Negative equity and interest only mortgage.

Blobbymedic

Hi,
We have an interest only mortgage with approximately seven years to run. Our house has been on the market before and not had much interest due to the price we had to ask. It is now worth approx £25k less than we owe the mortgage company. I am self employed but looking for employed work, my partner is in full time work. We are now start to get a bit panicky. Is there anywhere we can turn to for help? Cheers

xylophone

You need to get saving app £3571 per annum, app £297 a month.
You could use your cash ISA allowance/regular saving account.
http://forums.moneysavingexpert.com/showthread.php?t=4165729

Wywth

Blobbymedic wrote: »

Hi,
We have an interest only mortgage with approximately seven years to run. Our house has been on the market before and not had much interest due to the price we had to ask. It is now worth approx £25k less than we owe the mortgage company. I am self employed but looking for employed work, my partner is in full time work. We are now start to get a bit panicky. Is there anywhere we can turn to for help? Cheers

The value of the property today is irrelevant.

If you have an interest only mortgage, you will need to repay the full amount of the original amount borrowed in about 7 years time.
When you took out the mortgage, were you not advised to take out some form of savings or investment plan (e.g. endowment) to repay the amount originally borrowed?
If you haven't done this for the last 18 years (or have cashed it in) then you are in serious trouble, I'm afraid. You need to pay back the full amount borrowed in about 7 years! :eek:

I'd suggest you start by speaking to the lender immediately.

More useful information can be found on the Citizens Advice self-help website www.adviceguide.org.uk or by calling the Citizens Advice Consumer Helpline (0845 4040506) or contacting your local CAB office.

CAB_National_Representative

Blobbymedic wrote: »

Hi,
We have an interest only mortgage with approximately seven years to run. Our house has been on the market before and not had much interest due to the price we had to ask. It is now worth approx £25k less than we owe the mortgage company. I am self employed but looking for employed work, my partner is in full time work. We are now start to get a bit panicky. Is there anywhere we can turn to for help? Cheers

Hi Blobbymedic - at the moment CAB Representatives are only answering certain topics on the MSE forum and we’re afraid your question is not within those areas - and is probably not something that we can advise on. You may prefer to post it again on another board (see the MSE forum index) - and in particular the one on Mortgages & Endowments.

We would recommend getting advice from an independent financial adviser, who will look at all the options and take everything properly into account. They should also be fully qualified to advise on particular financial products and services.

We hope this helps.

jamesd

Your first challenge is to get out of negative equity so you can remortgage to a longer term, preferably on a repayment deal this time.