Help with my mortgage!

dommy27

I hope someone can give me some advise as I'm slowly losing the will to live......

I've had my mortgage for just over 5 years and in that time my life has been a nightmare. Through various different factors (the main one being that my mortgage was and still is very high) I got myself into a lot of debt. At its worse it was nearly £19,000. After a few years of this I decided to go with the CCCS (Step Change) and in fairness that has helped and made things easier. At the time of writing this I owe around £11,000 and by the end of this year it will be sub £10,000 which will be a big milestone for me. But the main problem by a country mile is my mortgage. Every month I loathe giving the Alliance & Leicester money. When I first took out my mortgage the fixed rate for the first 2 years was 5.69% interest only. This used to be £794 a month based on my debt of £163,000. Then it came down to their base rate of 4.99% (still interest only) which is the rate I am still on. I am free to change lenders but the problem is that because of the loan to value (there is some equity in the property, I had my place valued by a few estate agents and it was worth around £175,000 - £178,000) I am struggling to find anyone who can help. I've begged and pleaded with the Alliance & Leicester to help but they always turn around to me and say because my credit rating is not great and because of my debt management plan they can't help.

I did do a credit report last year and it came out amber/yellow, so pretty bad. I have spoken to Alliance and Leicester several times over the years about helping me and understanding why they can’t do anything with my rate, even though I know so many people who have very low rates and they are paying back the capital on their property. If I was paying back the capital it wouldn't be too bad, but they have said to me they can't make me change my mortgage.

I simply do not know what to do. Do I sell my house and hopefully get back £10,000 - £15,000 and rent for a bit? I really need some guidance from someone.

Thanks

[Deleted User]

dommy27 wrote: »

If I was paying back the capital it wouldn't be too bad, but they have said to me they can't make me change my mortgage.

They can't make you change your mortgage, but there is nothing to stop you overpaying so as to reduce the capital, so as to effectively be on a repayment mortgage.

R_P_W

You loath paying them? You're the one that took out an interest only mortgage!

dommy27

I made a mistake when I was younger, all I was after here was some advice

dimbo61

Well you are on the right website!!
if you live and breath the wise words on many of the boards such at
Debt free wannabe
Mortgage free wannabe
Budgeting and Bank accounts
You may pick up good advice on how to save money
You need to sit down and write down where every single penny goes each month.
You must have been on a good income 5 years ago to get a mortgage of £163K.
Now you need to save and live a more frugal life
Good Luck

gazter

R_P_W wrote: »

You loath paying them? You're the one that took out an interest only mortgage!

Anyone taking a mortgage out with an introductory rate is on a wing and a prayer when it comes to the end of the rate and you get bumped onto the svr. Its easy enough to think we can move lenders, but what if your circumstances change, while you can easily pay your mortgage, but because you cant move you are paying 5% interest instead of 2.5%.

dommy27

I wasn't. Unfortunately I was one of the mugs who got sold the benefits of a self cert mortgage. In actual fact I've never earnt a great wage (most of them have been basic salaries of sub £20k) so that's why I've struggled.

I lost my job 6 months ago and after working various temp jobs I now have a good job but still not amazing pay. And because of the last few months I'm actually behind on my mortgage by almost 2 months which I'm trying to pay back. It's gets worse....

Morgage_Confused

you will never get a mortgage anywhere else for 160k with a 20k salary.
what about getting a lodger to help pay the mortgage?

dommy27

I tried that and that has helped, but not great when you have to live with a stranger.

In all honestly shall I sell my place and draw a line underneath it? I just feel that my credit file will be damaged for years to come

Thrugelmir

dommy27 wrote: »

In all honestly shall I sell my place and draw a line underneath it? I just feel that my credit file will be damaged for years to come

Given your overall debt problems. Now is not the time to worry about your credit rating as the damage is already done. However it is the time to make life changing decisions. That way there'll be light at the end of the tunnel.

By selling the property. You'll speed up repayment of the unsecured debt and remove the burden of the interest only mortgage. As you don't have the money to repay the capital. You would be better off renting and let someone else worry about the cost of maintenance etc.

dommy27

Thank you, that's good advice. I have been thinking recently about selling