changing interest only mortgage to repayment - with several debt problems

stuarthannam

We have mortgage with Future mortgages as an interest only. However, we dont have anything else to pay this off so with the way things are now we should try to get onto a repayment mortgage. However, we have a secured loan, several bad defaults, a charge on the property from one of them, and we both have a bad credit history (recently got turned down for car finance with carcraft, that is how bad it is!!). All this built up when i was out of work last year for nearly a year and we kept going and although we have now come through that and finally able to shop without going to the yellow label area first.... i need advice as to where to go, what to do and how to start getting our mortgage repaid (been here for 5 years and amount borrowed of £140k is still same on morgage). Any help and direction welcome, and happy to clarify anything. We are both in full time work, no dependants.

ACG

You dont say the value of your property or your income but due to how recent the defaults are you might struggle to get a decent rate.

Have you spoken to your current lender and asked if you can just make monthly payments on top of what you are currently paying?

stuarthannam

in the middle of being out of work 18mths ago, we put house up for sale and it was valued at same price we bought it for - fortunately i found work but at a greatly reduced salary so we are keeping heads above water, but its a case of staggering from one payday to another. our mortgage company advised that they are not doing any new loans - does this count as a new loan or a reworking of existing? We did fall into arrears with them of £5k, but over the last year we have reduced this down to £4k and will keep going. All in all, our salaries cover our outgoings with approx £400 spare to pay for food/travel/etc per month.

ACG

Its not rearranging anything, its just paying more than your contractually obliged to.

So if interest only is £100 a month and your pay £110 a month, your paying £10 a month off the capital.

Thrugelmir

stuarthannam wrote: »

how to start getting our mortgage repaid (been here for 5 years and amount borrowed of £140k is still same on morgage).

Suggest you post on the Debt Free Wannabe board. As what's required is a total review of your financial position. Applying for more yet credit isn't going to resolve problems either. First step is to tackle all the accounts in arrears. Pay the most to the one charging the highest rate of interest.

To have any chance of repaying a £140k of capital on your mortgage you need to watch every penny. Not waste it on paying interest.

mothershipton

i doubt you would get a remortgage if you still have debts on your mortgage. perhaps the best thing would be to get over to the debt free boards and see if you can trim your budgets. How long does your mortgage have to run?

Simon_gloster

You doubt they'll get a remortgage? There is 0% chance from what I have read.