Mortgage Problem - Interest Only

skintmum1_2 · 3 January 2012 at 8:42PM

Hi, I'm new to this site and i could do with some constructive advice. My hubby and i separated 2 weeks ago and he has moved out into rented accom. We have a young child.

I asked for all the paperwork and i am realising how stupid i have been as i was very ignorant of financial decisions and now i'm left with a mess.

Basically we have an interest only mortgage. Amount borrowed was 222,000 and there is 6 years left to run. Mortgage payments are around £500 per month. Our house is 6 years old. Our house is in negative equity and is prob worth around £180,000.

To top it off, we made more mistakes and entered into an IVA 2 years ago. Therefore, my credit rating is worth !!!!!! all.

I'm really confused about what to do and my main priority is to keep 'a' roof over my child's head.

I am considering going bankrupt as this is like a noose round my neck but if there was any merit in phoning the mortgage company i would....i'm worried about what they will say.

As we had to pay off debts with our savings, i have nothing to put towards the mortgage (which was the original plan when we took it out).

Any guidance would be appreciated but please keep it constructive as i'm in a bad place as it is.

thank you......

Meeper · 3 January 2012 at 9:10PM

The best plan in this situation is to speak to your mortgage provider. You gain nothing by not communicating with them and they much prefer to have a dialogue before things deteriorate rather than having to pick up the pieces later.

Did you get the mortgage direct with the lender or was it via a broker? How did they determine that interest-only was suitable for your needs? Could you have a case for the mortgage having been poorly advised in the first place?