Capitalisation?

lucylooloopants

hi - about 2 years ago, my husband and I got into some difficulty and couldn't pay our mortgage. We were referred to a solicitor and have been making payments for about a year now. We are on variable interest only. So we pay the basic plus £150 off of out debt. We are about £7,000 in arrears and can not pay it back. We are only just making ends meat. We have today had a letter from the solicitors saying we are eligible for capitalisation. If I'm honest - I don't know what this means? I'm assuming it means the arrears is put back on the mortgage and we come out of being under the solicitor? Any help or advice would be greatly appreciated. Many Thanks Lucy

Senior_Paper_Monitor

Who is lender ?

What are the figures (mortgage, property value, income, dependents, your ages and remaining years of the mortgage would be a good start).

You are correct they are proposing to add the arrears to the loan and recalculate and as long as you comply with that agreement you will return to a comparatively normal relationship with the lender.

shortchanged_2

Can you continue with this mortgage?

You state that you are only just making ends meet.
Is there any equity in the property? Can you sell up and downsize or get a cheaper property?

Thrugelmir

lucylooloopants wrote: »

I'm assuming it means the arrears is put back on the mortgage and we come out of being under the solicitor?

May still result in a higher basic monthly repayment. So won't make life any easier.

Time to have a major rethink. Getting stressed and worried won't do you any good. A fresh start may seem daunting. But you''ll be a lot happier for it.