Offer to consolidate mortgage arrears

Skeety

Hi All,


First post so please be gentle


Long story short I had to take a year off work to care for my partner after a massive heart attack and got into mortgage arrears having never missed a payment in 17 years. We were taken to court with a view to reposession but due to the circumstances the Magistrate ordered us to pay £1 a month and pay a lump sum which we had proof of we were due which was paid and the order written off.



Anyway, we are getting back on track, have used Stepchage and other very helpful agencies to deal with our creditiors and have stuck to repaying whats promised as advised.


I got a call from out mortgage company today with an offer of consolidating the £11k arrears into the mortgage which at first thoughts seems like a reasonable option as we will have a fixed monthly payment of about £7 a month more. This is due to us maintaining the payments of the normal contractual amount for 18 months. However they were saying the following:


1, Once you are out of arrears your credit score will start to improve quickly as the default will be removed.


2, We may be able to get a better deal once we are not in arrears, currently paying 2.75% No real option of going elsewhere due to credit score in the mid 300's.


Does anyone have any advice to offer?


If it's relevant the property is worth about £375-£400K and the outstanding balance including arrears is £104K


Cheers,


Jon.

MovingForwards

They are looking to incorporate the arrears into your outstanding mortgage term so you will be paying more interest on it.

If you take up the offer you will know the monthly payment and not have to worry about the arrears as they are back into your mortgage.

You can then overpay your mortgage to reduce it all back down, subject to the max amount you can overpay.

It is a lifeline they are offering and a helping hand. Perhaps it will unburden the arrears from your shoulders and give you the breathing space you need now things are looking a little better for you.

Ignore the credit score, it means nothing but a bit of fun. The main things you need to look at are your open/closed accounts and see what is registered.

getmore4less

Is the £1pm payment plan still in place?

Is interest accruing on the arrears?

what other debts do you still have on DMP and how long till they are clear.

What is the current mortgage deal, SVR/fixed payment and full term.

Depending on all of the above and the lenders best <50%LTV deals I might be tempted to counter offer.

getmore4less

Not a top priority if it is £1pm interest free when there is a £93k secured debt at 2.75%

Skeety

Hi,


Thanks for taking the time to reply


The £1 ended 12 months ago and we are now paying £730 per month, we do have other debts but will take me a little longer to get those figures. A couple of them have been settled and another one gets the final payment tomorrow.


We will be in a position to overpay an amount hopefully later this year.


The current deal is SVR after a discount rate expired, they are saying a new fixed rate deal may be an option but not until we have consolidated the arrears, even then no promises.


Hope I haven't missed anything.


Cheers,


Jon.

getmore4less

Are they accruing interest on the arrears

Any debts over 2.75%