Mortgage advice

tam2oo5

Hi

Im looking for some help , me and my sister have inherited a house after my father passed away. The house had a outstanding balance of 45'000 left on the mortgage and a secured loan of 35'000

The house is worth around £130'000 to £140'000 , we would love to keep the house as its been our home for 17 years and we are still relatively young. Im 21 shes 22, the payments on the mortgage are 400 per month and the loan is the roughly the same so its far too much for us to pay each month on our income. Im currently a student at uni, so only have a bursary. Shes working full time earning about 15'000 a year.

The problem is my sister does not have a good credit rating shes not paid mobile phone contracts, and vanquis credit cards. What im wondering is what do you think the solution is so we could possible combine the two debts and have one monthly payment spread out over 25 years so its a managble debt for us at the minute.

Any solutions would be great.

Thanks

Burridge60

Sorry to hear of your loss.

Has the house passed to you or is it part of his Estate?

Normally it would be part of his Estate and would be sold to clear the mortgage and secured loan as these cannot normally be transferred to another family member. Are there no other Estate assets that can be used to repay the mortgage?

tam2oo5

im the executor of the estate, but ive spoken to both companys and they have basically told me that if i can meet the monthly payments then there will be no problems. But 800 per month if proving impossible for me.

There is nothing else to clear the debt. My ideas were trying to swap the secured loan as it was only taken out a few years ago and was only for a term of something like 13 years or something so the payments are very high. So i was hopeing to combine them into one mortgage and pay that.

There obviously is around 50 - 60k equity in the house so were hoping there is a solution out there.

domthered

talk to the lenders and see if they can extend the term or even switch to interest only for a period

somethingcorporate

I don't think this is going to end with the outcome that you would like.

With a poor credit rating and having a low salary will likely stop your sister from mortgaging for the required amount.

You could consider converting it to a buy to let.

Are you currently living at the house? I cannot see any other way you could keep it really but I would suggest you seek independent advice given it is not a decision to be taken lightly.

Good luck and I am sorry for your loss.

Thrugelmir

Servicing £80k of debt on an annual income of £15k just isn't feasible.

If your sister is unable to meet mobile and credit card payments on time then I feel a mortgage is not yet right for her, lenders most likely will concur.

Best advice is realise the equity and use it towards your own house purchase when the time is right. £30k towards the deposit each is a good start in life.

tam2oo5

Yes were still living there, and obviously if the house has to be sold we will ultimately be homeless.

I will speak to the solicitor and see what she can suggest. Even if we could get a mortgage for the 35'000 for 25 years with something like first 2 years interest only. then when i graduate from uni and in a job hopefully i could maybe combine them both in my name.

we could afford something like 500 - 550 per month so that could be the best solution if it possible. Im totally clueless about mortgages and have no one to ask about it to be honest so im trying to gather as much info on here as possible.

tam2oo5

Thrugelmir wrote: »

Servicing £80k of debt on an annual income of £15k just isn't feasible.

If your sister is unable to meet mobile and credit card payments on time then I feel a mortgage is not yet right for her, lenders most likely will concur.

Best advice is realise the equity and use it towards your own house purchase when the time is right. £30k towards the deposit each is a good start in life.

Thanks for the advice, I know that but its the fact its our family home aswell. Where ive lived the majority of my life.

Even like i said above we could manage the mortgage for 45000 payments if we could somehow bring the other down to 150 per month for the time being.

Cheers

Thrugelmir

tam2oo5 wrote: »

Thanks for the advice, I know that but its the fact its our family home aswell. Where ive lived the majority of my life.

Even like i said above we could manage the mortgage for 45000 payments if we could somehow bring the other down to 150 per month for the time being.

Cheers

Hi ,

I have every sympathy for you and your sister. So my comments are made factually with no malice.

The reality of the situation with the facts given, is that it isn't possible as you wish.

somethingcorporate

Since you live in the house and cannot afford to service the debt then I don't think you have any choice but to sell up.

Mortgages are hard enough for people with jobs to get let alone those that are 2 years away from being in the job market.

tam2oo5

Yeah i understand, There is a slight chance that the secured loan of 35000 gets written off if we are able to get the insurance on the loan to pay out. But this is still not been finalised yet.

I just thought maybe it would have been possible to leave the mortgage for 45000 in my fathers name and keep making the payments to it at the minute. And the maybe get a 2nd mortgage in me and my sisters name for 35000 so we can pay off the secured loan then pay both payments per month hopefully totalling around 550 per month.

Do you guys not even think she would get a mortgage for £35000?