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inapickle33

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Thrugelmir

inapickle33 wrote: »

I don't want my boyfriend to suffer for my mistakes so want to keep this separate from him.

Stop passing the buck. You borrowed money from other lenders besides NR. Accept responsibility for your own actions and move on. Suggest you open a bottle of wine tonight and tell the sorry tale. You'll feel so much better.

With a combined income of £74k you could very easily resolve the situation. Your debts are going to be with you for a very long time otherwise.

Letting the property may well just add to your woes.

saverbuyer

inapickle33 wrote: »

Here’s my history. I really need some help and advice please.

I currently have a 135% mortgage with NRAM, formerly Northern Rock.

• Originally I borrowed 115% with Northern Rock back in 2004
• In 2007 I re-mortgaged and had another unsecured loan approved, based on ‘my’ valuation of the house at the time. (I have to take some responsibility, I admit to that. BUT surely this is irresponsible lending??!!)
• Now, my house is barely worth what I paid for it (£61K) even though I have done work to the property (used loans)
• I now have a mortgage of 82K with a house that is worth £61 at a push
• I have 2 other loans
• My situation has changed recently as my boyfriend and I have decided to move in together.

He is going to get his own mortgage for a larger property for us to live in but this leaves us in an impossible situation.

I would like to let my property until house prices increase but I’m pretty sure that NRAM will refuse me consent to let (CTL) because of the irresponsible lending of Northern Rock which means I may have to keep paying the mortgage for an empty house until house prices increase (will that ever happen?).

I don't want my boyfriend to suffer for my mistakes so want to keep this separate from him.

Important Information
I have never missed a mortgage payment
I am currently on the variable rate (which is a whopping 4.79%)
We have a combined income of approx £74K.
I have a very understanding boyfriend of 7 years.

Questions
What are my options?
Will Northern Rock give me consent to let for a short period of time?
Does anyone have any genuine helpful advice?

Obviously I’m worried for my current situation but also the future. What will happen when interest rates rise and I cannot re-mortgage to a fixed rate due to being with NRAM (asset management) and due to the fact that no one provides such mortgages anymore?

It’s been easy to get into this situation but it’s impossible to get out of.

Would really appreciate some pragmatic advice on how to manage this.

Thanks,
inapickle33

I would suggest you pay down your existing mortgage and loan debt while rates are low. “whopping 4.79%” This is certainly not whopping by any means. Historically average interest rates are nearer 7-8%.

I would also look up “irresponsible borrowing”. They didn’t put a gun to your head and say “borrow”.

If you can’t handle the reality and the struggle (you are going to have to pay for living beyond your means and dropping house values) I think bankruptcy is a real option.

Best of luck. You could also visit the debt free wannabe board.

_Andy_

In 2007 I re-mortgaged and had another unsecured loan approved, based on ‘my’ valuation of the house at the time. (I have to take some responsibility, I admit to that. BUT surely this is irresponsible lending??!!)

If you felt it was irresponsible lending why did you take it out then?

DannyboyMidlands

It takes two to tango so seems a bit silly to blame your situation on Northern Rock. It was you who borrowed the money and then borrowed more............... It sounds like you gambled on rising house prices and lost. Would you have offered NR a share of the "winnings" if your gamble had paid off?

Anyway, with a combined income of £74k it is far from impossible to get out of your situation. Why not just pay off the shortfall?

dimbo61

Please have a look on the debt free board and consider could your boyfriend of 7 years not move in with you and work hard at reducing your debts.
If you want a life and kids together going bankrupt is not a good idea and maybe working at clearing debts then overpaying the mortgage for a year or two could help get you out of this situation
Good Luck

WestonDave

Its not impossible to get out of but it will require you to be open and honest with your boyfriend about the mess you are in. Then rather than buying another property, you both move into this one, and what he would have been paying in mortgage he pays into your mortgage by way of "rent". You've got roughly £25k to shift to get it into a safe saleable position, and on £74k a year between you (which probably means neither of you is paying much higher rate tax) you should be able to shift that in a year. There is next to no chance of prices rising by 35% in the near future to clear this shortfall so you are going to have to clear it the hard way.

As has been stated your current interest rate was pretty typical 4 years ago and pretty good before that.

opinions4u

inapickle33 wrote: »

In 2007 I re-mortgaged and had another unsecured loan approved, based on ‘my’ valuation of the house at the time. (I have to take some responsibility, I admit to that. BUT surely this is irresponsible lending??!!)

Why? You could afford the payments, so what's the problem?

He is going to get his own mortgage for a larger property for us to live in but this leaves us in an impossible situation.

So live in your house and overpay.

I would like to let my property until house prices increase but I’m pretty sure that NRAM will refuse me consent to let (CTL) because of the irresponsible lending of Northern Rock which means I may have to keep paying the mortgage for an empty house until house prices increase (will that ever happen?).

This whole sentence loses you friends. Take responsibility for your situation instead of blaming somebody for lending you money that you asked for to do something you wanted to do.

I don't want my boyfriend to suffer for my mistakes so want to keep this separate from him.

In life our baggage will always impact our partners.

I am currently on the variable rate (which is a whopping 4.79%)

What was it in 2007? 7%+? Make hay while the sun shines. This rate is a perfect opportunity to overpay.

We have a combined income of approx £74K.

So combine it and pay down the debts before taking on new mortgages.

Will Northern Rock give me consent to let for a short period of time?

Why will this improve your position? Property isn't going to increase in value.

What will happen when interest rates rise and I cannot re-mortgage to a fixed rate due to being with NRAM (asset management) and due to the fact that no one provides such mortgages anymore?

Your payments will increase. You know this. It's a fact of life. Some people posting on here paid 15%+ for their mortgages.

Would really appreciate some pragmatic advice on how to manage this.

Reduce costs as a couple and overpay your debts. Your incomes give you the opportunity to do this if you combine your efforts.

While blaming the lender is all well and good, it doesn't serve any purpose. You borrowed the money - time to accelerate repayment to get out of the situation.

Overpay.

(Feel free to challenge any of the assertions, but fighting this as a couple will achieve more than getting more debts and maintaining two properties).

_Andy_

I love how the OP is slating their lender even though they haven't even asked for CTL yet.

Thrugelmir

Inapickle33 don't be afraid to post again!

We are genuinely trying to help you. Not pass judgement. So take comments personally. There is a wealth of business experience on this forum. Along with own personal collection of teeshirts that have been accumalated through our lifetimes.

GAH

OP, first of all, I would contact the lender to see if you can get your CTL, either way you will know your options there. You could well find them wanting extra Adminstritive fees or higher interest rates.

Remember Interest rates are only going to go one way, and that is up.

And depending on where you are in the country, house prices are dropping.

So if you are looking to let the property to reduce the mortgage to get to the breakeven point, it probably won't be a short term plan, probably more like a 10 year plan.

If you were to let, bear in mind, you could have letting agents fees of 5-15%, void periods, contingency money if tenant doesn't pay rent, Gas safety Record, EPC, Money aside for any repairs, Landlords insurance.

TO get the monkey off your back, maybe a better option is to sell, and you will have to pay off the difference.