Together mortgage hell

andrew0174

hi I am after some advice


my wife and I currently have a together mortgage consisting of a mortgage with 135k balance and an unsecured loan with a balance of 25k


we have a really poor credit rating and are currently in arrears of 18k with the above and the loan has a charging order on it over the property


the total payment for this together mortage and loan is £1220 and is crippling us financially


I have tried speaking to NRAM and they cant do anything to help to reduce the payments as our income/expenditure shows we can afford the payments


I am currently desperately looking for a way out of this mess, have considered most options like handing the house back to NRAM, selling up and renting and even declaring myself bankrupt


We could comfortably afford the repayments on the current mortages available but with our poor credit rating cant see any way of reducing the payments and keeping the house at this current time


has anyone else been in this situation and found a way out


I would appreciate any help or advice anyone can give me I know I have put myself in this mess but I am at a loss right now


if anyone needs any more info don't hesitate to contact me


thanks

silvercar

Realising you are in difficulty and trying to sort it out is the first step, so well done on having your lightbulb moment. I hope someone reading will be able to offer suggestions.

I am currently desperately looking for a way out of this mess, have considered most options like handing the house back to NRAM, selling up and renting and even declaring myself bankrupt

First question is what is your house worth?

Do you want to carry on living in it or would you prefer to give it all up and rent somewhere?

Bankruptcy won't work as an immediate option, as it excludes secured loans and mortgages. You would first need to hand the house back ie voluntary repossession.

I have tried speaking to NRAM and they cant do anything to help to reduce the payments as our income/expenditure shows we can afford the payments

You may need to look at your expenditure to see where you can cut back. Debt free wanabee part of the board will have people to advise.

Your total loan is 125+35+18=178k, that is what you need to sell up (+costs) what is your home worth.

You say you pay 1220 a month, plus building insurance etc. What would your rental be?

ACG

Can you not sell up and rent for a while?

Thrugelmir

andrew0174 wrote: »

I have tried speaking to NRAM and they cant do anything to help to reduce the payments as our income/expenditure shows we can afford the payments

Then appears that something doesn't stack up. There's no easy answers sometimes. Other than to dig deep, and to tackle ones problems head on.

Is there any equity in the property?

jamesd

andrew0174 wrote: »

I have tried speaking to NRAM and they cant do anything to help to reduce the payments as our income/expenditure shows we can afford the payments

What is causing the difference between their affordability calculation and why this payment is crippling you financially? What aren't they including that you are spending?

Is NRAM also refusing to extend the mortgage term? That's one of the easiest ways to reduce payments.

andrew0174 wrote: »

I am currently desperately looking for a way out of this mess, have considered most options like handing the house back to NRAM, selling up and renting and even declaring myself bankrupt

Don't had the house to NRAM or use bankruptcy. If you do go this route, selling the place yourself will get a better price and avoid the major negative credit consequences of the other two options.

andrew0174 wrote: »

We could comfortably afford the repayments on the current mortages available but with our poor credit rating cant see any way of reducing the payments and keeping the house at this current time

Don't apply for a credit card yet but use the MSE credit card checker to see what card deals seem to be available to you for 0% for spending cards and let us know. That will help to work out just how good or bad your credit really is at the moment.

andrew0174 wrote: »

has anyone else been in this situation and found a way out

A more accurate affordability calculation of hanging in there while inflation-related pay increases or benefits increases make the mortgage cheaper is usually the best way to go, perhaps helped by use of any cheap credit that might be available.

andrew0174

Hi

Thanks for your swift replies

We owe nram 134k mortgage and 30k for the unsecured loan...total...that includes arrears so we don't have a huge shortfall if we sell up it will be about 4k short before selling fees and stuff

The income expenditure shows we can afford the mortgage payment of 1076 a month which we can but it does t allow us to put any non priority payments in as well and ridiculous paying that amount for the house and area we live in

This was meant to be a short term fix 8 years ago but is now just a burden on us both

I have toyed with the sell up and rent but worry that I won't be able to rent with such a poor credit rating and at 42 I feel I wouldn't get back on the property ladder anytime soon and will lose the security for my wife and kids

Thrugelmir

andrew0174 wrote: »

I have toyed with the sell up and rent but worry that I won't be able to rent with such a poor credit rating and at 42 I feel I wouldn't get back on the property ladder anytime soon and will lose the security for my wife and kids

Then you should consider defaulting on less important debts.

jamesd

andrew0174 wrote: »

We owe nram 134k mortgage and 30k for the unsecured loan...total...that includes arrears so we don't have a huge shortfall if we sell up it will be about 4k short before selling fees and stuff ... The income expenditure shows we can afford the mortgage payment of 1076 a month which we can but it does t allow us to put any non priority payments in as well and ridiculous paying that amount for the house and area we live in

OK, that's relatively good news - at least you know why it's tough and not NRAM using crazy numbers that miss critical spending needs.

You're not really paying that amount for the area you're in, at least as far as the mortgage goes. The together loan will be a big part of the bill.

andrew0174 wrote: »

I have toyed with the sell up and rent but worry that I won't be able to rent with such a poor credit rating and at 42 I feel I wouldn't get back on the property ladder anytime soon and will lose the security for my wife and kids

Given the situation don't sell up is my advice. Your pay is likely to gradually increase and each time it does that will free up a bit more money for other spending because the mortgage cost won't go up. Time will also help your credit ratings and give you better options.

In the shorter term if you can get 0% for spending credit cards you could use them for spending and use the money you spend on the card to make extra payments on the together loan. You can't afford to just increase spending yet, that has to wait until your income increases.

You're in for a few more tough years but it should gradually get easier, with the biggest change coming when you can remortgage, but that'll probably be five years away. It's not a situation that'll never get better, just takes time and hanging in there for a while longer.

You might also find it useful to post income and expenses details over in the debt free wannabe board. The people there are really good at finding ways to save money that could free up cash for other things and/or let you pay down the together loan part faster.

Thrugelmir

jamesd wrote: »

Your pay is likely to gradually increase and each time it does that will free up a bit more money for other spending because the mortgage cost won't go up.

Interest rates at some point will rise. Mortgage costs will therefore rise. Many people particularly those employed in the public sector aren't seeing increases in disposable income. Increased pension contributions are also impacting personal finances.

jamesd

Yes, interest rates in general will rise and general mortgage costs are likely to also rise. But this is a time game. Each month means more money paid off the borrowing and more time passed since negative credit entries, increasing the chance of being able to switch to a cheaper deal. Time also allows more time for the general trend of increased property prices to increase equity and help with a new mortgage.

It's really a case of sticking it out until pay, equity and credit record change and make things easier.

getmore4less

Has the affordability taken account of the arrears spending the money has been going somewhere.

any other debts?

income?

What's the SOA look like, no one can really say what could work without seeing that.

0% spend CC would just make the situation worse.

Inflating out the debt is a long haul game these days and an impractical way to deal with these situations.