Advice needed urgently please

Kathy1958

Hi there, I'd appreciate some advice in helping me to sort out my current situation. I've tried to keep it brief but also to add all salient points.

I was divorced 12 years ago, stayed in the family home with my 2 children who were 17 and 14 at the time and bought my ex husband out which meant extending the term of the mortgage until 2024.In hindsight, this wasn't for the best as I couldn't afford it really so relied on credit cards and built up debts.

In 2007 my current partner moved out of his rented accommodation and moved in with me. He is a self employed contractor whose work fluctuates wildly between lots of work and very little. In the last couple of years he's earned approx £8,000pa
I work full time and have a couple of small pensions that I have been drawing since I was 50 (I am now 57) but my income alone is not enough to cover the basic outgoings but it isn't so low for us to qualify for any benefits as I've checked. When my partner has got work, all we do is play catch up with our debts.

I have got a DMP with Step Change to cover the credit card debts. My credit rating is abysmal as I defaulted on some debts before sorting out the DMP

My partner will be 64 in May so when he draws his state pension next year, things will be a bit easier. We won't be rolling in money but we should be able to afford to live

My dilemma is what to do? I can't downsize as I haven't got enough equity in the house to be able to buy something smaller without a mortgage and I won't be able to get a mortgage with my bad credit rating.

If I sold up and rented, the cost of renting is similar to mortgage payments so I wouldn't be able to afford it plus landlords tend to want credit checks.

Is equity release worth considering or even something I'd be able to do? My house is worth about £100K and I have £58K mortgage outstanding.

I do realise that bad decisions in the past have brought me to where I am now but I would appreciate any helpful advice that anyone has to offer.

Thanks

Altariel

Hi Kathy1958, I can't advise on equity release as i know nothing about it. But with regards to selling your property and renting, do you know if you would be eligible for housing benefit if you were renting? With such a low income, I would think that you would be eligible for some help towards your rent. Also, I have lived in rented accommodation for the past 9 years, with 2 different landlords, and neither of them have wanted to do credit checks, just a deposit and/or a month upfront is usually security enough. I hope you get some more useful information from some people on here soon, but in the meantime, I hope I have given you something to think about.

TBagpuss

I suspect that the amount you have outstanding on your mortgage will be too high for you to get an equity release mortgage, but you would need to take specifc advice.

It might be worth looking into the possibility of part buy / part rent properties in your area - you might be able to buy a share in a property using your existing equity - the rent would then be lower than if you were renting the entire property, and you might be entitled to housing benefit if your income is low enough enough.

If you sell up and rent, would that allow you to clear all of your other debts? If so, that should leave you with a bit more income each month, as you would no longer being making those repayments, which might make it easier to afford the rent.

Meatloaf1981

The downside of selling up or doing an equity release means that you'll either need to be able to pay rent for the rest of your days, or your mortgage will be extended/become more expensive for the remaining term. Think very carefully before taking either option. I would recommend speaking to Debtline or Stepchange for suitable advice. It may be that with the DMP you currently have in place you can offer lower repayments and avoid the need to sell your home or mess about with your mortgage terms.

andyfromotley

hi kathy,

yr situation is quite complex and serious. I don't think equity release is the answer as you are not solving your basic problem, you don't have enough income. When the equity release is spent what are you going to do? Plus you will have higher outgoings.

Do you work? If not you need to look at getting a job. Yr partner alsop needs to consider getting a job which has a more regular, and higher, income. These may be unpalatable choices at your age, but you need more income!

Post an SOA on here using this link

http://www.stoozing.com/calculator/soa.php

and people will be able to advise you, there may be a simple way around this but we need to see your finances.

Hope this helps

Andy.

Siamese

Personally, I would do everything I could to hang on to my house. In 9 years time it will be yours. Renting can be grim and very expensive, as you have no security. Think application fees, deposits, removal costs every year.
Have you cut all bills and expenses as far as you can?
Could you take in a lodger - maybe a Mon-Fri one, or a mature student?
Your partner really doesn't earn very much, not even minimum wage, so could s/he look at upping that via part-time work like a bar job?
How long will you be paying the DMP for?

Kathy1958

Thank you all for your replies. Ideally I would like to keep my house if possible but if I have no choice but to sell up and rent, then so be it.

Re work, my partner is trying all the time for work but at 64, people don't seem to want to employ him. I'm also looking for a job that pays more than my current salary but I've had no luck so far although I did get one interview so I'm not on the scrap heap yet! I have thought about getting an extra job myself to bring in a bit more but I'm so tired at the end of the day I don't think I could manage it. I was diagnosed with a heart condition a couple of years ago and this contributes to the tiredness so I don't think it's an option.

Each month I'm about £150 short to cover basics and I've pared everything right down so things like reducing my DMP payment won't really help much.

I appreciate your advice, thanks for the replies x

clueless1807

what about getting a lodger or 2 depending upon how many bedrooms you have

dancingfairy

I'd have a word with stepchange and see what they think.
I mean obviously the best solution would be for your partner to get a solid regular job that pays more than 8k a year. That must be sole destroying for him.
Do your children still live with you? If so then they will need to contribute.
df