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I am in a pickle
FoolishChris
Posts: 9 Forumite
in Loans
My username says it all, I have made some very stupid choices and I am now in a complete riddle of a pickle. I don't actually think there is any way out, but I thought I might ask just in case.
Bear with me this might sound odd... but I promise you it is about loans/borrowing.
It all started in December 2019, when my son was diagnosed with Leukiamia. My wife had to give up work to care for our son, and the reduction in income was quite a shock. My mind worked too hard and I concocted a plan to replace her income with property rentals.
So we had already borrowed £90,000 for a house extension, which had not happened yet. I decided to instead invest it. I bought a run down ex-commercial property with help from a bank called ROMA, and off we went. I formed a Ltd company to buy the property, as it seemed like the best way to do it for tax reasons in the future. We paid £126,000 for the property, £60K or our money and the rest from ROMA. A professional quantity surveyor estimated the costs to turn this into three flats to be £90,000 and the finished properties would be worth £350,000 when finished. It sounded like the perfect project. The £30K we held back was the perfect contingency, and ROMA were going to fund all of the £90,000 build. After that we could enjoy the rental income, and may even get some of our money back when we refinanced.
It took a full 6 months for the purchase to go through, but that was just as well as it took that long for the Architects to carry out initial drawings, and for the structural engineers to carry out initial calcs. It took another 6 months for the architects to finish the full build drawings, then more structural calcs... and then the Partywall agreement started. This dragged on past Christmas due to one difficult neighbor, and we put in for an extension to the bridging loan with ROMA. That year was a continuous source of stress and worry as I chased people and was presented with bigger and bigger bills; which I paid.
ROMA seemed happy, and time kept going, and by March we seemed weeks away from being able to start, as the difficult neighbor seemed to have been dealt with.
Then out of the blue, we got a message from ROMA that they had decided not to extend our loan. They did not tell us much, so I called over and over, and when I finally got through to speak to someone they said we could sell the property, or refinance it, and that we had to start making arrangements.
Seemed fair enough. Then shortly after than receivers were appointed.
Because I was halfway through a re-bridge, they let things carry on. However I was advised to do it quickly, because companies house had been informed, which would result in our company being listed as having property in receivership, which might affect the bridging loan.
It seems things did not move fast enough, because my bridging loan was mysteriously retracted which even the broker could not explain. No one else seemed to want to offer me finance, so it seemed I just had to let the receivers do their thing and dispose of the property.
With all the "extension" fees and special penalties ROMA had added, the £65,000 they had leant me had grown to a whopping £100,000. Our property was valued at £125,000 so it seemed if they sold it cheap we might be lucky to get a little money back and draw a line under the lost money.
So fast forward 3 more months, and the receivers have put my property in 2 auctions and it has not sold. The time is elapsing fast as the auctions are always a month or so away... At the second auction they suggested the property may sell for as little as £80,000 meaning we would need to find £20,000 from somewhere. Though I would not have been happy about it, this was actually doable, and it would at least end the stress and worry we had faced for the last 18 months.
But the fees are increasing the balance by £3,500 each month, and if they sell our £125,000 investment property for even less than the £80,000 I fear they might try to take our home, or drive us bankrupt. I am literally in a constant state of worry, and it is making me feel sick every day. The best I can do is try to hide it from my wonderful wife and two little children.
I ideally need to borrow around £100,000 so I can pay off ROMA and put the property up for sale. But no lender seems willing to do that. We have around £100,000 of equity left in our own home, and in the current financial climate I can't get a mortgage to release it.
Here is the kicker, I have near perfect credit rating, and I have a good job. I could definitely afford payments of even maybe an extra £1,000 per month on top of what I currently pay out. But I just can't borrow anything from anyone, as loan brokers say lenders are not interested in this scenario.
I am desperate.... does anyone know anything that I don't which might help??
Bear with me this might sound odd... but I promise you it is about loans/borrowing.
It all started in December 2019, when my son was diagnosed with Leukiamia. My wife had to give up work to care for our son, and the reduction in income was quite a shock. My mind worked too hard and I concocted a plan to replace her income with property rentals.
