Variable Mortgage in a DMP

anolan

Hi - we are in a DMP with Payplan and have been paying every month as required for over two years now with about 2 and a half years to go. Our mortgage is a standard variable rate of about 6.6% due to our bad credit history. We missed one mortgage payment about a year ago and this was added to our monthly payments. Our current lender (GE Money) wont offer us any other deal so we are trapped. If interest rates go up then we will be in real trouble. Are there any options open to us or does anyone have any advice ?

kingstreet

Nothing to suggest, sorry.

ACG

There will be no other mortgage options out there until the DMP is cleared unless the equity in your house is about 40%.

If rates were to rise you would really need to consider looking at selling up.

anolan

Per month we pay £1032 for the mortgage and £872 to the DMP.

So despite wanting to clear the debts as soon as possible, restore our credit rating and move on, we seem to be trapped without any option other than to sell in a depressed market.

Thrugelmir

Is your mortgage on a repayment or interest only basis?

anolan

Repayment

Balance is £135k on value of approx 185k

Jason_Bourne_2

anolan wrote: »

Hi - we are in a DMP with Payplan and have been paying every month as required for over two years now with about 2 and a half years to go. Our mortgage is a standard variable rate of about 6.6% due to our bad credit history. We missed one mortgage payment about a year ago and this was added to our monthly payments. Our current lender (GE Money) wont offer us any other deal so we are trapped. If interest rates go up then we will be in real trouble. Are there any options open to us or does anyone have any advice ?

Was the variable rate out if choice ? Didn't you have a fixed rate option available from GE when you took the mortgage out?

pinkteapot

Where in the country are you? The market's not depressed everywhere anymore...

You've got about £50k equity. Would that be enough to clear your debts?

Thrugelmir

anolan wrote: »

Repayment

Balance is £135k on value of approx 185k

At least you're heading in the right direction by being on a repayment mortgage and should continue to build equity. As the balance owed reduces then the impact of future interest rate rises will diminsh.

Unless you are prepared to sell up and release the equity to clear your debts quicker. Then your only other option is to dig deep and battle on. Unfortunately defaulting on debts comes at a cost, irrespective of the reason.