Advice Please?

Newyorkdreams

Hi Lovely People


I'm after some advice/views please ....


I bought a property in 2005 under the dream start scheme with Barratts and the 25% value of the property (at current prices) is due by December 2015. Back in 2010 when I put my property on the market, I negotiated with Barratts and the Sales Director sent me a letter stating that he would accept a reduced amount for the 25% which was £17, 000. The letter was not dated and did not specify how long the offer of £17, 000 was valid for. Unfortunately, our buyer pulled out of the deal and we took the house off the market. Fast forward 4 years and I am starting to think about paying our 25%. I would say our house is worth little more than £120, 000, our neighbours house next door is up for £125, 000 and has been on the market for over a year and has a consevatory, nicely presented etc (as is ours but no conservatory).


I was wondering if I could have your views please on:


I) do you think the letter could be used in negotiating and have any legal standing?


On a different matter, I still have a significant amount of debt and I'm not sure whether or not my mortgage provider would give me additional borrowing next October (My debt would be around £12, 000 next October on a salary of £49, 000). I am planning to be debt free by March 2016. The mortgage is currently in my name only. My husband will have no debt next year.


II) Do you think I should reduce my debt repayments and save £17, 000 in the hope that Barratt's will accept the offer then pay off the debt in 2016? It means that I can pay Barratt's with cash and I don't need to go though the stress of not knowing whether my mortgage provider will give me extra borrowing and then being left with no options and nowhere to go.


Many thanks for your help in advance

NYD x

Newyorkdreams

Don't know if it would help with advice etc but:


I bought the property for £137, 500. £103, 125 mortgage which is now sitting at £87, 000 approx.

longtermplanner

Your financial goals for 2014 include "start AVCs" this should NOT be a priority for you at all, you need to sort out your unsecured debt and the Barretts payment first. If you have started AVCs then stop them immediately!

I am a bit baffled about why you have so much debt when your mortgage is so low if you earn £49k and your husband is also in work. Do you have other assets (savings? cars?)

No I don't think you can assume that the 17k offer from Barretts still stands. That was an offer, not a legal contract. However you could write to them and ask if they will still accept that.

Newyorkdreams

Thanks for you reply longtermplanner.

I've started my AVCs and will continue to pay as the rules changed around tax in April and I needed to be in before the cut off. It's only £18 after tax relief so isn't going to break the bank. I've lived my whole life being reactive and paying debt back. It feels good to be proactive and thinking ahead for a change.

I understand where my debt came from, which I've previously charted on MSE and I'm doing something about it since my LBM. I'm doing rather well - that is the main thing.

Thanks for your views on the offer.

NYD

FlacosFloozie

Hi NYD,
I suspect the offer from Barratts will only be valid for the valuation in 2010 and the house will need revalued to give a new figure but its not going to do any harm to ask them.
You do have debt but it won't be massive in relation to your income by then if you keep on as you are. You're also building up equity by paying off your mortgage so you'll have a better LTV.
I'd suggest popping over to the mortgage advice board as there tend to be some very well informed and helpful folks there. I've been stalking it a bit as we're saving for a deposit.

Newyorkdreams

Thanks FF - I did think this about the letter but thought I would still give it a go. I've got a few other negotiation tools too regarding the house and things that have not been right....
With the new mortgage rules, I am wary that I might not be given additional borrowing despite being on a decent salary so this is weighing heavy on my mind. I'm just not sure what to do.
Thanks for the mortgage board tip - I think I'll pop over there now...

NYD