Please help an idiot

skeeps

I feel totally stuck and desperatly unhappy, and any advice you could give I would be so grateful.

Back in 2003 I brought a Barratts house with my partner, it was my first house but his 2nd. We wanted to use the same solicitors to sell his house and buy the new one, but got told by the Barretts sales lady we had to use thier allocated mortgage advisor and solicitors.
The mortgage advisor seemed nice, although I did fairly soon become puzzled, as to where the numbers were tying up. I had convinced myself prior to this meeting that we would not be able to afford the mortgage for a property of that value. But as the meeting went on I expressed my concern and was told that he could edit the figures to 'improve' our salaries. He also stated that if we felt after 5 years that we wanted to change mortgage we could do with no cost to ourselves.
I now know more about our mortgage now and I'm ashamed

We ended up signing up to a 'buy to let' mortgage - even though we live in it ourselves.
It was a self cert mortgage - even though at the time me and my husband were both in full time employment.
It is interest only.

I have since looked around and found that not only can we not afford to get any repayment mortgage with any other company but we cannot afford the interest only mortgages that the other companies offer.
We have been in this house for 8 years and we have no pot of cash stored away to pay the final lump sum off at the end.
And finally to stick the final nail in our coffin. When the interest went up and we found ourselves struggling with other debts as well we got a £20k loan to consolidate debts, this loan was secured on the house. This has trapped us.

I will hold my hands up now and say I was stupid, but any idea of how we can get out of this as I'm desperately unhappy.

Thanks

GMS

Are you sure it was a Buy to Let mortgage? Most Buy to Lets would not be Self Cert as rental income would be the driver not earned income.

Inflating your income is fraud so be careful how you tread. You say you knew you couldn't afford it yet agreed to it anyway.

Securing further loans against the property would indicate you knew what you were doing.

Could you sell and look to rent or buy elsewhere? A property bought in 2003 should be worth more than the original purchase price

Dave_Ham

Is it feasible to rent your house out and to rent a property elsewhere?

Aside from this selling up and repaying any negative equity is the only other option..

Sorry, its not more positive as sure you have already considered these.

Joe_Bloggs

I think the interest only option has become a non starter for those without significant equity. What do you realistically reckon the property is worth. How much do you owe on the mortgage and at what rate.

If you have equity you can sell up and start again.

J_B.
As what Dave Ham and GMS who both beat me to the post Said.

Dave_Ham

Add to this, that you may be able to take a residential mortgage over a longer term to reduce the impact of interest only and current rates.

This is subject to age and whatever your current loan to value is...

skeeps

I will double check when I get home about it being buy to let. I seem to recall reading it was. I don't think I can sell the house and go onto rent as the amount of the secured loan is far to high. But could I rent mine out? and then rent a property for us to live in that would give me the breathing space to then pay off the secured loan, and eventually sell. I'm wandering if that would work. Thanks Dave I will look into that.

We spoke to a financial advisor who told us our only option at the time was to go for the loan GMS. He also suggested we approach Osbusman about the way we were sold our mortgage, as it is not fit for purpose. But I agree, we did sign it. I guess at the time I was thinking, what do I know about buying houses, and that my husband had more of an idea and the broker knew his stuff, so I made the mistake really of keeping quiet.
I have learnt my lesson. I will ask questions until I understand fully.

God, I sound so pathetic, I know I've made some bad choices but I'm now trying to make the right ones.

skeeps

Brought the house for £166k Put down £20k it is now probably worth £155k we pay approx £650 per month and the rate is 5.5% (I'm doing this by memory all the paperwork is at home)

skeeps

Loan amount is now at £18k and I'm 33

GMS

skeeps wrote: »

We spoke to a financial advisor who told us our only option at the time was to go for the loan GMS. He also suggested we approach Osbusman about the way we were sold our mortgage, as it is not fit for purpose.

So rather than look at arranging a fit for purpose remortgage with possible consolidation of debts he put you into a second charge expensive consolidation loan. Did they explore the option of a remortgage? Was the second charge done on a self cert basis too?

skeeps

no didn't explore the remortgage. I think it's because the mortgage company we were with have been taken over by thier sister company, Nationwide and were no longer taking any further loans. I can't remember whether the loan was on self cert, again I need to look back through the paperwork.

Thrugelmir

What's the position with the other house?