What Options Are Open To Us ?

bandos2007

[FONT=&quot]We have a 5 yr fixed repayment mortgage of £76k, fixed at 5.63% until June 2013 when it reverts to BMR, currently paying £696, with arrears of £4.5k. The lender has given us a choice to either pay extra each month (currently paying a nominal £1 per month off the arrears) to clear the arrears or add the arrears on to the end of the mortgage. We would struggle to find more than £20 extra per month, what other options do we have ?[/FONT]

bandos2007

We could really do with some advice on this, the lender is pushing for a decision, can we remortgage?

xyellowx

most mortgage advice on here is from people in the industry bump the thread mon 9am you will get some help

Meeper

If you can't afford the property, put it on the market.

bandos2007

Is that the only option we have, to sell it? What effect would adding the arrears on to the end make ?

bandos2007

As the BMR is currently about 2.5% can we get out of the fixed rate deal early ?

opinions4u

I think you're stuffed.

You won't be able to remortgage and the lender won't allow you to break the fix (even if you could pay the ERC).

If you can't afford the normal mortgage payment, sell it. There really is no alternative.

If you can afford the normal mortgage payment but can't afford enough to start clearing the arrears, you need to reach a new agreement with the lender. They don't have to agree with your proposals. I'd suggest using CAB, Shelter or similar to support you with this negotiation.

I'd also go to www.makesenseofcards.co.uk, complete a statement of affairs (SOA) fully and post it on the Debt-free Wannabe part of the forum. It may help to highlight the things you can change in your budget to start clearing debts at a faster rate.

getmore4less

bandos2007 wrote: »

[FONT=&quot]We have a 5 yr fixed repayment mortgage of £76k, fixed at 5.63% until June 2013 when it reverts to BMR, currently paying £696, with arrears of £4.5k. The lender has given us a choice to either pay extra each month (currently paying a nominal £1 per month off the arrears) to clear the arrears or add the arrears on to the end of the mortgage. We would struggle to find more than £20 extra per month, what other options do we have ?[/FONT]

Going to BMR(is that base+2%) will give breathing space after june 2013 so you need to last till then unless rates rise.

This is a one chance you need to plan right and not go nto arears again.

adding the debt is probably the cheapest if you don't have the money, it will be accrueing interest anyway.

You need a to do a full financial review and cut spending do a SOA
http://www.makesenseofcards.co.uk/soacalc.html

probably best to post on Debtfreewanabee rather than here more focused help there.

A £76k mortgage @ 5.63% paying £696 is a term of around 13years

Addng £4.5k will add around £40pm to the current payment costing over £6k in 13 years.

If this will be a struggle then another option is to try to get then to extend the term(adding the arrears) to say 20years the new payments would then be £560 even just adding 2 years to make it 15 years would be £664pm

Remortgage is going to need arrears, ERC fees etc added so unlikely with arrears and affordability issues.

unknown LTV, what the place worth?

Any other debts?

kingstreet

I'm trying to figure out why there are two threads running on the same subject?

Posted in both threads on the same subject. Is there a mod facility to merge threads on here?

If you can't afford the increased payments from capitalising the arrears, you have two choices;-

- sell the property and pay off the mortgage
- make the Nationwide an acceptable offer you can afford.

You can't change from one product to another without paying any early redemption penalty which might be due and you have no chance of remortgaging to another lender with a current arrears situation.

getmore4less

Other thread says the mortgage runs till you are 70.

What are the income projections?

If you are strugling now, are you looking at a drop in income?

bandos2007

thanks for all the replies.

The current value of the property is approx £150,000.

We have about £20k of other debts.

The one positive is that £130 per month hp on a car ends in december. We have told the lender about the hp finishing, though we would prefer not to commit all of it to the mortgage arrears. Can anyone advise what additional monthly figure is likely to be accepted by the lender?