What can I do?

wot_a_life

we have got an interest only mortgage that is 2 years old, because of the interest rates rising, we are REALLY struggling to pay the instalments.

We have looked into re-mortgaging to try and bring the re-payments down, but have had no luck.

Meanwhile, our debts are mounting up and a company has requested to put an order on the house for £2,000

Would we be better to try and sell the house? go back to renting?

Currently, we owe £167,000 on the mortgage, no loans secured on it.
Would we have to pay fees up frount if we sold?

dwsjarcmcd

I don't see the point in re-mortgaging as the rates you will pay now will be higher that the one you have. If you sell you will probably need to pay Early Redemption Charges (3% to 5%) of the loan.

If I was you I would go and see Citizens Advice for help and advice

dunstonh

Its time for you to sell. You are going to have to at some point anyway with an interest only mortgage. If you cannot afford a repayment and go interest only you are taking a big risk. If you cannot afford an interest only mortgage you should buy the property.

Your choice is do you get out now while you can or do you wait until you are forced out and all the mental hassle and inconvenience and costs that go with it. Not only that, having a really bad credit record can impact on your choice of places to rent as many landlords credit score you and they wouldnt take on a poor credit risk. That could leave you with rental properties which are less than desirable.

wot_a_life

Thank-you,

But will I have to pay upfrount fees to sell the house? I know the valuation can sometimes be free, and there are no sale no fee deals, but do you have to pay an upfrount fee to the estate agent?

I've never sold a property before, this is our first house on the property ladder

17Dave

There are many "no sale no fee" estate agents out there. So you should not have to pay up front unless they charge extra for advertising.

Perspective

There are companies that buy your house and rent it back to you. However if you go this route you will have to ensure that you get guaranteed tenancy for a period that you feel comfortable with. You dont want to sell your house at a discount and then get kicked out in 6 months. Simon

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

silvercar

What is your house worth?

The quick sale companies will not give you full market value, which is why you are better off selling yourself. If you sell yourself all fees (estate agent, solicitor, mortgage redemptions) are paid out of the sale money, so you should pay nothing up front. You just need to make sure that the sae price covers the costs, and hopefully gives you some money for a rental deposit.