Re-mortgage into sole name; negative equity

belfast1

Hi Holly

There is a branch in Belfast so I could make an appointment. I do think face to face is probably best. It's hard to marry the 'I can afford the mortgage on my own due to increased income' with the 'please reduce the monthly payments cos they're killing me'!

Will have to think how to phrase that!

Cheers

belfast1

holly_hobby wrote: »

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

It is possible. Although my salary is pretty high at the moment, I've only been in this job 6 mths so moving elsewhere for a higher salary might be difficult. Obviously the higher you go, the less jobs there are that I would be eligible for. It's a newly opened company I'm in so there should be good promo opportunities here in the next year or 2. The high-paid alternative would be (IT) contracting. I could earn 300-400/day doing that which would obviously be great short-term. However, no security at all and giving up the career prospects in this place, which I think are not to be sniffed at. Would be a tough choice.

holly_hobby

belfast1 wrote: »

Hi Holly

There is a branch in Belfast so I could make an appointment. I do think face to face is probably best. It's hard to marry the 'I can afford the mortgage on my own due to increased income' with the 'please reduce the monthly payments cos they're killing me'!

Will have to think how to phrase that!

Cheers

Well if you extend the term won't that reduce the monthly mge repayments ? (I'm assuming of course that you hold a C&I mge)

Holly

holly_hobby

belfast1 wrote: »

It is possible. Although my salary is pretty high at the moment, I've only been in this job 6 mths so moving elsewhere for a higher salary might be difficult. Obviously the higher you go, the less jobs there are that I would be eligible for. It's a newly opened company I'm in so there should be good promo opportunities here in the next year or 2. The high-paid alternative would be (IT) contracting. I could earn 300-400/day doing that which would obviously be great short-term. However, no security at all and giving up the career prospects in this place, which I think are not to be sniffed at. Would be a tough choice.

I see, there may be some difficult decisions ahead then.

H

belfast1

holly_hobby wrote: »

Well if you extend the term won't that reduce the monthly mge repayments ? (I'm assuming of course that you hold a C&I mge)

Holly

No - interest only

holly_hobby

If this is interest only, what was your original plan to repay the mge at its original and current redemption date, which occurs as you say in just 4.5 yrs ??

If there is no vehicle in place, you're already on IO and want to extend the term for affordability - I would wager that the lender may insist you go onto C&I (given the recent FSA regs re IO) to extend the term and remove Mum.

It is increasingly starting to sound as though there may well be only one solution here.

H

belfast1

holly_hobby wrote: »

If this is interest only, what was your original plan to repay the mge at its original and current redemption date, which occurs as you say in just 4.5 yrs ??

If there is no vehicle in place, you're already on IO and want to extend the term for affordability - I would wager that the lender may insist you go onto C&I (given the recent FSA regs re IO) to extend the term and remove Mum.

It is increasingly starting to sound as though there may well be only one solution here.

H

The original plan was to sell the 2 BTLs in order to reduce this mortgage to a level I could easily take on myself. If they did insist on that, I would go for it. If they can't offer a solution like that at the moment, it's either hope that the situation improves in the next 4.5yrs to where I can re-mortgage myself there / elsewhere; let them repossess it now w/ mum being chased for shortfall; or let them repossess it in 4yrs w/ mum being chased for smaller shortfall. I'm not going to put my mum in that position if I can help it.

I suppose I thought that half the country must be in negative equity at the moment, so mortgage lenders *might* be flexible in some circumstances, as so many people stuck in NE?

Thrugelmir

belfast1 wrote: »

I suppose I thought that half the country must be in negative equity at the moment, so mortgage lenders *might* be flexible in some circumstances, as so many people stuck in NE?

Negative equity is not in itself a problem. Providing an individual can afford the monthly outgoing. Reduce the debt with an element of capital repayment. Then over time the situation corrects. Even if it takes 10 years. As debt only has to be repaid once.

From a mortgage lenders perspective. There's little point in reducing the interest rate. So that the customer can use that money to repay other creditors. Where the interest rate is higher. The customer has a high probability of defaulting at some point. The time spent administering the situation isn't cost effective either.

Whilst the situation may seem bleak. It's only money. Health is priceless. So wiping the slate clean. Will result in less stress and worry. You earn a reasonable income. So you can rent a place for both you and your mother to live. Then move forward from there.

holly_hobby

Woolwich IO residential criteria for new borrowings is max ltv 75% or less, and if using 2nd property(ies) as a repayment vehicle, they will apply a plausabiity check - so they being in neg equity, plus the requirment of removing Mum, may be somewhat a step too far and knock that option out the park (but only by speaking to Woolwich will you know what they will agree to .... they may surprise you !).

I take your point on the NEq situation, but when we're looking at a potential loss between 50k - 100k neg equity held on an interest only mortgage (with repayment vehicles also in neq equity), that requires some really positive thinking in the market, and really presents a mountain to climb in the short term (if you have no significant monies to throw at the os balance).

Under FSA IO regs lenders also have to check at least once during the lifetime of the mge what the repayment vehicle is - so they may request this info shortly (given only 4 yrs left) in any event.

If they Woolwich say no to removing Mum and extending term (affording you time to try and claw back/reduce the current neq equity exposure), then as you say, you may want to just try and tread water for the next 4 yrs, and then deal with the hand you have at the time - of course if you are already struggling to make ends meet then there really is only one solution, which unfortuantely will affect both you and Mum (re the pursuance of any unsatisfied mge balance as a result of forced possession or voluntary surrender).

Speak to Woolwich, also contact Housing Rights support which is relevant to N.I and will give you valued assistance - http://www.housingrights.org.uk/.

Hope this helps

Holly

belfast1

Thanks Thrugelmir

You're right of course re money vs health. A clean slate sounds lovely ... I don't think I can get one tho due to mum being liable for shortfall as it's a joint mortgage.