Need some advice

NoTB

Hello

Longtime lurker and have decided is time to join.

I have a predicament and could do with some advice - I’ll give you the background.

So, August 2017 I join a new job - October 2017 the team I am in suffers huge setback with senior managers investigated for fraud, decision was made to dissolve the team and move operations elsewhere, sacking the rest of the team bar me as I was still on probation. They gave me the ultimatum of going to London to join a new team or being made redundant. I couldn’t afford to be sacked so I agreed - with no financial assistance from my work. I was on a glasgow salary but expected to finance my life in Glasgow while also living/working in London. I spent as little as possible when in London (most nights staying to 8:30pm as they paid for dinner after this time!). It still wasn’t enough and I found myself suffocating to the point where I didn’t know if I could afford the commute of £2.40 a day. I started taking out credit cards to be able to survive (no prior debt to this).

Fast forward to June 2016 and I have a new job in Glasgow on similar money, a baby daughter on the way with my longtime partner and our first house purchase due for completion in July.

For the mortgage I didn’t have to pay off the debt however the mortgage advisor advised to any further credit until the house was completed. We used the Scottish Help to Buy scheme for the house purchase and put down a much larger deposit due to inheritance (23k deposit). The mortgage advisor told us that after 6 mortgage payments we would be able to release this equity plus any additional equity from the payments which he worked out to be around 30k and we could roll the debt into the mortgage thus marginally increasing our payments.

We, maybe rather naively, loaded ourselves up with a huge amount of debt furnishing the house to a luxury standard (new build - didn’t come with finished garden, flooring etc etc.) which amounted to a small fortune of £30k.
I am not long off the phone with Halifax asking, as the mortgage advisor assured me I could do, to roll my debt into the mortgage with the available equity to be given a resounding no it is not possible due to the Scottish HTB scheme!!

Reality is starting to set in that with baby arriving I will not be able to have any money and therefore need to sort myself out ASAP. I have spoken with StepChange and am due to call them back after initial consultation.

My question is, have I been missold the terms of this mortgage by the broker? Is there anything I can do? Please note I’m not trying to get out of paying my debts, I just need to know where I stand as I firmly believe I was irresponsibly advised as my credit will take a pummelling as a result of his irresponsible advice. Will creditors show any reason with me as a result of this?

Does anybody have any idea where I stand?

Ta

North of The Border (NoTB)

sourcrates

Hi,

Any further borrowing would be subject to affordability, and obviously with all your debt, you do not now qualify.
Mortgage brokers always make things sound so easy, but in reality it isn’t always that way.

I think there was a degree of nievity on your part, that your mortgage company would just accept another 30k without question, that’s not how it works, and you should not of taken what they said as gospel.

As a homeowner your options to deal with this are very limited, but stepchange should be able to advise, with only the basic information you have provided, I would say some kind of debt management may be in order.

FTBuyerGlasgow

Are you trying to release your £23k deposit?

That seems a crazy idea.

You do have a couple of options available to you, there will be others along to give advice about DMPs etc. One thing I'd say is make sure you are achieving the highest income possible.

NoTB

Hi sourcrates,

Completely agree there was a degree of naivety on my side however, as confirmed by Halifax, it is not a matter of affordability rather the fact I am on a Help to Buy scheme which the broker never advised that this was a hard stop from Halifax which is my issue.

Thanks for your reply, I am in the process of getting details together for entering into a Debt Arrangment Scheme as I’m a Scottish resident.

NoTB

FTBuyer - my 85% share of the house is worth, according to Halifax, £190k. I have an outstanding amount of £125k.
I’d only be allowed to borrow upto 85% of my share being c.£150k. £150k - 125k = 25k is what I was trying to release while still leaving significant equity.

However, Halifax have said that this isn’t possible due to their policy on the Help to Buy Scotland which the broker didn’t inform me of which is what I was getting at.

-taff

NoTB wrote: »

The mortgage advisor told us that after 6 mortgage payments we would be able to release this equity plus any additional equity from the payments which he worked out to be around 30k and we could roll the debt into the mortgage thus marginally increasing our payments.

Is this written down anywhere?

Pixie5740

Your timeline is little confusing because your story starts in 2017 and then fast forwards to 2016.

Maybe the mortgage adviser misled you, maybe he didn't. Halifax's lending policy isn't necessarily the same as it was 6 months ago. Plus you've loaded yourself up with more debt than you had 6 months ago.

NoTB

haha, unfortunately not. Naivety at it's finest :beer:

poppy10_2

NoTB wrote: »

We, maybe rather naively, loaded ourselves up with a huge amount of debt furnishing the house to a luxury standard (new build - didn’t come with finished garden, flooring etc etc.) which amounted to a small fortune of £30k....

I firmly believe I was irresponsibly advised

Who was it that advised you to take on 30k of debt furnishing your house to a luxury standard?

NoTB

Hi Pixie, thanks for the reply.

Apologies I was typing on my phone so must of hit the wrong button. Story starts 2017, fast forward to 2018*.

Appreciate what you are saying however what I'm stating it;

1, Mortgage advisor told me I could do XYZ with the mortgage six months after closing (i.e. 1st December 2018)

2. Halifax had no issue with the affordability -- we had went through all of the necessary affordability checks and my payments would have increased by c.£90 odd a month . Their policy is and always has been that they cannot extend further on a Scottish HTB mortgage which the mortgage advisor stated WAS possible.

Appreciate this is mostly down to my naivety just p*ssed I believed this guy.

Looks like a DAS to give me some breathing space in the meantime. No doubt I'll see you guys around here in some other thread

Cheers lads :beer:

NoTB

Nobody, my dear friend.

Buying a new build house I had little option as it came with no grass/drainage in the back garden, no carpets.. I could go on. Yes, I spent more than I needed however to complete what needed to be done would have still probably cost c.£15k+. Would have been more manageable if I had done that however when the 'expert' tells you that you can do XYZ you tend to follow their advice. In hindsight I would have waited the six months to add the 'luxuries' and speak to Halifax and have been told 'no' then while being debt free!

Lesson learned the hard way so guess it's time to get the preverbal finger out and sort the finances one and for all.