that it would be a good idea to contact my lenders to ask for interest only for a couple of years, then go hell for leather to bring more money in and overpay.......thank-you for that one.
The house is currently worth around £200,000

Thank-you for all the advice

So you took out a mortgage of £117,500, with an income of only £8500?? That's almost 14 times your gross income!
You say the market is dead, but in 5 years, the house has increased in value from £162.500 to £200,00 pounds. so you have over £100,000 equity. How can the property be worth that much if the market is dead? You can afford to put the property on the market for a price significantly less than what you say it's currently worth to attract buyers, and still walk away with more than the deposit you put down.

Engeroosi

sell for 200,000 and buy a smaller place for 100,000, no rent, no mortgage and you can afford to live a good life on your small income, plus if your lucky you could continue to rent out any spare rooms and ive like a queen!!

lindsaygalaxy

With the figures given, if you work 16hrs you should get help with your CT around £13 a week (plus poss help with the interest part of your mortgage) or if working 30hrs working tax credit of around £37 a week. Not much I know but every little helps. You can however only backdate for 3 months and if you have lodgers will come into income.

Personally, if you have that may spare rooms, I would have thought a 2 bed would be plenty big enough, a room for you and one for guests, and not all this money worries. House prices will rise in years to come and you will make money on the house, and no living with strangers.

opinions4u

House prices will rise in years to come and you will make money on the house

Why?

The banks are all trying to reduce the sizes of their mortgage books.

No bank wants to rely on wholesale funding because they've seen what can happen to their business when that disappears.

There's not going to be any significant increase in bank deposits. So there's no money to drive an increase in mortgage lending. Without that, house prices have got very little to drive their values upwards.

Sitting tight and waiting for prices to increase is not likely to be a wise approach.

narnia2000

I have just had confirmation from my lender that they are putting me on a variable rate of 2.99% which makes my repayments £718.25 per month. I have also rented out my last room, so for the next 3 months I will be receiving £1560 per month, which gives me breathing time to find an extra job.
Thank you for all of your advice everyone, at least the property market should be a little more buoyant if I have to sell in March.
I didn't try to defraud anyone, after all, I have struggled and kept up with every payment for almost 5 years now, I made the mistake of believing a guy.

Henry_P_Chester

I'm afraid it's very unlikely that your house would have increased in value so much over the last 5 years. House prices on average are around the 2005/06 level currently so may only break even.

May I ask what part of the country you are in?

mymuk

narnia2000 wrote: »

I have just had confirmation from my lender that they are putting me on a variable rate of 2.99% which makes my repayments £718.25 per month. I have also rented out my last room, so for the next 3 months I will be receiving £1560 per month, which gives me breathing time to find an extra job.

£1560 before or after tax? You are paying tax on that income I hope?

stringsmk2

mymuk wrote: »

£1560 before or after tax? You are paying tax on that income I hope?

haha I doubt it, would you?. I know I certainly wouldn't

PasturesNew

lindsaygalaxy wrote: »

With the figures given, if you work 16hrs you should get help with your CT around £13 a week (plus poss help with the interest part of your mortgage) or if working 30hrs working tax credit of around £37 a week. Not much I know but every little helps. You can however only backdate for 3 months and if you have lodgers will come into income.

The OP is single, so would have to be working 30 hours/week to get WTC. Also, the room income will also be counted so now they're on £18k rent + £8,400 job, so no WTC as it pretty much disappears once you're on £13,500 (or minimum wage for 40 hours/week).

Whether they'd qualify for WTC would depend on their hourly rate. A minimum wage of £5.93/hour for 30 hours for 52 weeks is £9,250. But 20 hours at £8/hour is £8,400 and not enough hours to qualify.