monthly payment doubled because of Mortgage Arrears

Annisele

fairygal44 wrote: »

I have one year left on my mortgage on a 25 yr mortgage. I have 85% equity.

With only a year left on a 25 year mortgage, 85% equity is rather low - are you sure? (It might well be 85%, especially if you've taken further advances, but it does strike me as on the low side).

Is your income now stable? If you can now say for sure that you can afford £x per month, it might be worth asking your lender if you can extend the term so that your payments will be £x.

getmore4less

A 25y loan @ 4% would normally have around 93.5% equity with 1 year to go before any HPI.

A doubled payment would reflect around 87.5% equity before HPI.

the higher the rate the lower the equiy 5% would be 93% and 86.3% and

Goldiegirl

In the final years of a repayment mortgage, any change in the mortgage debt can have a huge effect on the monthly payment, as the mortgage needs to be fully repaid by the end of the term


You don't say how long your account was in arrears, and how many letters you had with a £35 charge. Also, other fees may have been debited to the mortgage, like your annual property insurance premium. If this is not paid, this also will increase your mortgage debt.


I suspect this has been going on for quite a while...... as they would generally be unwilling to start talking about repossession on what is regarded as a low risk case with lots of equity in the property.


Your debt many have significantly increased with all the fees, and now you've only got one year to pay the mortgage off, hence the big increase in the monthly payment.


I wouldn't be at all surprised if the monthly payment you have been given is correct

enthusiasticsaver

If you only have a year to go on your mortgage and it is a repayment mortgage then consolidating arrears will have a significant effect on your mortgage payment if you only have one year left to repay so yes it is not surprising the monthly payment doubled. Did the term remain the same when you consolidated? If you are struggling to pay the new payment you could extend the term providing it does not take you into retirement? How old are you?