Help needed urgently

moneymagnet_2

I am desperate for some advice please. For the last few months my mortgage company have been trying to get me to switch to a new provider. I have refused each time as my finances are very rocky at the moment (no job, but getting a small amount of work self employed) and I don't think another provider will take me on. They have now written to me saying that they are increasing my mortgage by an eye watering 1.5%! as their cost of funding mortgages has increased significantly recently. This is a terrible blow and there is no way I will be able to find the money as I am really struggling as it is. The base rate has remained the same - can they do this to me? I am feeling very anxious and tearful at the moment - anyone know what to suggest please?

Dave_Ham

Hi there,

Unfortunately they can do this legally, you will find a lot of dissatisfaction nationally about this at the moment.

It is a hard predicament, I am assuming there is just you on the mortgage and would be tricky to see a solution given your self employed status..

What is the loan on your property and what is the value and would you be able to get anyone else to go onto the mortgage in order to change lender?

moneymagnet_2

Thanks for your response. It is in fact a shared mortgage, but my husband is on a very low income - minimum wage and currently a 20 hour contract. Things are dire. There is a small amount of equity (very small) but I can't face uprooting two teenage boys who are due to start GCSEs, and anyway I would still have to find somewhere to live. I feel that I have been spinning plates for so long, but now they are due to come crashing down I think. How can they justify this?

Dave_Ham

This is not necessarily me justifying it, but technically they are allowed to do it and therefore they have.

Had rates stayed where they were, you would have been suffering this issue 2-3 years ago instead of now due to the part time employment issue.

Only thing you can do is see if they will increase your term (assuming you are on a repayment mortgage) which will reduce your outgoings in the short term but not good advice long term.

Sorry there is nothing more positive to add.

All the best..

ACG

Im not sre they have to.

The problem you have is that if you dont do something (whether that be a part time job, a new job, moving home or something else) is that it could get on top to the point where even if you want to move house your credit report is poor and you cant get another mortgage.

I know your kids are doing GCSEs but in a year they will be doing AS levels and then A levels and so on, there is always a reason not to find a way out of it, they wont be studying if it comes to people knocking at the door.
I know that could well be a long way off, but it could come round sooner than you think. Im not trying to scare you, just realise that it does require you to put your thinking caps on and find a way to avoid any issues down the line.

It could be cutting back instead of earning more or a combination of the two - reduce the sky down or get rid completely...do you need mobile phones AND a phone line? Ive got rid of our phone line as we all have mobiles £12 a month saved. Get things on ebay, ive got about 50 DVDs that i know ill never watch that are going on ebay this week, even £2 each is £100. Is there anything you can do from home? Avon etc?

Sorry i know that probably isnt the answer your after, im just trying to throw some ideas out there which might help you a little.

DannyboyMidlands

I'd be tempted to sell and rent while there is still some equity to be had. Rates are only gonna rise further from here.

moneymagnet_2

Thanks for all your response and your helpful suggestions -can't tell you how disgusted I am - who els would get away with a 50% increase? I didn't sleep last night.

chalkie99

moneymagnet wrote: »

can't tell you how disgusted I am - who els would get away with a 50% increase?

How long have you held your mortgage?

What was the rate when you took it out?


Typical SVRs only three and a half years ago were around 6.5% - 7% and there was a distinct lack of complaints when rates came tumbling down. The new increases still leave rates below what they were a few short years ago so I'm not sure why you feel so aggrieved.

moneymagnet_2

Well Chalkie, as I said I assumed it would only go up when the rates went up, my naievety I know. I have had this mortgage for 8 years and have never suffered a 50% increase before. I used to have a good job, but lost that, so now I am struggling. I am not "aggrieved" for the sake of it - more shocked and desperate - I can hardly afford to feed my kids as it is. How would you feel?

originalmiscellany

Chalkie I am sadly in agreement with you. I think many people have forgotten "real" economics of 5 years ago - and when Mervin King (was it?) said "we've never had it so good" he was actually right, and forward looking to the black clouds ahead rather than looking back at where we've been in a plateau of low rates (and people forget how low) for three years.

moneymagnet, I would ask you what have you done in the last three years of record low interest rates to help insulate yourselves and finances against the inevitable rises?

Dave_Ham

Hi again,

You came on for some practical advice and lets not turn the thread into an emotive one, as that will not help you.

They are legally allowed to do it and have done, as stated you have probably been unequally better off for the last 2-3 years so lets try to look forward.

They will not change their decision, ACG had some good ideas to try and cost cut and increase income as you are the only ones who are going to help you out here.

Do not suppose you have any unclaimed PPI on and old or very old loans or credit cards - should they have been mis-sold of course.

Have you claimed the maximum amounts from the govenrment, would you actually be better off if hubby was not working and then looked for a full time job.

Can you sell anything you have lying about; one mans rubbish is another....

Sky is always a really good one as people view it as a necessity nowadays, but is it really??

Landlines and Sky possibly top £60-70 a month, gym memberships another cashflow killer, 2 car families if you can get away with 1 and a bit of discomfort...

Probably not the right forum for it here, but practically can you extend the terms of the mortgage to reduce the monthly payment - subject to you being on a repayment mortgage...

Good luck