Desperate help needed

hungary97_2

I have been made redundant and may need to retrain and take a salary £9000 less than i am currently on to get a job.

I currently own a property with £35000 Equity in it (98000 mortgage) and Loan repayments on top of the mortgage of £350 a month.

As far as i can see it if i sell my current property at £135000 (ish) pay of my loan (approx balance to repay £12000) and buy a property of £104000 with a mortgage of 85000 i will save myself £400 amonth and therfore be able to afford to take the salary cut.

I have had my mortgage a year and both my loan and mortgage are with HSBC. I cannot approach another kender as i have a very bad credit report.

Do you think HSBC will entertain this? Equally if i bought a two bed place will HSBC take in to credit the potential income if i was to let a room out??

Rikki

If your mortgage is repayment, have you considered changing it to interest only till you can organise your finances a little better?

Curious_Moose

If you reduce your mortgage with HSBC, will there be an early redemption penalty?

hungary97_2

it is on the Homebuyer mortgage which is intereest only for three years. If i continue as i am and take pay cut i will only have £60 amonth to run car and eat with and anyother thing like loo papaer and washing powder.

My mortgage does not have any penalties with it thats what attracted me to it

MortgageMamma

Hi, sorry to hear of your circumstances it must be difficult for you.

I'm not saying you have not thought about this properly. but before you sell your house do consider other options. For a start HSBC do not always credit score their customers, they have an internal "customer score". Which basically means they assess your eligibility for credit from your account conduct, as well as your credit score.

A couple of things that could help you keep the house.

1. Switch to interest only for a short while
2. consider consolidating the loan into the mortgage, its not the best option long term but short term it could reduce your monthly outgoings
3. Do you have kids? have you looked into your benefit entitlements?
4. Will you be paid a bursary or get financial support for your retraining?
5. Is is possible to get a lodger? this could goa long way towards helping with bills.
6. If you are single and cannot afford the upkeep of the house, why not rent the house out, and move into a bedsit or in with the relative? that way your mortgage could be paid and there might be a bit over for you (consider this long and hard. lots of responsibility being a landlord and you would need to get consent to let from HSBC)
7. Have you scrutinised your budget and removed the things which are luxuries?
8. If on a capital repayment mortgage you could extend the term, if on standard variable rate you could get a cheaper product

Before you sell up and redeem the mortgage consider the following points:

1. You might find it difficult to get back on the property ladder with rising house prices. your house is the very last thing you should give up. Prioritise the mortgage above everything apart from food!

2. You could incur early repayment charges for redeeming your HSBC mortgage which will cut into your equity
3. you might not sell at your asking price which could further cut into your equity
4. remember you will have legal fee's to pay on the sale
5. you will need to find money to move elsewhere. if renting, deposit. agency admin fee. and removal costs

Hope this helps

MM

hungary97_2

Thanks for your reply

1>i will receive no financial help for the retraining
2. Their is just me in a big 1 bed flat (no oppourtunity for lodger)
3. The £67 left for car and food is after the standard utilities loan and CC have been deducted.
4. The £19000 deposit is calculated after paying off loan CC solicitor, removal, estate agent etc.

I am lcuky to live in the most expensive part of this city so would be potentially able to buy a two bed in a another part. I am also lucky that the equity is from me doing up the property not the market increasing. I would look for a property that i could do this to again. The salary decrease would last potentially two years while i qualify as an accountant.

hungary97_2

sorry forgotif i rented property out rent would only just cover mortgage and would not therefore save any money as i would still have loan of £400 permonth to pay

MortgageMamma

Could you get a second job whilst you finish your training?

toonfish

without wanting to throw a spanner in the works, if you have a "very bad credit report" you will also need to sort this out if you are hoping to get any decent employment as an accountant.

You could restructure your loan on a secured basis - I hate these but at least you could stretch the term temporarily.

hungary97_2

i am already in the industry in another specialism and i have worked for the biggest firms without any problem therefore my credit report will not effect my employment chances but thanks for your input.

hungary97_2

i may be able to get some bar work but it would not be for much money after tax any more help would be appreciated.