What is the best way to do this or is it impossible?

gibboking

Hi
Sometime ago OH and I got into difficulties. We had remortgaged paid off ccs etc, for hubby to be made redundant a month later.
Ended up in big debt as we foolishly used clean credit cards to live on as we had no other real option.
Anyway debts are now in a DMP with CCCS. £21k, paying £232pm, aprx 7 years til cleared.
Our house was valued 6 months ago at £145k and to settle the mortgage would cost us £144k.
We are on a high interest mortgage with igroup as we remortgaged again to try and clear some debts (stupid i know).Payments £810pm for 3 years fixed. Then go up to £920 and the term is 35 years.
If we were to sell our house and didn't have enough to clear mortgage what happens about paying the excess?
How likely is it we could get another mortgage whilst on a DMP? combined earnings of around £32k a year.

Also we have an oppourtunity to move into in-laws, take over their mortgage and build an extension to accomodate us all.
Their house was valued at around £125k a year ago but now has planning permission for a 2 storey extension.
they have around £45k left on their mortgage and pay £300pm.
Would it be possible once we have sold our house to have our names put on their mortgage and then remortgage for a further 60k to pay for the building work and pay off our debts?
Or are there other ways around it? Like transferring our mortgage over?
Any advice greatly appreciated.
Thanks in advance.

Lipstick_2

Hello. In my opinion you should have a good look again at what you have got, slug it out and stay.

You will only cause further grief for you and the in-laws by having to start again.

Bite the bullet and take the bad experiences forward.

Luv

Lipstick

MortgageMamma

Ok you are mortgaged to the hilt and have no equity in your house whatsoever, and the estate agents fee's (should you use one) will probably eat out that last £1k, that is, if you are even offered the asking price.

You have debts of 21k and a combined income of £32k p.a. you don't mention if you have any kids.

In these circumstances without a deposit and with your credit situation you will find it very hard to get a 100% mortgage.

If you inlaws are offering to put you up to help you out, how about you move in with then for say 18 months, pay them a bit of board and put all your spare income into paying off your debts with the cccs within those 18 months? that was you will get a completely fresh start, and although your credit rating will no doubt be a bit damaged you should have no problem getting a mortgage. One thing I would advise you to do if you are thinking of getting another mortgage - get some mortgage payment protection insurance that way if the worst comes to the worst again you have a better chance as you won't have to survive on credit cards

silvercar

If we were to sell our house and didn't have enough to clear mortgage what happens about paying the excess?

You wouldn't be able to sell without clearing the mortgage. If the proceeds from sale were not enough to totally repay the mortgage (including any charges) the sale couldn't proceed. The alternative is to find the money elsewhere to make up the difference.

Would it be possible once we have sold our house to have our names put on their mortgage and then remortgage for a further 60k to pay for the building work and pay off our debts?

If you want your names on the mortgage thay would also have to go on the house deeds. Whether your credit is too bad to get the amount of money you need would depend on the lender. The amount lent would depend on the income of you and the in-laws. Remember you would all jointly be responsible for this mortgage - creating a financial link between you all. Is this something you can impose on the in-laws? Only a few lenders will consider more than 2 salaries so you would be advised to proceed through a broker, though phoning your in-laws mortgage lender could prove worthwhile as that loan would need extending or redeeming.

gibboking

Yes we have kids a 3 year old and a baby due in August.
Building this extension is something we all want to do, but we just want to make sure that it is possible first, otherwise we wouldn't of applied for the planning permission.
In laws have 7 years left on their mortgage but when that is up they have to find £30k to clear it as they have an endowment shortfall and can't afford to do a lot about it now as FIL is on disability benefits and MIL is his main carer, so they are really worrying about how they are going to pay this off.
My hubby works away Mon - fri and we both feel that our kids are going to miss out on having a good family life while we are in this pit of debt. And at the moment this looks like a soloution that could help us all out. Or are we going to be jumping out of the frying pan into the fire?
We did live with my in laws for 2 years before we bought our own place and are not worried about living with them again as we all get on really well, so that wouldn't be an issue.

toltec_2

Personally I would avoid linking my finances with the inlaws just now, you're a none to healthy aquisition for them and they with an endowment shortfall have their own problems. If you ever do move in with them, for their protection read this forum on bailiffs and debt collection agencies and their property. As for yourself, do you trust them enough to pay their mortgage without putting your names on it until you're in better straights?

With all due respect to people on this forum, I'd advice you book a debt counciling appointment at your local citizens advice bureau. You need some lengthy assessment and advice.