Mortgage Prisoner

Username100723

Hi i have never posted before but am getting so desperate i am not sure what if anything we can do. We took out a self cert mortgage many years ago which has since been sold to a lender who does not offer new lending or products. We are already interest only and cant prove enough income to remortgage as we own our own company. Our mortgage has gone up from £800 per month to almost £2,400. We are absolutely desperate to keep our family home of 23 years. We are not behind on the payments but not sure how long we can continue at this rate. Any advice or help greatly appreciated.

kingstreet

First obtain your "prisoner letter" from the lender concerned and speak to an independent broker about your remortgage options.

ACG

When you say you cant prove enough income due to being self employed is that because you are leaving the profits within the business? 
If so, there are lenders who will work off net profit (rather than PAYE/Dividends). 

Username100723

We take as mich as we can already but our mortgage is £400000 and we are 55 yrs old. We would have to go capital and repayment and it would be higher than what we are now as over a shorter period. Even with retained profit we can't get there sadly. Thank you

grumbler

sunrisebushcraft said:

We are already interest only and cant prove enough income to remortgage as we own our own company. Our mortgage has gone up from £800 per month to almost £2,400. 

sunrisebushcraft said:

We take as mich as we can already but our mortgage is £400000 and we are 55 yrs old. We would have to go capital and repayment and it would be higher than what we are now as over a shorter period. 

Why shorter? I'm no expert, but I don't think you'll be able to get it for longer than 15 years. And even at the current 4.5% rates monthly payments are more than £3K. They may get smaller only if the rates drop.
Yes, it's really worth switching to a lower interest from your current 7%+ (?), but be prepared to higher monthly payments until you own the house.

born_again

sunrisebushcraft said:

Hi i have never posted before but am getting so desperate i am not sure what if anything we can do. We took out a self cert mortgage many years ago which has since been sold to a lender who does not offer new lending or products. We are already interest only and cant prove enough income to remortgage as we own our own company. Our mortgage has gone up from £800 per month to almost £2,400. We are absolutely desperate to keep our family home of 23 years. We are not behind on the payments but not sure how long we can continue at this rate. Any advice or help greatly appreciated.

Leaving aside the increase in payments.
How did you plan to settle the mortgage when you took it out?

In reality now you are looking at a rock & hard place.

Either you remortgage & clear that in the next 15 years (might get longer if lucky)
Continue to pay the high monthly repayments & stick to the plan when you took the interest only option. Hoping you can keep affording them.
Or sell & downsize.
But on the last option we have no idea of you personal family circumstances.

Flugelhorn

With a mortgage of 400K how much equity do you have in the property? would downsizing be an option for you?

Caz3121

when does the current mortgage term end?

michaels

You are probably better off than had you rented from a landlord rather than the bank.  Take the equity increase over 23 years as a win and live within your means.

dunstonh

We are absolutely desperate to keep our family home of 23 years. 

Realistically, based on what you have said, you are on borrowed time and you are going to have to make some tough decisions sooner or later.    What are you plans to repay, what is a significant mortgage?    

MWT

sunrisebushcraft said:

We are absolutely desperate to keep our family home of 23 years. We are not behind on the payments but not sure how long we can continue at this rate. Any advice or help greatly appreciated.

As per dunstonh above, time for the hard decisions it seems.

Everything hangs on how you plan to repay the £400k at the end of the mortgage term, and how long there is left on that term...

You mention having lived there for 23 years, do you have just 2 years left on the mortgage perhaps?

If there is an event which will generate sufficient cash to clear the mortgage due to occur before the end of the term, then it is just about how you get from here to there... ... but be realistic... if for example you need to sell the business to get the money, will you really be able to sell it for enough, and at the right time...?

... if there isn't a guaranteed event which will settle the mortgage then you are just pouring more and more money into a pit instead of selling up, taking the equity you have left (however much that is) and with that same money getting a repayment mortgage for a smaller property...

No point in continuing to struggle with this mortgage if you still won't be able to keep the property at the end...