MF - just not by the way I intended!

piglet74

Hi all

I had decided last year I would start a MF diary here in 2013, as I would have 13 years left to run on my mortgage,

Then in Sept.we decided to sell up, I had just watched my parents go thru a repossession, my husband was getting threatened with a paycut / short week etc. So I was determine not to have to face eviction myself

I had been carrying arrears from before when he was paid off, and it was becoming more and more of a struggle,

Rung our lender and we were talked thru the "assisted voluntary sale" process

Its not for everyone but it was the answer to all our prayers, the lender (after a bit of a wait for approval of getting onto the scheme) pays the estate agent and solicitor fees, and writes off 90% of any shortfall,

In 3 months from making the initial call to say we were having problems paying, we got a letter to say the house was at the sale agreed stage

We are now renting for 1/3rd the price of what our mortgage was, I know its not ideal, and a lot of people think rent money is dead money, but how I am looking at it now is if rent money is dead money, so is electric money, and phone bill money and heating bill money must then be dead money, as u have to pay for all that, but don't really have anything to show for it, its this thought that's making it all a bit easier,

We have one daughter, and all she talks about is emigrating, going to USA an Oz etc. We just thought, "why are we busting our a££es working, to pay for an overpriced mortgage, for a house she is never gonna wanna live in again", we were livng hand to mouth for a while, cut back on the landline, the sky tv, the shopping etc. We didn't feel like we had any quality of life to show for the amount of hard work we were doing.

Everyone is different, but when I seen the pain of repossession, and how you can bounce back, I just thought, there has got to be more to life than paying a mortgage on a house that doesn't even feel like home, my parents house was home to me, there was 4 generations of us thru that house, so when it went, I didn't really care about hanging onto mine, my wish was to move back to theirs at some stage,

So, all things considered, we feel like we done the right thing, its not how I imagined being MF would come around for me, but I feel like a great weight has been lift off my chest, I can breath again, and I have a few extra ££ in my pocket each month

Good luck to you all on your MF journey

Piggy x

gallygirl

Really glad to hear it's all worked out for you . That sounds like a good scheme.

Well done on the weight loss also :T.

piglet74

Thank you

Yes, I think it is a great scheme, it might not be the ideal solution for everyone, but it felt right for me, and I spoke with a financial advisor who felt the same

From the lenders point of view, they get more for your house, it sells in better condition (as you live in it until its sold it doesn't fall into disrepair) it sells for a better price as its not a repossession,

From the sellers point of view, you have somewhere to live until u complete the sale on a date of your choice, your home is not repossessed, you only have to pay 10% of the shortfall, and you get time to pay it and you credit file is marked "mortgage satisfied"

I have gone from paying over £1300 per month to own my own house (and it was an ex council, 3 bedroom house, not a mansion!) To paying £400 rent for a bigger house

I feel like owning my own home was not the B all and end all for me, and that there is no shame in having to go back to renting for me

I am happier, better off, no longer dreading the postman, the phone ringing etc

I feel like we are now living a life again

Secret_Saving_Squirrel

Good for you. Sounds like a sensible decision. I have never agreed with that cliche about rent being dead money. What really is dead money is the interest we pay to the financial institutions and anything that avoids that is great.

piglet74

Totally agree SSS!!

I had a secured loan on the property, 5 years now in March, and the overall balance has hardly decreased at all!

All in the past now for us, onwards and upwards!

Lois_E

piglet

It may not feel like it at the moment, but what you have done absolutely fits in with the ethos of this board. You have taken a good hard look at your housing finance, decided what would be best for you, made a plan and followed it through without waiting for things to get to a crisis and all your options to be taken away. You have not let your life be ruined by the compulsion to keep up with the Joneses, and you have arrived at a place of peace and contentment in your life. Well done you.

Squirrel is right - rent is no more dead money than mortgage interest, because they are both money that you won't see again that you pay in order to have somewhere to live. So if your rent is now less than your mortgage interest was, then that's better for you. (Of course, different considerations apply when house prices are shooting up at a rate of knots, but they're not, and I don't think they will for ages.) You now have £900 a month extra money to use, and if it's not all needed to counteract the paycut etc, then you'll be able to save, and have the bank pay you compound interest instead of the other way round.

I've always thought the repossession process was mind-bogglingly silly, almost as though it had been designed to minimise the money that the borrower and lender end up with. I'm so glad you were able to get onto the scheme you describe - much more satisfactory for all concerned.

Good luck with your onwards and upwards journey.

piglet74

Thanks Lois

That's really what our intention was, to think of all our options and to pick what was best for is, before it was too late and the only option was getting repossessed!

it had come to the stage that struggling was no longer an option, must of the other home owners on the estate had bought their houses for 4 figure sums, there was only an unfortunate few who had 6 figure mortgages

The mortgage and secured loan together on the house totalled 116k, house was last valued at 170k, (never should have happed, its a very basic ex councli house built in 1950s!) House revalued and sold for 60k, shortfall owed by us is 5.6k, so we will still be making a good saving between rent and paying this off

There is an advert currently running on TV for Centreparcs, and it says at the start something along the lines of , "what do you want your children to inherit from you, a house, a clock,.. Or something more important...."

And that's what we thought, if we had a few extra £ now, to spend on our daughter now, isn't that better than giving her an (at least!) 80 year old house, that she has no interest in living in,

I know I did the best thing, made the best choice, but I do find myself justifying it to myself over and over sometimes.

Thanks for your kinds comments lois

Lois_E

Your house was valued at 170k and dropped in value to 60k? :eek:

That's a fall of nearly 65%. I'm not surprised you got into trouble, and not your fault at all.

Getting onto that scheme and getting 90% of the shortfall wiped off is fantastic. There's nothing positive about throwing good money after bad if you're in that kind of negative equity and you're offered a way out.

piglet74

It was all well and good saying "the secured loan will be paid off in 5years"... Or "the mortgage will b paid off in 13yrs".. What quality of life would we have over the next 5 years, next to none.. Not a penny to our names, panic stations if something happened the car, or when we needed heating oil,

I am happier than I have been in ages!!

piglet74

The lenders solicitor called me yesterday to say buyer is ready to complete, wanted to complete in 7 days, but hubby is working out of the country so we agreed on 21 days to give us time to clear the attic and shed (house is cleared)

So I suppose my next thread will be on paying off the shortfall :-)

My financial advisor has told me to pay it off at £10 a month, (says they have to accept anything from £5 up) tho I could pay more, so might do to get it cleared quicker (its going to be around the £5.6k mark) so at a tenner a month it would never be paid off!!

piglet74

Just a quick update, I have to leave the keys with the EA tomorrow,

Does anyone else know if there is anything else I need to leave?

I have the house keys and the post box key in an envelope, anything else needed?

I am guessing at some stage next week the lender will be in touch re the shortfall and how I am going to pay it back, so far they haven't been in touch so much but I am guessing that will all change once the money is transferred to them

They do not have my new address, only my phone number so I will just have to await their call now.