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reserve and mortgage issue
chimpathon
Posts: 5 Forumite
ok, i'll try and make this brief...
about 10 years ago, my mum got cancer, my dad was partially retired, so i chipped in, paying their mortgage and bills and ended up moving in to help look after her. a year or two into that, my mum was taken off the deeds to the flat and i was added. They wanted to stay there, so me and my dad took out a fresh joint mortgage. This was for 10 years, fixed rate, with a reserve. There is now just under 3 years left to go. Now, my mum died a year later and things kind fell apart a little from there. I was already carrying a bit of debt, but also took on theirs, and with the funeral costs and generally running out of money - i made a couple of bad decisions with payday loans to cover things and defaulting on a credit card, and falling behind on a couple of other payments. Having to find 3 and half grand was a struggle - plus time off work to sort everything out.
There were some big debts to be paid, and i mean pretty big for a normal human being to have. To cut a long story short, we've used £23,000 of the reserve and realistically, i don't think i can afford to pay it back in time. The flat is ex-council, it was bought for £46000 nearly 20 years ago, and is currently worth about £130,000. We have just had a bill for £12,000 for new windows, asbestos removal/checks, and new front door and other repairs. We've been offered a loan from the council at £143 a month over seven years.
So, my question is...
what the dickens should i do?! i've signed up for a credit score report via Noddle.
My dad is now 76 and i don't want him to twig that anything is up. Before anyone says it, yes, i have made some bad decisions, but also some good ones! i did what i thought was best at the time and its backfired.
My credit score is 479 - so by no means great. Any advice is more than welcome.
Thanks for reading.
about 10 years ago, my mum got cancer, my dad was partially retired, so i chipped in, paying their mortgage and bills and ended up moving in to help look after her. a year or two into that, my mum was taken off the deeds to the flat and i was added. They wanted to stay there, so me and my dad took out a fresh joint mortgage. This was for 10 years, fixed rate, with a reserve. There is now just under 3 years left to go. Now, my mum died a year later and things kind fell apart a little from there. I was already carrying a bit of debt, but also took on theirs, and with the funeral costs and generally running out of money - i made a couple of bad decisions with payday loans to cover things and defaulting on a credit card, and falling behind on a couple of other payments. Having to find 3 and half grand was a struggle - plus time off work to sort everything out.
There were some big debts to be paid, and i mean pretty big for a normal human being to have. To cut a long story short, we've used £23,000 of the reserve and realistically, i don't think i can afford to pay it back in time. The flat is ex-council, it was bought for £46000 nearly 20 years ago, and is currently worth about £130,000. We have just had a bill for £12,000 for new windows, asbestos removal/checks, and new front door and other repairs. We've been offered a loan from the council at £143 a month over seven years.
So, my question is...
what the dickens should i do?! i've signed up for a credit score report via Noddle.
My dad is now 76 and i don't want him to twig that anything is up. Before anyone says it, yes, i have made some bad decisions, but also some good ones! i did what i thought was best at the time and its backfired.
My credit score is 479 - so by no means great. Any advice is more than welcome.
Thanks for reading.
0
Comments
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some more details:
mortgage over ten years fixed rate
£359 - mortgage was for £40,000
current amount used via reserve
£22,5000 -
Is this Barclays?0
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yup... i should also add, the bank told my dad that he was too old at 66 to get a fresh mortgage on his own (theirs was originally interest only)...that's partly why i got involved...0
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so my main worry is this...
i would want to consolidate outstanding loans/cards, the window bill and the reserve...that would be for around £50,000 in total..if i had good credit, that would be around £300 a month over 20 years...that would be wonderful...but my credit rating is poor...plus, as its a joint mortgage, would it be better if i got my dad to transfer his half to me (i pay the mortgage in reality anyway)...0 -
chimpathon wrote: »so my main worry is this...
i would want to consolidate outstanding loans/cards, the window bill and the reserve...that would be for around £50,000 in total..if i had good credit, that would be around £300 a month over 20 years...that would be wonderful...but my credit rating is poor...plus, as its a joint mortgage, would it be better if i got my dad to transfer his half to me (i pay the mortgage in reality anyway)...
You need a broker who deals in adverse credit. It all hinges on affordability to be able to remortgage. Realistically probably not looking good"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Really? The remortgage would clear all debts, I earn roughly two grand a month. I clear 3 debts in the next year. £35,000 to clear reserve and windows. The rest would clear older debts/loans.
Thanks for replying.0 -
Barclays have been trying to undo their "reserve" issues over the last few years. They left themselves with a big mess the way they implimented them.
they have been removing them,reducing them and sending out letters to remind people that they need to be paid off by the time the mortgage ends.
One issue is that they don't adjust the nomal payment to take account of the reserve so it just eat/accumulates the interest at the SVR. so making the regular mortgage get behind as well
Not sure if Barclays will be willing to renegotiate the terms to assist with that part of the problem.
How much mortgage is left?
reserve is £23k
What were the original terms of the mortgage?
£40k 10y fix repayment would have been 1.49%(which is very good) and have £12600 left.(+ what the reserve has been using of the payments)
What can you realistically afford £pm on just what you owe Barclays?
(if you take the Council offer as below)
What are the terms of the council loan? £143 over 7 years is £12k if that is an interest free £12k loan to cover that work I would be seriously thinking about taking that rather than consolidating into the mortgage.0 -
chimpathon wrote: »Really? The remortgage would clear all debts, I earn roughly two grand a month. I clear 3 debts in the next year. £35,000 to clear reserve and windows. The rest would clear older debts/loans.
Thanks for replying.
Lenders go on the now not the if. They have to take into account what you earn now and your current debts, spending habits and ensure you are able to pay off the mortgage if the interest went up.
It's like why people can't get a mortgage but cite but they can afford the mortgage easily as it's cheaper than rent. It's affordability now a days
This is not done by calculating if you will pay off the debts with a remortgage. While you may use the money to clear debt, someone else may use it for more gambling or their drug habit e.t.c"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0
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