HELP! Shared ownership remortgage nightmare.

Margaret84

Hi Guys & girls,

I am new to this forum - But have been meaning to join for years as I often come on here for friendly advise from others questions..

I bought a 25% share in a property 5 years ago and now I would like to buy the remaining share of 75%.

My flat is worth £69,000 now (It was £89,000 when I bought the 25% share at £21,600)

So now I can buy the remaining share for just £51,750. :j

The problem I have is 3 years ago I had 6 defaults registered against me from non - payment of credit cards

This has caused me adverse credit history.

I have a £10,000 deposite and earn £35,000 pa but nobody will help me. I paid the cards off (3 jobs/2 year period)

I went to my current mortgage lender who declined me and then I went 2 my bank who said the same.

My interest rate is 6% (has been since I took it out) & I have doubled my monthly mortgage payment for the past 6 months to show the bank I can more than afford the higher payments.

I also pay rent on the remaining share and the combined total is more than the mortgage payment would be so I can prove that I can afford the payments comfortably.

I am scared that I will end up being stuck paying rent when I don't need to but I can't sell as I have been through too much trying to keep it to sell at a loss.

Should I pay the £10,000 off my mortgage if I can't buy the remaining share? I could pay off my 25% share within 12 months so would it be better to do this then apply for a fresh mortgage for the 75% share elsewhere?

Any advise is welcome and thanks in advance..

Maggie

Thrugelmir

If you are paying a rate of 6%. Maintain the overpayments on your mortgage.

Six months is a relatively short period of time from a lenders perspective.

ACG

Alternatively reduce your payments back down, save up the additional £6k (give or take) and buy the 25% for cash. That atleast get you to 50% and so looking for a smaller mortgage.

You dont say how much the defaults were for and when they were cleared but it sounds like your in a strong position, maybe see a broker befor eyou make any more applications?

brit1234

Always pay off your mortgage before staircasing, it alows you to sell easier (major problem with shared ownership) and protects you from further price falls with the housing association taking the lose on 75% rather than you.

Goodluck

Margaret84

Thanks for all the tips and options..

If I wanted to buy another 25% outright, how could I keep my solicitors cost down as I already live there? (it cost me shy of £2000 when I bought the 25% initially-Ripped off) :mad: Its a housing association that owns the remaining 75% share..

Also can anyone suggest any mortgage brokers who may be able to find me a good remortgage option? My score on experian is 967 - Excellent. Just the defaults holding them back..

FYI - Debts were £21,000 - 14 creditors including credit cards and loans :eek: - As originally stated all paid off and settled.. last default registered July 2011. :beer:

Thanks in advance..

Maggie

HappyMJ

Margaret84 wrote: »

Thanks for all the tips and options..

If I wanted to buy another 25% outright, how could I keep my solicitors cost down as I already live there? (it cost me shy of £2000 when I bought the 25% initially-Ripped off) :mad: Its a housing association that owns the remaining 75% share..

Also can anyone suggest any mortgage brokers who may be able to find me a good remortgage option? My score on experian is 967 - Excellent. Just the defaults holding them back..

FYI - Debts were £21,000 - 14 creditors including credit cards and loans :eek: - As originally stated all paid off and settled.. last default registered July 2011. :beer:

Thanks in advance..

Maggie

It's too soon. You need to wait a bit longer than less than 1 year. Isn't the rent cheaper than a 6% mortgage anyway?

Margaret84

Thanks for the reply happy.

Yes the rent is cheaper but its dead money to me.. I would rather pay more and get closer to owning it than wasting money on rent..

:j

jayphe

Margaret84 wrote: »

Thanks for the reply happy.

Yes the rent is cheaper but its dead money to me.. I would rather pay more and get closer to owning it than wasting money on rent..

:j

Just think of the rent as a cheap interest rate, they're the same thing anyway, rent the money at 6% or rent the asset at less.

Putting the equivalent of the mortgage capital payments on the extra 75% into overpayment first, then a savings account means you're getting just as close to the net position of owning as if you had a mortgage on the rest of it, compound interest takes care of that.

The only thing you don't get is the profit/loss from changes in the asset value. I'd be quite happy about that though, you've saved yourself a 5-figure sum already by not owning the whole house. :beer:

With it being a shared-ownership you also avoid the normal rent-vs-buy problems of low security of tenure and no real input on decor.

dimbo61

If you can clear the mortgage on the 25% that you already own and are paying 6% on then that puts you in a stronger position to buy the rest.
If you can,t get a mortgage for the rest then build up savings in cash ISA,s over the next couple of years and put down a large cash sum when you are allowed to remortgage.