Treading Water - but is there another way?

roboharrisono1

Hi all

I am in a very poor financial position and have been dealing with it for a few years now - and am gradually getting myself out of the mire......but very slowly indeed. I am wondering if there is something I am missing and wanted to ask if anyone had any ideas.

Main problem is that I have a high mortgage payment - too high in all likelihood. I have a 200K interest only mortgage on a property that was worth 220K 5 years ago and is now worth less (probably about 205K). I am therefore in a near negative equity situation. Mortgage lender is Basinghall Finance PLC (it was a GMAC originally before they sold it on). The interest rate is a horrible 6.25% on the Standard Variable - and I see no way to get off it.

My income has gone down considerably - as has that of my wife - with no foreseeable chance of an increase. Redundancy in my case was the issue - looking after our kids in my wife's case. We only earn about 40K between us (me about 30K last year - my wife 10K) - and that means our LTV is high compared to what we could even hope to get on the mortgage market.

I have poor credit history, as does my wife. We have outstanding debts of about 20K combined and are gradually getting through them on arranged payment plans. It's not good - not good at all - but it is getting better bit by bit. I estimate about 10 years before we dig ourselves out completely at the current rate.

Does anyone have any thoughts on what I can do differently or am I just being hopeful?

ACG

I dont think there is a lot you can do short of downsizing.

Interest only mortgage - you cant extend the term as it wont make any difference and you cant move it as interest only mortgages are being phased out.

Is there a possiblity of you porting your mortgage to a new property? Maybe downsizing and therefore reducing your monthly repayments? I would guess not but if its an option it maybe soemthing worth considering.

To be honest i dont think there is a lot you can do...probably not what you wanted to hear.

Crashandburn

Not what you want to hear but check the rents in your area. If a £205/215k property is letting for £800-825pcm, then you are paying £1041pm for the same sort of thing on your interest only mortgage.

By going into rented you'd have a reduced outgoing.

Might be worth a call to Basinghall too only to see if they will accept a final reduced payment for settlement of the debt and off their books. This could release a lump sum to clear unsecured debts or pay for rent for a year whilst you attack your unsecured debts.

Good luck.

roboharrisono1

Thanks for the responses guys.

I had thought about rental - however there is an issue with that as my wife works from home as a childminder and apparently renting a house means she would not be able to continue with this. This is second hand information though so I will verify this to be sure.

The same applies for downsizing really too - as we need a property that is big enough to support our own 2 kids and the number of children she looks after. If we have a smaller property then her childminding certificate gets downgraded. This decreases her income and perpetuates the problem.

The only other option I can see is a cheaper area really - we live in York and it is one of the more expensive places in the region (apart from Harrogate). I work south of Bradford so that means my petrol bill is pretty high. Bradford is a heap load cheaper.......but my wife would have to start from scratch with her business again and the kids would have to move school.......coupled with the fact that York is an infinitely better place to live (in my opinion anyway).

I will grin and bear it. No CCJ's and no debt collectors yet - staved them off for over 3 years so far by keeping things afloat. After this is all done I should be able to get a job as a tightrope artist in a circus - although I bet it does not pay too good.

Angry_Bear

I'd suggest you re-post this in the Debt-Free Wannabe section - you'll get lots of advice on how to manage on a shoe-string.

Dave_Ham

Not my area, but considering an IVA musst be an option..

My experience with clients coming out of IVA's is all good. Most have retained their property, they are completely debt free and wiithin 1 year of completion the credit files are clean.

10 years is a long time and kids do not get any cheaper...

Good luck

Simon_gloster

roboharrisono1 wrote: »

Hi all

I am in a very poor financial position and have been dealing with it for a few years now - and am gradually getting myself out of the mire......but very slowly indeed. I am wondering if there is something I am missing and wanted to ask if anyone had any ideas.

Main problem is that I have a high mortgage payment - too high in all likelihood. I have a 200K interest only mortgage on a property that was worth 220K 5 years ago and is now worth less (probably about 205K). I am therefore in a near negative equity situation. Mortgage lender is Basinghall Finance PLC (it was a GMAC originally before they sold it on). The interest rate is a horrible 6.25% on the Standard Variable - and I see no way to get off it.

My income has gone down considerably - as has that of my wife - with no foreseeable chance of an increase. Redundancy in my case was the issue - looking after our kids in my wife's case. We only earn about 40K between us (me about 30K last year - my wife 10K) - and that means our LTV is high compared to what we could even hope to get on the mortgage market.

I have poor credit history, as does my wife. We have outstanding debts of about 20K combined and are gradually getting through them on arranged payment plans. It's not good - not good at all - but it is getting better bit by bit. I estimate about 10 years before we dig ourselves out completely at the current rate.

Does anyone have any thoughts on what I can do differently or am I just being hopeful?

If you have retained GMAC's original teds, their mortgages were portable ie to he able to move it from one property to another.

I do feel for your position, and to port you'll need your own funds. If you have £20k of debt you possibly don't have that.

With all areas covered already, I really dont think you have an option to get family help, sell up and start again.

As mentioned you will struggle to get int only again and its likely Basingall want rid of you so they may adopt repayment only if you move.

Gmacparatuscrooks

Hi, I'm a newbie and not sure how to start a new thread or where to post this...

If you have (or had in the past) a mortgage with GMAC (now Paratus) you may have some experience of the horrendous way they treat their customers. For example refusing to come to arrangements regarding arrears, asking for ridiculous amounts of information in order to reach a repayment plan only to use the info. as reasons to reject proposals and repossess, apply excessive and unfair charges, bullying customers...the list goes on.

A blog has been set up (go to google and type in gmacparatuscrooks) to see if we can put a stop to this.

Please visit the blog and email in your experiences of dealing with GMAC / Paratus. If we can get enough detail on what they have been up to, and how unfairly they have been treating their customers then we can go after their license and stop this happening to anybody else.