What are my options - beginning to really worry

Salli1981

Hi there - I'm new to this forum so please be gentle!
My husband and I currently have a 20 year mortgage on a house worth around £190k (we paid £200k 8 years ago). So we have 12 years 8 months left.
When we took the house - we were in a good financial position - husband was self employed but earning well, and I've been in a steady position on a good salary for 11 years.
We took it on an interest only mortgage purely for a couple of months whilst we sold our old house.
Devastatingly , my husband then got hit by the recession, and spent almost a year trying to keep his business going, but after 18 months he had to close the business.
We also had a 2nd child on the way!
We were rather silly and left the mortgage for about 5 years on interest only.
I then discovered Part and Part was an option - so I called and changed it to part interest (70%) and part RP (30%). This was all we could afford at the time as nursery fees have been quite crippling!
Husband took a massive salary decrease and is now in a steady role, but much lower salary, and the children have become much more expensive! (our son has disabilities).


We receive DLA for our son, but it literally gets eaten up with his needs, and our salaries with the bills.


We still have 174k left to pay in 12 years 8 months - and we don't have a lump sum to pay it off at the end.


Remortgaging is a major issue as a joint party, as my husband is 54 this year, and I'm just 34. His pension is an old one and he doesn't have any fallback or private pension.


I have a pension with work, and I am trying to be more careful with my money than he has been, just to allow me and the children to live when he retires!


we 'joke' that one of us has to die to get the finances straight - but it's actually true!


When we come to 12 years time, if things haven't radically improved, I'm going to be left with 125000 to pay which I just honestly don't have, and don't see me having within 12 years.


Does anyone thing it would be possible to (at that point) transfer the mortgage into my name - remortgage at 125k and have another 15 years to take me until I'm 60 to pay it off. I could manage it if I'm still working at my current salary.


OR would you suggest seeing if they will allow it to be put into my name now? (possibly not - with my earnings on my own on £174k)


Any gentle suggestions - I know we are in a mess - I don't need to be told that!!! I'm so embarrassed we got into this situation.

BJV

OP no-one ever makes a choice and thinks hey this is the wrong thing to do but hey lets do it anyway. We all make choices along the road that are right at the time. In hindsight it may not of been the best way forward but it is too easy to say "what if ". You did what you thought best at the time.


I am not a financial wiz but I am sure that there will be some fab mortgage advisors and saving specialists along soon to help.


You have done the hard part you have admitted that there is a problem and you are looking for a way to sort it out.


Good Luck and for what it is worth - no one of you does not have to die to sort yourselves out I am sure that there will be lots of ways.

libf

No one knows what will happen in 12 years time. Concentrate on paying off as much as you can in the meantime and keep re-assessing as you go.

TrickyDicky101

Can you detail what both your incomes are and what this 'old' pension of your husband actually is?

What rate are you currently paying on your mortgage? Is it fixed or variable?

Salli1981

My husbands pension is from 15 years with ICL computers which he took voluntary redundancy from about 15 years ago - but he tells me it's really rubbish - although he doesn't know what it is, or hasn't told me! So I assume it would be discounted from our calculations as it has been frozen.


We are on a Variable rate of 3.99% according to our mortage statement for 2014.


My salary is a basic of £21400 (I work part time) with OTE of around £32000


My husbands salary is around
£30k ( he has an allowance for car built into this. )


I hope this helps!

enjoyyourshoes

you need to find £1144.74 per month for the next 152 months to pay off Capital sum. Can you skrimp and save to achieve this ?


Au Pair instead of child minding (live in)


2 kids in bunk beds in 1 room


Reduce food bill (make own lunch for work, scratch cook, don't buy brands, shop around for best buys etc)


Stop luxuries (sky, phones, u/s DD/SO, fags, alcohol, lotto, magazines etc, snacks, little treats (as little add up to a lot)


If you cant then will have to look for Plan 'C'

LateStarter

It's not as bad as you think. Fist off, you don't have to pay off the mortage in 12 years - as you are young and have more than 30 years of working life ahead of you, you can remortgage on a much longer term (hopefully on a repayment basis this time).

Are you locked into your current deal for the mext 12 years? If not, speak to a mortage broker to find a more suitable product.

Either way, what you should be doing is saving or overpaying as much of the capital as you can (even £25 a month will make a big difference). Your husband's "rubbish" pension should be quite useful here - and don't let him get away with saying he doesn't know how much it is, it can't be too much trouble for him to make a phone call and find out. Not if things are as desperate as your say. You're in trouble - facts are your friend.

Best Wishes
LS

Salli1981

We might be able to manage £1000 instead of the £830 that we currently pay. What do you mean by capital sum? What about the interest they charge? (sorry this is my first ever mortgage so I'm really a bit unsure of what all the terms mean!)

Salli1981

Hi, We are not locked in I don't believe, but they seem to have our house down as being worth £175k so we are 'almost' in negative equity, and nobody seems to want to touch us, and they seem unwilling to allow us to remortgage with both of us on the term, as my husband is 53.
Were you meaning that I remortgage in 12 years as a single person - that's what I'd like, but who knows if Halifax will like me enough to allow that to happen!

Salli1981

If I can find another £170 a month to make our monthly payments to £1000 would you suggest doing it by UPPING the part and part (repayment side) or overpaying?
My concern is if the interest rate rises, the whole thing could shoot right up and then we would be stuffed. If I did it as overpayments, then at least I have a choice (although I am terrible and I'll sometimes choose a month NOT to do it - as I've tried this before and maybe managed to do it 4 months out of 12 (at £200 a time though - when I've had bonus's)

LateStarter

1. Does your mortgage allow overpayments? If so you may be able to pay off some of the capital (the 170k) very month. This would mean your monthly interest payment would go down. Alternatively, put that in extra £170 pm into an ISA for 12 years, you'll have a large chunk of cash to reduce the amount you need when you remortgage.

2. Yes I meant a longer mortage based on your earnings only - if you can reduce your mortage amount (see above ), I'm sure that in 12 years (or 10, or 5), you'll find a lot more lenders than Halifax "like" you.

And honestly, it would help you to see an independent mortgage advisor/broker.