Stuck in a flat we need to get away from!!

sussexmike

Hello all,

Myself and my wife are desperate for some advise on a huge problem in our lives, so please bear with me as its a lot to take in.
we took out a mortgage as first time buyers 7 years ago with poxy northern rock/nram, we had zero experience in mortgages and received bad advice as its turned out!! we had no deposit and wanted to buy a flat we had seen for £89,500, the broker said we could have a mortgage up to £110,000 if we wanted some money over the price of the property to cover any debts or furnishings we wished to purchase for our new flat, i was also badly in need of a new car due to a new job so we took a nr mortgage of £100,000. we did not realise at the time that 80% of that was mortgage and 20% loan. now the mortgage was interest only and we thought that would be ok for a cpl of years and then switch to repayment, however due to my wife being ill on and off quite badly and over the years problems with finances and work we have been unable to pay anything other than interest. hence with a cpl of payment holidays the total we now owe is around £102,000!!

The problem is the flat is worth approx £80,000 to £85,000 so we are in negative equity and we are desperate to move, its a one bed flat, we have had problems keeping up with the maintenance company payments partly due to a dispute over work they have failed to do and now owe them £2700 that we simply dont have and can,t get. we also have other mounting debts like a credit card and a loan that has got out of control. we have never missed a payment on our mortgage but regardless of that nram are unwilling to help in any way and we are stuck for what to do.

we have tried to save but its an impossible task for us in our position to knock anything substantial off the negative equity.

we NEED to leave this flat for our own health, my wife is pregnant and we have no room as its a tiny one bed flat, the flat has rising damp, untreated, hence dispute with maintenance company and we are tearing our hair out over what the hell we are going to do, the neighbours are a nightmare and due to my wifes health its causing problems with our relationship, she is in tears everytime another letter comes through the door and we have reached breaking point. we need to get out of here for our own good and have considered bankruptcy and just giving the keys back and then going to rent somewhere but the thought of the shortfall we could end up with hanging over us is scaring me to bits.

i,d be willing to take out a bigger mortgage and buy a 2 bed property if there are any lenders out there that would help add the negative equity to new mortgage but i don,t know where to turn, and as for selling this place i cant see that being easy or fast! we have no savings and no hope of getting any loan of the size we would need.

bottom line is we have simply got to get out of this property and as soon as we possibly can with the least future impact as possible, the thought of living here for even another year makes me feel sick.

can anyone whos had the same kind of problems or experience please give us some helpful advice we are really struggling for answers and each day the thought of jumping on a plane and never coming back is getting more and more tempting

help we are in bits and need a way out

pjcox2005

I think you'll get a range of answers so you may need thick skin for this one. I haven't been in this situation but thoughts are:

- Significant negative equity and no assets means bankrupcy should be explored.

- The suggestion you are willing to take on a larger mortgage is unlikely to happen, nor does it seem sensible if you can only make interest payments on the current one i.e. no capital repayments currently/no savings.

- Only other option is can you rent out and move out to another property so you are at least out of the flat. Presume finances won't allow a significant change in property size but may be better area etc

- Have you contacted CAB for example to see if you could be on council waiting lists given a child on the way. I'm guessing unlikely if you already have a place but they may know better.

sussexmike

thanks for the reply, i have thought about renting it out but i dont think nram will allow it and also due to our financial state what happens if there is a problem with the property that i cant afford to repair when i have a tenant living there? no savings for emergency repairs etc
plus if the tenant leaves and i cant get a new tenant straight away i will have a mortgage and a rental where we have moved to pay for and be in a right old mess!

cant work two jobs either i already work 60+ hour weeks so exta money is a struggle to find

sussexmike

being a home owner i did not think i would qualify for a council house if i got repossesed or threw the towel in on mortgage

dandelionclock30

I think you need to make an appointment with the CAB and talk through all your debt problems with them. Hopefully they will be able to help you find a way forward.Thats what I would do as a starting point.

sussexmike

my wife did have a brief chat with the CAB and we can got back to them regarding other smaller debts we have as they are easier to manage with some kind of debt relief plan or a payment plan, and i half expect we could come up with a plan to pay off the negative equity if we had a ten year plan we could stick to, we cant wait that long though tbh, even if i could hang on and scrimp and save for half that time i know my wife won,t i will end up losing her and be even worse with a mortgage i will never be able to pay off even the interest by myself.

if we did leave and end up with say a 20k shortfall what would our options be then, as surely they would not expect me to pay that in one go?? if they wanted it monthly what kind of monthly payments do you think they would want me to pay or accept from us??

nuttyp

Definatley get further advise from the CAB or one of the debt charities on the bankruptcy page.

Having experienced going BR, it is definatley not the easy option that some people are misguided into thinking. The implications last for a very long period time after.

Have you added your name to the council waiting list or the Housing association?

2sides2everystory

My commiserations.

This exact thing happened to a young member of my extended family.

They are now just beginning to see the light at the end of the bankruptcy route (not just the one year discharge period either) and only after a few lucky breaks with regard to availability of local authority low cost housing.

Northern Rock directors and their introducing agents should have been rotting on posts on London Bridge years ago.

I had a 100% mortgage once. My employer offered it to me without me asking because it suited their career and mobility plans for me. So we could say they had a bit more of a vested interest in ensuring it was a good idea rather than a vested interest in flogging mortgages to any sucker ready to sign their life away thinking they were being given a favour.

All those Northern Rock 100%+ mortgages of the mid noughties were total mis-sales.

desert_rose

Is there a possibility of moving in temporarily with family? It seems to me that if that option exists, then short term, it might just be your best move initially at least.

Secondly, I would be very tempted to let the building society repossess the property. Yes, it means your credit rating will be shot for a while, but the health of you and your wife has to come first and especially, the health of your little one. If its difficult now, how hard is it going to get once you have a new baby to care for?

All the best to you. Its hard I know, but things do get easier once you get some clarity on a situation. For me, health would be number one. The rest can be sorted out and your wife sounds as if she's heading towards a tipping point sadly.

Thrugelmir

sussexmike wrote: »

if we did leave and end up with say a 20k shortfall what would our options be then, as surely they would not expect me to pay that in one go?? if they wanted it monthly what kind of monthly payments do you think they would want me to pay or accept from us??

Take proper advice. There's no easy answers to your predicament.

grey_lady

Perhaps you should read some of the bankruptcy threads, anyway if you can't afford to pay it all in one go, then they can't make you - if your paying it off say monthly then you have to be able to live e.g pay rent, bills, food, clothes, travel etc and whatevers left can go towards it.

Are you able to raise a deposit privately? or talk to a HA?