Remortgage Problem. Self cert/Kensington.

Guy_Montag

Hi horace & van22663,

as you may have seen by the thread subtitle - "I have some sympathy this time". I have some sympathy with the OP, the £7k redemption fee is awful, & as we now find out it was her circumstances changing that have put her in this situation.

On t'other hand, I have made, what I feel are, some reasonable suggestions for how to deal with the situation & then added my little op-ed piece as the last sentence (which the OP is welcome to ignore, it is just an opinion after all).

I have not said anything on either board which one could find hypocritical.

The reason I posted on GHPC, is that MSE is a gold-mine of anecdotal evidence about the state of the housing market - sort of people buying, selling & in difficulties (& why). Some people are unlucky & some people are complete muppets who deserve everything they get - the OP, I believe, is in the former category.

I hope this clarifies the situation.

ps. Gay_Montag how I laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & laughed & then I cried, just a little.

homer_j_3

van22663 wrote: »

Many thanks to all of you for your advice. I have only been apart from kids dad for 3 years, so already had the house otherwise I would not have bought . It would not really help to sell the house as there is very little equity in it and I would be paying £600 upwards to rent. Also, as you can appreciate, I do not want to disrupt my childrens life anymore than I have to.

Will certainly be looking at working more hours. If anyone comes up with any amazing fixed rate deals on a self cert basis....please let me know. Many thanks once again.

Its better to sell the house now and have some equity than to be kicked out and have no equity. By paying £600 on rent, it will mean that you pay 600 a month for at least 6 months which will give you some security like a fixed rate. Paying Interest Only is very similar to renting - yes you do not get the increase in house price, but you do not get the increase in interest rates or pains of having lenders chasing you and ringing you trying to get money.

Take what equity, invest it and get yourself straight. Whilst you may see it as disruption, I think in the long run you will be better off. Houses are only worth owning if you can afford to pay for them, if you cant then they can be the worst thing to have. Kensington will not waste time in taking your property and will continue to add interest, fees, legal costs etc until they take every penny from you.

tomstickland

I share a similar opinion with regards to financial aspects of it. Adding more fees to an interest only morgage is not a good long term sustainable plan.
I think it would be wise to consider the options for selling or downsizing. Then again, I can see the problem with disruption to the home life.

homer_j_3

it should not be a huge disruption to homelife though - its only like moving house.

Stress caused by being in financial difficulty, not being able to afford to give your children the things that they want and having to explain why there is a man changing the locks will be more harmful to family life - would it not?

van22663

Thanks again everyone. I have already downsized last year, but I made the mistake of having a discounted variable rate for 1 year then tied in for 2 further years, which is where I am now. In hindsight, i should have taken a fixed rate but at the time it was more expensive.

I have only been in this house for 12 months and my payments have gone from £475 a month to £585, then next month to £754 when I come off the discounted rate. I will NEVER have a discounted rate again. I had to move house last year because Kensington will not remortgage on the same property, so back to square one.

Anyway, im off to reclaim all my MEAFS and bank charges now...

dwsjarcmcd

I don't suppose your children's father could help? I know that may not be possible for many, many reasons but I do know that as a divorced dad, I would want to help my daughter (and her mother for that matter)in such circumstances, even if it was for a short period of time.

David

tomstickland

A discounted rate is OK as long as you check all the small print to make sure you won't be stung at a later date.

jamesd

van22663, the early redemption charge means you're pretty much stuck with Kensington until the mortgage ends. You're correct to expect that the mortgage payments are likely to be over 800 by the end of the year. It's very likely that they will be over 800 in June or July. They will probably start falling again next year.

To improve your situation as far as possible you need to try to keep up and also arrange to have a perfect repayment record at the end of the tie in period. One option you might consider is unsecured (not secured on your home!) borrowing for any shortfall you expect for the payments in the final 12 months of the deal. Perhaps a personal loan over 3 or 5 years just for the amount you can't afford, probably no more than 1,000 or 2,000.

Once you have that perfect repayment record for 12 months you'll be a much more attractive prospect for other lenders, even with the payments on the loan.

The loan approach is far cheaper than a remortgage with the huge costs for that.

Better to do it without the loan of course but that may not be realistic. Basically you just have to survive for two more years with Kensington and end up with as near to a perfect record as possible so the better lenders will consider you.

Good luck with what are likely to be a hard couple of years!

van22663

I know it is a better option to stay with kensington, but what if the rates do not fall, I am just worried that they will keep on rising and then I will lose the house.
The loan is a good idea, but my credit rating is not brilliant and I struggle to get any sort of credit really.
With regard to the kids Dad, if he has the money, he pays it but as he is self employed, there is not much I can do about it if he doesnt have work.
I am almost resigned to accepting the fixed rate offer albeit with 10k added on my mortage but I feel it may the better option at this time.

jamesd

In this case, borrowing even as much as 5000 at 50% interest rate for 5 years is a better idea than remortgaging. Even such a high interest rate is far cheaper than the cost of leaving the current mortgage until the end of the early repayment period.

The same applies to their dad if he has an easier credit situation.

The idea here is just to get you set up with a decent rate in two years, which really needs a good payment record on the mortgage.