Mortgage help.

Vickyb123

Hi,

I'm not sure if anyone can help me or not. Infact I am very doubtful, but thought here was worth a good try.
In 2007 (when house prices were at their highest!) myself and my now husband bought a new build property together. It was on the market for 152k . As we were first time buyers and new in our careers etc, we were persuaded to take up an offer by the company who built our house. Basically, they loaned us 27 k , which we could have for five years before paying back. This meant we took out a mortgage for 126k. Worst decision I ever made. I bitterly regret this now and the whole thing is having a huge affect one me now.
House prices obviously slumped, so we were unable to move before te five years were up. So in May 2012 we had to start paying back the loan in monthly installments and our mortgage payments too. This isn't so much of a problem really, financially we manage.
We both earn more money than we did then as we have progressed in our careers (I am a teacher, which I was then only only newly qualified, and my husband a manager) . We have also gone on to have three children. And this is now the problem. The house is too small for us all and we want to move on.
But how?!? Our house is still quite likely not worth enough to cover the loan (of which we have 22 k left to pay off!) , our mortgage and a deposit on a new place . Am I trapped permanently ?! My mental health is being severely impacted, squashed in a home which I don't like.
We have found a beautiful home where I grew up. The lady owner has died and her daughter is selling. There has been little interest shown in the property and it has dropped from 245 k to 200k in the last six months and I have been told would accept less . We have viewed the house and I am in love with it.

Anybody able to help us get out of this ridiculous situation or are we, as we suspect, a lost cause?!

We earn about 60k between the two of us , a year. If that makes any difference?

Vickyb123

Thank you in advance for any help offered. I would be very greatful xxx

libf

How much is your current property now worth? How much is left on your mortgage? Do you have any savings? Do you use child care?

Vickyb123

We haven't had it officially valued but the estate agent who we spoke to when we viewed the other house said that he would have thought (unofficially ) between 135-140 k now. Of course our house is 'lived in' so that's not to say ours would be ha! (Although we've just had new carpet down and have painted most of the rooms) .
My eldest two are at school (well the second will be in September) so we just pay for the youngest in my school nursery. Which equates to about 500 pounds for a half term.
We both have credit cards with a couple of grand one them (hate debt but there you go!)
We pay off 250 a month off the builders loan. We could afford to pay more but have even putting the extra wage towards new carpets etc.
I was part time until last September but am now full time which is the reason we have disposable income now. We didn't before then .

Vickyb123

My youngest is three in feb so we wouldn't pay for childcare beyond then (as he's only in 15 hours a week) .
My partner and I work opposite days to try to keep that cost down.

libf

So house is worth 135k. Builders loan is 22k. How much is left on the mortgage? 113k and you can sell without negative equity. More and you have something for a deposit, although the debt will count against you.

Sounds like your best bet is to work on paying down the credit cards and saving as much as you can if you want to move, or see if an extension to your current house for more space would be more cost effective and if so save for that instead.

Do you have a budget for each month?

A de-clutter and sale of unneeded belongings could help with both the feeling of space and generating some additional funds.

Vickyb123

Thank you! I know that you're right , which is what I feared , that the best thing to do is to pay off some of the debt (loan, credit cards) . I just hoped that there was a miraculous solution out there. I know deep down that there isn't .
Sadly an extension isn't an option, we hardly have a garden. The downside to this new build, as many as possible built, in the smallest space.
The house we like is an absolute steal, I think te only reason it hasn't sold yet , is because it is a little dated. With the new reduction I'm sure it will be snapped up. Gutted about that! Would be an ideal family home, allowing my children all a room each and a lovely garden to play in.
As for selling, I'm always selling the kids bits that they've out grown ...they have enough to take over the world! Xxx

Thanks for your help :-)

Vicky

Thrugelmir

Overpaying the existing mortgage, repaying debt (or saving) will give you the drive and focus that's required. Only people that can do something is yourselves. Think small and the task will be less daunting. As the old saying goes "take care of the pennies and the pounds look after themselves".