So we had already borrowed £90,000 for a house extension, which had not happened yet. I decided to instead invest it. I bought a run down ex-commercial property with help from a bank called ROMA, and off we went. I formed a Ltd company to buy the property, as it seemed like the best way to do it for tax reasons in the future. We paid £126,000 for the property, £60K or our money and the rest from ROMA. A professional quantity surveyor estimated the costs to turn this into three flats to be £90,000 and the finished properties would be worth £350,000 when finished. It sounded like the perfect project. The £30K we held back was the perfect contingency, and ROMA were going to fund all of the £90,000 build. After that we could enjoy the rental income, and may even get some of our money back when we refinanced.
It took a full 6 months for the purchase to go through, but that was just as well as it took that long for the Architects to carry out initial drawings, and for the structural engineers to carry out initial calcs. It took another 6 months for the architects to finish the full build drawings, then more structural calcs... and then the Partywall agreement started. This dragged on past Christmas due to one difficult neighbor, and we put in for an extension to the bridging loan with ROMA. That year was a continuous source of stress and worry as I chased people and was presented with bigger and bigger bills; which I paid.
ROMA seemed happy, and time kept going, and by March we seemed weeks away from being able to start, as the difficult neighbor seemed to have been dealt with.
Then out of the blue, we got a message from ROMA that they had decided not to extend our loan. They did not tell us much, so I called over and over, and when I finally got through to speak to someone they said we could sell the property, or refinance it, and that we had to start making arrangements.
Seemed fair enough. Then shortly after than receivers were appointed.
Because I was halfway through a re-bridge, they let things carry on. However I was advised to do it quickly, because companies house had been informed, which would result in our company being listed as having property in receivership, which might affect the bridging loan.
It seems things did not move fast enough, because my bridging loan was mysteriously retracted which even the broker could not explain. No one else seemed to want to offer me finance, so it seemed I just had to let the receivers do their thing and dispose of the property.
With all the "extension" fees and special penalties ROMA had added, the £65,000 they had leant me had grown to a whopping £100,000. Our property was valued at £125,000 so it seemed if they sold it cheap we might be lucky to get a little money back and draw a line under the lost money.
So fast forward 3 more months, and the receivers have put my property in 2 auctions and it has not sold. The time is elapsing fast as the auctions are always a month or so away... At the second auction they suggested the property may sell for as little as £80,000 meaning we would need to find £20,000 from somewhere. Though I would not have been happy about it, this was actually doable, and it would at least end the stress and worry we had faced for the last 18 months.
But the fees are increasing the balance by £3,500 each month, and if they sell our £125,000 investment property for even less than the £80,000 I fear they might try to take our home, or drive us bankrupt. I am literally in a constant state of worry, and it is making me feel sick every day. The best I can do is try to hide it from my wonderful wife and two little children.
I ideally need to borrow around £100,000 so I can pay off ROMA and put the property up for sale. But no lender seems willing to do that. We have around £100,000 of equity left in our own home, and in the current financial climate I can't get a mortgage to release it.
Here is the kicker, I have near perfect credit rating, and I have a good job. I could definitely afford payments of even maybe an extra £1,000 per month on top of what I currently pay out. But I just can't borrow anything from anyone, as loan brokers say lenders are not interested in this scenario.
I am desperate.... does anyone know anything that I don't which might help??
0
Comments
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Can you summarise your debts and income. Then people may be able to help.
Ignore your pretend perfect credit rating. Your real credit rating is in the toilet from the sounds of it, so that needs to be your starting point.0 -
Sure thing.
So I have just over £5k coming in each month.
I have £1900 going out in bills/mortgage each month.
I have £375 going out in fuel each month.
I pay £1000 in three debts each month.
This leaves £1700 left. This would then be for clothes for kids, days out etc. and obviously more than covers it.
So forgetting the investment property and receivers things are quite healthy.
Its just the headache of how to get them off my tail....0 -
What are the total figures? Not monthly. Monthly figures are impacted by term.
0 -
The ironic thing is that my income was only £2800 when I started the project, and we struggled. But I have done well at work since and increased my income considerably. Had I known that would happen I'd never have done this!
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Also separate out personal loans from company ones.
They have different implications.0 -
All of the above is personal, I have no company loans other than the bridging loan we used to buy (which is the one the property has been repossessed to pay back).
Bridging loans add the interest to the total, which is due in full after completion.0 -
Do you mean total mortgage, debts etc?MorningcoffeeIV said:What are the total figures? Not monthly. Monthly figures are impacted by term.0 -
Total debt (by type and APR), annual income.0
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OK I'll post a list0
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Is business insolvency different from personal? Because I though with personal insolvency all fees, penalties and interest stopped. Have you spoken to business debt line?
But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll0
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