I think we’re going to go bankrupt…desperate family of 4

berosej

We are desperately in search of some advice.

we have a mortgage of £409k, after some additional borrowing to complete a two storey extension. Due to delays from illness, planning and a bad experience with a builder, we are not finished. Nowhere near.

we had expected to be finished by now and have the house revalued which (due to the area we live in) would be a significant increase. The house was a two bedroom, and will be four with three baths once done.

our fixed rate is coming to an end on 31 March and we are now being told the lowest repayments we can get on a new deal with be £2150. A £1000 increase per month. We’re at around an 83% LTV. 

of course if we were in a position to have the house revalued then we’d be looking at an approximate 65%LTV.

Halifax have been incredibly unsupportive. We can’t afford that increase and we can’t even sell the house as it’s a building site.

is there anyone on here that has any sensible, non judgemental advice? We obviously should have gone for a longer fixed rate when we borrowed more but we did not anticipate being in this situation 3 years on. Or the catastrophic interest rate hikes in the last year.

born_again

Have you looked at any other providers?

Mark_d

When your fixed rate comes to and end, you could make a partial repayment to bring the LTV down to 60%.  This should allow Halifax to book you a cheaper rate.

housebuyer143

I'm not sure the rates at 65% LTV would be significantly lower than 85% tbh. 
Surely even if they revalue the house the loan you have to pay back isn't going to reduce so even if you finished the building work you are in the same position with higher rates? 

kingstreet

 (Removed by Forum Team)

TBH I couldn't see a great deal wrong with what was posted either. As we can't see Halifax product transfer options as they are borrower specific we're a bit blind, but I also wouldn't expect a massive difference between the rates. Although the argument that every 0.5% on £400k is going to be a fair old wedge, about £170 a month off a grand a month increase is better than nothing is a valid one!

Strummer22

berosej said:

We are desperately in search of some advice.

we have a mortgage of £409k, after some additional borrowing to complete a two storey extension. Due to delays from illness, planning and a bad experience with a builder, we are not finished. Nowhere near.

we had expected to be finished by now and have the house revalued which (due to the area we live in) would be a significant increase. The house was a two bedroom, and will be four with three baths once done.

our fixed rate is coming to an end on 31 March and we are now being told the lowest repayments we can get on a new deal with be £2150. A £1000 increase per month. We’re at around an 83% LTV. 

of course if we were in a position to have the house revalued then we’d be looking at an approximate 65%LTV.

Halifax have been incredibly unsupportive. We can’t afford that increase and we can’t even sell the house as it’s a building site.

is there anyone on here that has any sensible, non judgemental advice? We obviously should have gone for a longer fixed rate when we borrowed more but we did not anticipate being in this situation 3 years on. Or the catastrophic interest rate hikes in the last year.

Can you go for a longer term or interest-only for a bit until you're on firmer financial footing? You'll pay more in the long run but mitigate the immediate problem.

ACG

You could delay your retirement age and extend the term, if you decide to reduce your retirement age later down the line or wish to sell up you can do. That should lower the repayments. 

You could potentially find a lender who will do interest only. I am not sure if there are any at 85% LTV but you never know (the rate will be higher than halifax though), you could also potentially look at part and part (again will be a higher rate than halifax). 

The house will sell, assuming it is worth than £409k there is no reason for you to go bankrupt.

Speak to a broker, let them try to help you. 

NeverendingDMP

Hiya I'm not the most knowledgeable about mortgages but am a dab hand at being in debt 😂 Is the mortgage your only debt or is some of the works on credit cards and loans as well, are you in too deep and feel like you can't stop accessing credit just yet cos you still have no roof etc..or do you have the funds left to finish but its just the mortgage and its increase that you are expecting going to be the straw that breaks the camels back.
On the debt free wannabe forums we have people in all situations and something called a summary of affairs (soa) that will help break down your budget clearly to see what you can/definitely can't/could almost afford it you jiggled around some other costs.
Stick on here for mortgage and building advice but pop across to the debt free wannabe and we will gladly welcome you and hopefully offer support and some hints on making the pennies stretch further than you can imagine.

amnblog

Sounds like you are under 2% on the current rate. The new rate which is likely to be high 4%'s minimum is clearly going to lead to a much higher monthly payment.

3 things you can do

1. Speak to a broker as you will probably find they can access a wider rate of Halifax rates than you will find direct. Much better for larger mortgages.

2.Try to get a re-valuation from Halifax based on the extra floor space. A valuation over £550,000 will pull close to half a percent off your rate (again, best sorted via a Broker)

3. Consider carefully taking a six month interest only arrangement under the Mortgage Charter

MattMattMattUK

I agree with the previous posters who have suggested that LTV is not really going to make much difference, it will be marginal at best. The lower LTV might shave a little bit off the increase, but the unfortunate reality is that interest rates are significantly higher no matter what one's LTV is. 

berosej

Thanks everyone for the advice. I didn’t think we could go to another lender as we’re in the middle of the extension process? So when it comes to the valuation that would be tricky. Is that right?