Qualifed Advice/Help Please

K-rado

Dear all.
Could you please advise me on the following. I am in a little bit of a pickle and not overly sure which way to turn.
I have a house, that we have lived in for many years and very much loved by all the family. Kids are settled in school and my wife works in a hospital close by.
Problem is: I have been unemployed ( without regular income) for almost 2.5 years and struggling to pay the bills ever since. Although, We have managed to scrape by every month having cut-back enormously, it is becoming ever more burdensome to meet the bills.
Is it possible to borrow money based on my current circumstances against the equity in my home? I have a mortgage ( intrest only currently on a variable) of approx £350k and a personal loan of approx £10 K. The property was valued last year at anywhere between £650 and £695K by local estate agents. I would suspect, given the current market, that its value would be somewhere around £625K??. We really don’t want to have to move but it is becoming every so difficult. What is the answered? Hopefully things will pick up in the next few years and things wont seem so bad.
Thanks in advance.
K.

CloudCuckooLand

Current lender won't let an equity release scheme override their first charge. Not that you'd want true "equity release" really.

Lender or 2nd lender unlikely to give additional funds, assuming wife is not a manager in NHS on £100k+...

Have you checked into all the mortgage rescue schemes to see which, if any, may apply to you?
http://mortgagehelp.direct.gov.uk/what-are-my-options.aspx

Sometimes you just have to cut your cloth to fit...a £280k house, mortgage-free would be a god-send to 95% of the population = downsize/relocate to cheaper area to keep same size ? A remortgage based on your wife's salary only could perhaps retain a £60k mortgage to get something around £340k...

If you don't, as you won't be able to remortgage when rates rise, you risk losing the house to repossession next year, which will be a low sale price, with charges and fees deducted, and dent the equity even further...

K-rado

sound advice CCL and if it was just me, on my own, I would have done this ages ago. But if only everything in live was so simple. I have to consider my mrs and kids who really love it here, as do I . We are noth wealthy and just so happen to live in an expencive neck of the woods. I bought the property as an investment, third step on the housing ladder some years ago with the view to extending/ adding value etc. etc. but things went Bang. Is is not a little short sighted to cut and run? I know its a gamble but surely there must be another option besides selling-up?

opinions4u

More debt that you can't afford to service is not a good idea.

If a job seems unlikely, sell up and slum it in a £300k house.

Thrugelmir

K-rado wrote: »

I bought the property as an investment,

You have surfed the wave of the house price boom. With investments you cash them in at the top of the market. Maybe time to reappraise your goals in life. As why struggle to pay the bills when life could be so less stressful.

K-rado

Thrugelmir wrote: »

You have surfed the wave of the house price boom. With investments you cash them in at the top of the market. Maybe time to reappraise your goals in life. As why struggle to pay the bills when life could be so less stressful.

I know it sounds cockey ( but not ment to be) but I know all this. An investment at the time however developed emotional ties over the years. We moved around, with the kids and this was not good. All are now settled and thats the thing that is bugging me more than anything. There are little or no houses in the locality that would be suitable and could downsize to ( again not a prob) and would have to move away again. The thing that will really do my mrs head in will be the stress of moving, she will not take to it to kindly:(.
Sods law will dictate ( dot you know) once we have moved I will have a good income again inorder to have some sort of a lifestlye and pay the bills. is a secured loan out of the question? I and kinda self-employed at the mo, but again work is sluggish to say the least. I would like to set-up a new biz but currently lacking seed capital. it just gets better!

SouthCoast

Visit the Debt Free Wannabee Board for advice on living within your income.

Thrugelmir

K-rado wrote: »

I know it sounds cockey ( but not ment to be) but I know all this. An investment at the time however developed emotional ties over the years.

Sometimes you have to detach yourself emotionally and look at the wider picture. Most importantly towards the future.

K-rado

Very Good All and Txs for the advice. Gonna sleep on it (again) and conjour up a plan. K

justme111

K-rado wrote: »

K.

I am not qualified whatsoever so my suggestion/question may be not sensible. Could anybody explain me/ op why is not it possible to re-mortgage extending the term? If there are 15 years on the mortgage left for example extending it to 25 would result in lower monthly payments.
although if it is interest only question arises how would op expect to pay capital... If he did not then he knew they were going to have to sell sooner or later..

Thrugelmir

justme111 wrote: »

If there are 15 years on the mortgage left for example extending it to 25 would result in lower monthly payments.

The mortgage is interest only. So extending the term will not make any difference.

Personally I would be asking myself is sitting on a £350k debt advisable when interest rates longer term will rise. Also if property prices were to drop just 10%. That's a potential £65k of equity capital wiped overnight. Or around 20% of the equity in the property.

As with was the case during the house price boom. Leveraging upwards on debt is all very well. However price falls are likewise compounded when markets decline.