MOrtgage repayments too high but cant change due to arrears

Tubnut

My mortgage repayments just hit £840 pcm and i really need to change to another provider but i've been 1 month behind on payments for about 10 months now so noone will take me on. This means it's just getting me further behind all the time and i also have council tax arrears of about £700 to pay off. I'm not on a bad wage; about £400 a week takehome but i'm so far behind that it makes no difference, i dont see any of it. If i could just change my mortgage i might survive. I went to see a free mortgage advisor but to no avail. My house is currently on the market and i don't want another, i'm happy to rent to be honest, but if it doesn't sell soon i think i may have an emotional breakdown. I do have a few other financial commitments:

£400 gas and electric bill
£157 personal loan payment monthly
£77 council tax a month
£200 water bill
£700 mortgage arrears

And if it weren't bad enough, my mortgage is still in mine and my ex partners name because i cant afford to have her name taken off through solicitors.
Not really sure where to go next, any advice would be very appreciated.

christineperseus

Speak to your lender and ask them to increase the term of your loan - that will reduce your current payments.
On the downside - you'll be paying a lot more in the longer term, but if it helps in the short term untill you can persuade another lender to take you on...

AndrewSmith

Tubnut wrote: »

My mortgage repayments just hit £840 pcm and i really need to change to another provider but i've been 1 month behind on payments for about 10 months now so noone will take me on. This means it's just getting me further behind all the time and i also have council tax arrears of about £700 to pay off. I'm not on a bad wage; about £400 a week takehome but i'm so far behind that it makes no difference, i dont see any of it. If i could just change my mortgage i might survive. I went to see a free mortgage advisor but to no avail. My house is currently on the market and i don't want another, i'm happy to rent to be honest, but if it doesn't sell soon i think i may have an emotional breakdown. I do have a few other financial commitments:

£400 gas and electric bill
£157 personal loan payment monthly
£77 council tax a month
£200 water bill
£700 mortgage arrears

And if it weren't bad enough, my mortgage is still in mine and my ex partners name because i cant afford to have her name taken off through solicitors.
Not really sure where to go next, any advice would be very appreciated.

Ok,

Call your mortgage company and explain to them that you are having difficulties. You also need to find out what type of mortgage you currently have.

The questions to ask the mortgage company are:

1) Can they capitalise the arrears for you? (Add it to the outstanding mortgage amount)

2) If on a repayment mortgage can they either extend the term of the mortgage for you or switch it to an interest only basis.

Extending the term is a good solution however as you are selling the property you may wish to switch to interest only which could reduce the payments in the short term further.

The most important thing is to speak to your lender. They will want to sort this out with you as much as you do.

mhay_3

there will always be some lender willing to take you, whether this is generally a good thing, who knows.

if things are getting to the point where it is really that bad, i would suggest remortgaging, capping your other debts onto the mortgage (although more interest would be payable), and even adding in the solicitors fee to take your ex partner off. this would allow you to concentrate on one monthly debt to repay instead of several

AndrewSmith

But this is a situation where there will most likely be a loading on interest with a new lender due to the arrears and, to get a rate not too high, an incentive product carrying ERP's would have to be taken, along with exit charges from the current lender and arrangement fees for the new mortgage.

When the poster has stated that he is currently selling the property and merely needs to reduce outgoings until his time how could a re-mortgage and it's associated costs be justified as the best advice?

MortgageMamma

I totally agree Andrew, was thinking along the same lines myself and as usual your advice is spot on.

If only all brokers on this site knew what they were doing.

toonfish

a remortgage would be expensive and pointless as already stated. Interest only or extended term is the only sensible option, and perhaps negotiating reduced payments on any other credit temporarily

Scott

I'd agree, moving to another lender is definitely not the best course of action here.

As has been said, interest only will reduce your payments by a large degree, as will extending your term. The fee to do this is usually quite low (around £50).

Also, once you have the arrears under control, after a few months your lender may be willing to put you on to a new product. You'd be looking for one without an early repayment charge in this case, but that would lower your payments further should the property prove extremely difficult to sell.

homer_j_3

He may want to think about approaching all his other commitments for some form of payment plan if not already done.

JoeK_3

Tubnut wrote: »

My house is currently on the market and i don't want another, i'm happy to rent to be honest, but if it doesn't sell soon i think i may have an emotional breakdown. I do have a few other financial commitments:

£400 gas and electric bill
£157 personal loan payment monthly
£77 council tax a month
£200 water bill
£700 mortgage arrears

And if it weren't bad enough, my mortgage is still in mine and my ex partners name because i cant afford to have her name taken off through solicitors.
Not really sure where to go next, any advice would be very appreciated.

Tubnut, you really need to take professional advice to help you both financially and emotionally. You have received some excellent advice here from a number of people and you must decide whether you are selling due to financial pressures or a desire to move into rented accommodation.

Please take immediate action by contacting your existing lender and following the steps outlined by AndrewSmith but further than that please make an appointment to see a debt counsellor at the Citizens Advice Bureau to help with the other debts.

Reading between the lines it may help to make a visit to your GP and ask him for help in dealing with your present pressures.

Don't make a big issue of having to take your previous partner off the mortgage as it's not such a big issue at the moment and it can be dealt with at a more convenient time.

Please take note

JoeK

Tom_Saunders

this is your way out of this mess, unless you already are.

If you are selling the house then repyments don't really matter, however you may find if you go interest only you can keep the house, do it for a couple of years and try and get yourself together, only sell if you really have to, with a bad credit rating you may not get another chance to buy at an affordable rate.

Hope this help,I'm not a mortgage adviser but this is common sense surely.