how can i get out of a 100% mortgage

redroofer

BoGoF wrote: »

In that case your options are either

1) Set up a repayment vehicle, but that seems unlikely as you said you cannot afford to save any money
2) Switch to a repayment mortgage, which will increase your mortgage repayment - is this feasible?
3) Stay on interest only but overpay.

The bottom line is that unless you take steps to reduce the capital you will be giving the keys back in 20 years. Bear in mind there is only one way interest rates can go, could you afford to pay the mortgage if rates increased, say, 3%?

1, no
2, possibly
3, no
so i can ring the mortgage company and they can switch to a repayment on 100% of the mortgage?

BoGoF

That depends, did you take a fixed rate out for x number of years?

BargainGalore

If you had a mortgage for 4-5 years now this is pre credit crunch. So you got a mortgage in the hope your property would increase in value but no provision to put aside any money even though interest rates have dropped since you took out a mortgage. If you cant put money aside then you may be stuck when you come to move or when mortgage has ended and nothing to pay the original loan.

Can you not get a part time job?

If you switch to a repayment mortgage you will pay more any way you said you dont have an extra to put aside

Thrugelmir

If money is tight. Initially stay on interest only and pay off what ever you afford to. Don't worry about being in negative equity. Paying the mortgage every month is what matters. Once you start reducing the interest then you'll start clearing more capital. Will be a slow process but the sooner you start the easier it will be.

See where you cut back to save a few pounds that'll help pay down the mortgage. Suggest to take a look at the Debt Free Wannabe board. You'll get lots of advice and support on there.

aliasojo

BoGoF wrote: »

1) Set up a repayment vehicle, but that seems unlikely as you said you cannot afford to save any money
2) Switch to a repayment mortgage, which will increase your mortgage repayment - is this feasible?

You said you can't afford to save but you could possibly increase your mortgage payment if it were change to a repayment type.

With respect, how can you do this if you have no extra cash available? If there is no extra cash to utilise then you have no options at all, especially given that you are in negative equity.

I think you are stuck between a rock and a hard place right now and there isn't a great deal you can do at the moment.

Yorkie1

As tbs624 says, the only 2 ways out of this are either to set up a separate savings / investment scheme to repay the capital at the end of 20 years, or to reduce the loan to value - through going onto a repayment product or overpaying on your existing product.

Pop over to the debtfree wannabee board, do a statement of affairs (SOA) - income and outgoings - and they'll help you identify any areas you can make savings to help.

GMS

You cannot get out of the mortgage and keep the property.

Hand back the keys as a voluntary repossession and you will trash your credit file and be pursued for any shortfall on the sale.

Ignore the negative equity bit as best you can. Would you be able to rent a similar property for any less than you are paying now?

Speak to the lender and ask them what options you have in terms of changing to repayment either in full or for part of the mortgage. Overpay as much as you can here and there to reduce the capital.

Eventually you will be out of negative equity and certainly in 20 years by which time you would hopefully have repaid most of the mortgage.

Sit down and work out exactly what you can afford. You cannot remortgage to another lender so you need to eat into the debt as best you can.

Good luck

MissKitty

What about if you switched your mortgage to a repayment and rented your house out?

This would only work if the rent you would get for your house would cover the mortgage payments.

You could then rent somewhere yourself that is cheaper than what you are currently paying for your mortgage, so it gives you a chance to save up some money to reduce your mortgage and you could eventually move back in to your own house.

Bearing in mind that if you have no tenants in your house you would have to cover your mortgage payments and rent.

charleyroo

I may be wrong, but usually to rent your house you need a BTL mortgage (or at least ask permission from the bank) and I'm sure you also need to be under 75% LTV.

jaysb

and what about the costs to rent ?

I don't think you have much choice other than staying put and trying to make overpayments, whilst rates are low.

I'm in the process of remortgaging at the moment, so know how difficult it is to get an offer even with a LTV of 33%.

I'd be surprised if another lender would make you an offer, but no harm in checking.

I think your existing lender may be your best bet, if you want to change mortgage product. On your original mortgage app did you say whether you had a repayment vehicle ? did they ask ?