Girlfriends parents losing house. Need Help!

ian_jamieson

Hey folks, looking for a bit of help and advice.

My girlfriends parents have two weeks to get out their house as it's being repossessed from the bank.

The house is actually very big and was build by my girlfriends dad (He's a builder). They hit some difficulties during the past couple of years (who hasn't) and with not much work they've been struggling to keep up repayments on £100,000. His mortgage rate is currently 8%.

They've been trying to sell it, and have reduced the price to £180,000 - Initially it was worth £300,000 before the recession. But can't sell it either.

They're now being told to get out within two weeks and the house will be auctioned.

Is there anything I can do?

A few issues have came into my head - like buying the property myself at a reduced rate and living there with her parents in the "granny flat", or somehow coming up with money (£5k) to stop the repossession going ahead.

Just looking for a bit of advice here from those of you in the know. What are my options?

ognum

Firstly I would like to say how kind you are to try to help.

Have you talked to your girlfriends parents about what they have already done, how much in debt they are and what there mortgage holder has said.

I can imagine they are repossesing the home over 5K and a couple of missed payments they must have a large default or simply not been communicating with the bank.

I am guessing it may just be too late and you might be better saving the money you have. Sorry

ian_jamieson

ognum wrote: »

Firstly I would like to say how kind you are to try to help.

Have you talked to your girlfriends parents about what they have already done, how much in debt they are and what there mortgage holder has said.

I can imagine they are repossesing the home over 5K and a couple of missed payments they must have a large default or simply not been communicating with the bank.

I am guessing it may just be too late and you might be better saving the money you have. Sorry

I 5k is just the amount they have to pay within 2 weeks to stop repossession. The debt is just the 100k they have in a mortgage. They've been in touch with the lender but they've been struggling for a while. I just wish they had said sooner, maybe we could have all chipped together.

There must be something?

princeofpounds

Be careful first of all - often people in this situation do not disclose precisely how much trouble they are in financially. Payments are a mere 8k a year. Two supermarket shelf stacking jobs could deal with that, so why are they finding it a struggle? More debt?

Why could they not refinance at a lower rate? Have they looking into this? Their equity is very high.

That said, here are some ideas.

- They should look into all the benefits they might qualify for. Working tax credit? SMI?
- Has the repo actually been awarded? If not then the 2 weeks deadline is nothing of the sort - court order is the time to actually think about getting out. If you then meet the arrears they may well stop possession proceedings. Do they qualify for legal aid?
-If you want to help directly then you have to think about what you really want to achieve before we can be of that much use. You could just lend them money, but you take on the credit risk. You could buy the house, but then they must take on the risk of being tenants/lodgers and you LL. Whatever you do there is a relationship risk.

googler

If the worst comes to the worst -

Offer them help in storing items of personal and sentimental value from the house.

Photographs, negatives, slides. Gifts from special occasions.

Furnishings, kitchen appliances etc. are dispensable, but some stuff can't be replaced. Help them salvage this. If their house is anything like mine, it'll take more than 2 weeks to gather all this together, so they may need help.

ian_jamieson

I'm going to have to speak to them about it and find out how much debt their actually in.

Makes me feel sick though. Banks cause global meltdown. Take the houses of those suffering because of it.

TrickyDicky101

princeofpounds wrote: »

Payments are a mere 8k a year.

I agree with the thrust of your comment, but it would only be £8k a year if it was interest only - if on a repayment basis, the payments could be much higher if the remaining term is only a few years.

paddy's_mum

Honestly? Be very, very careful that in your pity for their situation and your commendable desire to help, you don't allow them and their difficulties to drag you under right along with them.

Have they done anything to help themselves with all this financial chaos, like let a lodger take a room in the "very big" house you describe?

princeofpounds

Makes me feel sick though. Banks cause global meltdown. Take the houses of those suffering because of it.

Without wanting to sidetrack things, it takes two to tango. Whilst no-one knows their future earnings potential exactly, borrowing money on a variable rate is ALWAYS a risk. The bank shouldered a risk and so did your 'inlaws'. Both have suffered misfortune.

if on a repayment basis, the payments could be much higher if the remaining term is only a few years.

Fair point, but would be an odd mortgage structure to amortise over such a short period.

hcb42

I suspect there is more to this than tells the tale. how long will the £5K buy them...seems crazy the bank would repossess for that - can they service the debts long term, this is not a massive amount of money, can they not downsize to rid themselves of the debt, be very clear about what you are doing here

ian_jamieson

paddy's_mum wrote: »

Honestly? Be very, very careful that in your pity for their situation and your commendable desire to help, you don't allow them and their difficulties to drag you under right along with them.

Have they done anything to help themselves with all this financial chaos, like let a lodger take a room in the "very big" house you describe?

They actually asked me and my girlfriend to move in a few months back. I'm guessing this was them looking for extra income to pay. Never actually realised it at the time though