Re-mortgage into sole name; negative equity

holly_hobby

TrickyDicky101 wrote: »

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

I hear you, but this depends possibly on Mums assets and wholly on the lenders view and assessment of the situ.

And that won't be known for certain until the OP discusses the matter with the lender, as they say assumption is the mother of all ****ups - lets see what help the lender may offer (if any) and take it from there.

Failing that, considering a BO may be a solution given the level of issues involved ..... obviously the OP must acknowledge that if they successfully go this route then their credit record and qualification for mortgages and finance will be affected for a significantly long time (well in excess of the 1 yr BO period, and 6 yr CRA recording) - Mum will also be pursued for any shortfall re any joint mortgages held which close in a neg equity situ (which is pursuable for a period of upto 12 yrs).

Hope this helps

Holly

belfast1

TrickyDicky101 wrote: »

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?

Yes - she has a house which she rents out. Mortgage of 155k. Current value approx 200k. She lives with me now.

belfast1

maninthestreet wrote: »

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

Yes - that's correct

belfast1

missslbell wrote: »

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

Thanks - I have been to CAB and spoken to an insolvency practitioner there. They're recommending either IVA or bankruptcy, but I want to avoid that if I can. If my mum wasn't on the mortgage, I send the keys back tomorrow and go BR. But I don't want her to be liable for the shortfall. I also, would prefer to keep the house really - it would just feel like such a waste of the past 10yrs to lose the house(s). Trying to find the least worst option

holly_hobby

belfast1 wrote: »

Yes - she has a house which she rents out. Mortgage of 155k. Current value approx 200k. She lives with me now.

If the joint property with Mum is sold with neg equity (which can't be wholly settled on redemption), it is likely that the lender will seek at least a charging order on Mums property that is currently let.

Holly

belfast1

holly_hobby wrote: »

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

Thanks Holly

I know there's no chance of re-mortgaging elsewhere so current lender is only option. I'm just not sure if they'll be pragmatic / open to negotiation based on reality OR stick to the bureaucratic script where we all lose?

I couldn't rent my house out I'm afraid. Even if I replaced the kitchen which is falling apart, and insulated it so it's not like a freezer for the winter, the rent would be max 700/mth so really no gain there.

I could rent out the spare room whilst my mum is working abroad for the next few months but other than that, I don't have many income-increasing options.

I do get an annual bonus which I could throw at the debt and a year from now, it'd be down to a more cope-able level.

But a term extension, and a revised product (lower rate) from their current portfolio is EXACTLY what I want. Do you think best strategy is to talk to an advisor in person at a branch? Or go thru broker / write to head office / phonecall?

Thanks for your input

belfast1

loubel wrote: »

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.

Hi
Hmm..her finances aren't great (it's hereditary!)
Her credit score would be fine I think but she's 64 and a self-employed consultant with an ad-hoc work / earning pattern. She doesn't work much. She is liable, yes, but she wouldn't be able to contribute much. She was more of a guarantor / just trying to help. Oh how I wish she wasn't so helpful now!
I am in the process of getting said proper help with CCs (moved to 0%) and loan

belfast1

Thrugelmir wrote: »

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.

Agreed I have / am considering this. The *main* things preventing me from doing that are:

1) Impact on mum - don't want her assets to be put at risk
2) I work in financial services so could lose my job / jeopardise future career prospects

holly_hobby

Hi B.

I would suggest, if at all possible, having a one to one in branch.

Take with you details of how removing Mum and extending term, will ultimately assist all parties (assuming your sole income is sufficient).

Explain what your plans are regarding reducing the negative equity, and how the rearranged finances you are requesting would assist that.

If they refuse, ask what their ideas/proposals are to assist .... they may present an alternative viable solution.

Hope this helps

Holly

holly_hobby

Any BO or CCJ will affect you if your role is within financial management - however there may well not be any other alternative, given the figs involved and if you are unable to maintain your commitments longterm (or until/if the markets recover ) on your current income.

Would moving to an altenative position with more income, help alleviate issues and avoid any BO/CCJ given the impact such a judgement would have on your career ?

Hope this helps

Holly