Re-mortgage into sole name; negative equity

belfast1

Hi there
I'm hoping someone can advise as to my best option regarding my mortgage.

Current mortgage of 265k in joint names - me & my mum
Was with Standard Life, since been taken over by Woolwich
Has been on high SVR for past few years (5.34 when SL; now 4.99)
Monthly payments 1092.

Bought house in 2006 for 236k (90% mortgage = 212k), when my salary was approx 26k. Mum had a good job at the time and helped me get the mortgage.
Consolidated some credit card debt which brought mortgage to 265k as house was valued at 300k.
I have 2 BTLs and the plan was to sell these in 2008 to reduce mortgage on this house. When housing market crashed, obviously so did this plan!

So I have paid this IO mortgage myself for the past 6.5 yrs, as well as the 2 BTLs, and all maintenance for all 3. I haven't missed any payments.

The amount is crippling tho I am a single parent of a teenage boy and can't afford holidays / clothes / my own car - anything really. Because I have never previously earned enough to cover my costs, I have since run up more unsecured debt.

My salary is now 43k plus 15% bonus. I have 14k on credit cards and a loan of 22k (not sure how much is outstanding - have been paying 500/mth for over a yr now).

The problem is 2-fold.
a) I really need to lower the monthly payments
b) The mortgage term is 11yrs due to my mum's age. So it will end in 4.5yrs. It is currently anywhere from 50 - 100k negative equity, so in 4.5 yrs will still be in some NE.

I want to re-mortgage by myself / transfer equity. On paper, the salary multiples would do it acc to woolwich website calculator. But what about the negative equity and probably affordability criteria?
If I do nothing, the house will be re-possessed in 4.5yrs - lose / lose for the Woolwich and me. So will they negotiate so as to have a win / win and avoid re-possession?
I have invested so much time/energy/money/work in this pile of bricks, I really don't want to lose it.

Has anyone else been in this situation and found a solution?

All advice much appreciated

kidmugsy

Are the BTLs worth more than the debt on them or are they in negative equity too?

belfast1

They're in NE too.
BTL 1 mortgage 115k, worth approx 80k
BTL 2 mortgage 135k, worth approx 100k

Thankfully they're on Bank of Ireland SVR which is currently 2.75% so the rent covers them. It's the inevitable maintenance costs in those which pose the main problem.

TrickyDicky101

You have no chance of remortgaging. Does your mother have any other assets (eg home in which she lives) as this will be at risk if the mortgage cannot be settled?

maninthestreet

You consolidated CC debts of £29K into the mortgage, but still have unsecured debts of £36K??

missslbell

There are loads of avenues which will help you more than a public internet forum

https://forums.moneysavingexpert.com/discussion/4228011

qwert_yuiop

belfast1 wrote: »

Hi there
I'm hoping someone can advise as to my best option regarding my mortgage.

Current mortgage of 265k in joint names - me & my mum
Was with Standard Life, since been taken over by Woolwich
Has been on high SVR for past few years (5.34 when SL; now 4.99)
Monthly payments 1092.

Bought house in 2006 for 236k (90% mortgage = 212k), when my salary was approx 26k. Mum had a good job at the time and helped me get the mortgage.
Consolidated some credit card debt which brought mortgage to 265k as house was valued at 300k.
I have 2 BTLs and the plan was to sell these in 2008 to reduce mortgage on this house. When housing market crashed, obviously so did this plan!

So I have paid this IO mortgage myself for the past 6.5 yrs, as well as the 2 BTLs, and all maintenance for all 3. I haven't missed any payments.

The amount is crippling tho I am a single parent of a teenage boy and can't afford holidays / clothes / my own car - anything really. Because I have never previously earned enough to cover my costs, I have since run up more unsecured debt.

My salary is now 43k plus 15% bonus. I have 14k on credit cards and a loan of 22k (not sure how much is outstanding - have been paying 500/mth for over a yr now).

The problem is 2-fold.
a) I really need to lower the monthly payments
b) The mortgage term is 11yrs due to my mum's age. So it will end in 4.5yrs. It is currently anywhere from 50 - 100k negative equity, so in 4.5 yrs will still be in some NE.

I want to re-mortgage by myself / transfer equity. On paper, the salary multiples would do it acc to woolwich website calculator. But what about the negative equity and probably affordability criteria?
If I do nothing, the house will be re-possessed in 4.5yrs - lose / lose for the Woolwich and me. So will they negotiate so as to have a win / win and avoid re-possession?
I have invested so much time/energy/money/work in this pile of bricks, I really don't want to lose it.

Has anyone else been in this situation and found a solution?

All advice much appreciated

Oh dear. Move to one of your rented properties and rent out your main house if you could get more rent for it than you're getting already?
Take in lodgers to your own house? My neighbour is doing this with some success.
Keep on paying and cut up those cards.

holly_hobby

Cripes ... you're struggling here.

Main home

It will be impossible to remortgage to a lower rate elsewhere due to the neg equity, which may have otherwise been a solution in either removing Mum from mge (to extend term), or to seek a mge lender with an extended maximum age (of which there are 1 or 2).

As your BTLs are also in neg equity, there goes the suggestion to sell one or both and reduce borrowings on your primary mge.

THe only solution, is to make an appointment with your lender and have a chat with them - typically where there is a neg equity situ lenders don't like to release any mortgagors, however I have seen situations ( indeed there was one on the forum very recently), where the lender did release one of the parties, despite there being neq equity - now obv its very much a suck it and see exercise, but nothing ventured and all that (especially as discussed below, if you elect to rent it out and its ully self sufficient).

If they refuse to release Mum, there are obv serious issues with a term of just 4.5 yrs remaining on the mge,and with such a huge amount of neq equity (are you sure this is right 50k - 100k ?!), its doubtful this will have been negated within the given time to permit a refinancing of the property in your sole name.

As suggested above, what would be the acheiveable rental income if you let your home out (under consent to let), and moved into one of your rented properties (duly advising the BTL lender of the change of residetial basis of course).

Would that make the figs work - and not only reduce your personal monthly commitments, but would it generate surplus profit that could be thrown at the mge to reduce the neg equity situ ? (Albeit whether in 4 yrs it will have cancelled out the neg equity situ may be an ambitious thought, but with a rise in the market, who knows ?!)

Primarily my first move would be to talk to your lender, given the issues to hand see if they can assist in formatting a solution to a term extension, and offer you a revised product (lower rate) from their current portfolio (subject to any ERPs on your current deal of course).

Hope this helps

Holly

TrickyDicky101

holly_hobby wrote: »

THe only solution, is to make an appointment with your lender and have a chat with them - typically where there is a neg equity situ lenders don't like to release any mortgagors, however I have seen situations ( indeed there was one on the forum very recently), where the lender did release one of the parties, despite there being neq equity - now obv its very much a suck it and see exercise, but nothing ventured and all that (especially as discussed below, if you elect to rent it out and its ully self sufficient).

If the mother does have other assets though she wouldn't be released.

loubel

What are mum's finances like? Have you discussed the negative equity with her?

As she's liable for the mortgage too can she help contribute towards paying down the secured debt?

Definitely seek proper help with your unsecured debts and overspending though as well.

Thrugelmir

I fear that house prices are unlikely to come to your rescue. By rising in the short term.Have you considered bankruptcy? As looks like your heading for the cliff edge. Having gambled and lost.

Suggest you ring National Debt Line for advice.

http://www.nationaldebtline.co.uk/england_wales/

Best to control the situation that you have the matter taken out of your hands.