Negative Equity - advice please

teabelly

Is it possible to go interest only until the erp time is up? It might give you enough breathing space to keep your head above water. Also your son needs to get a job asap or do the house up for you to make it saleable. If he doesn't want to do either then he needs his marching orders or he needs to find you a suitable lodger that would pay £60+ a week to help out.

It also might be worth posting your SOA in the DFW board in case there are any ways you can cut back or create extra income so you can at least keep the roof over your head until remortgage time. Sorry, just noticed you already have!

If you tell your lender you can't keep up repayments or are struggling and need to sell see if they will negotiate not charging the erc on the grounds that it will prevent you from selling, push you further into debt and create a repossession situation rather than just being able to sell and pay it off. They may also be sympathetic to you remortgaging to a lower rate which you can afford but that doesn't increase the amount borrowed.

chappers

I agree there are two things you can do speak to your mortgage company about re-structuring your mortgage(either change of product or a switch to interest only) and two find out for sure if you can rent to your son on HB and if not get him to rent elsewhere and claim HB so you can get apaying lodger in. Surely he will understand that the alternative is for you to lose your house or be forced into a sale you don't want.Better still tell him to get a job and contribute to the household finances.

PasturesNew

Rabiddog wrote: »

his £60pw quid dole money

At age 20 he wouldn't get £60.

Rabiddog wrote: »

£80pw rent

I think at his age, the max he would get is £43 room rate if he were renting privately.

The above is just my understanding of benefits/young people and if I am wrong, then fair dos.

Update: Just looked it up, there is something like this. "If you are single, under 25 and rent from a private landlord, you will normally only be entitled to enough Housing Benefit to cover the average cost of a single room in a shared house in your area. This is the case even if you have a place of your own. This rule is known as the single room rent."
http://england.shelter.org.uk/advice/advice-124.cfm#wipLive-26031-3

CYBERCIDERSAVER

Send your son to the Somerfield depot at Lea Green. There are usually jobs available.

gilligansyle

PasturesNew wrote: »

At age 20 he wouldn't get £60.



I think at his age, the max he would get is £43 room rate if he were renting privately.

The above is just my understanding of benefits/young people and if I am wrong, then fair dos.

Update: Just looked it up, there is something like this. "If you are single, under 25 and rent from a private landlord, you will normally only be entitled to enough Housing Benefit to cover the average cost of a single room in a shared house in your area. This is the case even if you have a place of your own. This rule is known as the single room rent."
http://england.shelter.org.uk/advice/advice-124.cfm#wipLive-26031-3

thanks for this, so what would happen in reality is that he would rent a room in someone elses house because he can't rent one in mine. Doesn't make sense, but hey, I don't write the rules.
A friend at the Council has told me about cases which have been successfully prosecuted by them. In one of the cases a daughter gave up her room and the parents took in a lodger, who was a friend of the daughter. The LA considered this to be a contrived tenancy. All 4 got suspended sentences and had to pay the HB back.

gilligansyle

teabelly wrote: »

Is it possible to go interest only until the erp time is up? It might give you enough breathing space to keep your head above water. Also your son needs to get a job asap or do the house up for you to make it saleable.
If you tell your lender you can't keep up repayments or are struggling and need to sell see if they will negotiate not charging the erc on the grounds that it will prevent you from selling, push you further into debt and create a repossession situation rather than just being able to sell and pay it off. They may also be sympathetic to you remortgaging to a lower rate which you can afford but that doesn't increase the amount borrowed.

Thanks for all the advice

Have asked the lender about interest only, they need proof of change of circs. Its hard to prove a negative, ie. prove that there is less income. So have sent everything I can think of and am waiting for their reply.

If doing the house up was as simple as a lick of paint etc. he would do it without question, but fitting new windows and front door is beyond him.

As house prices are stagnating, I feel I'm in a catch 22. ( And I'm probably not alone)House not in decent enough state to sell for good price, but would make enough for first mortgage and some of secured loan. But there is erp until next year. By next year I will have paid over £14,000 and the erp is £6000. Assuming I can carry on making the payments! If I sold, I could rent a flat for less than half I am currently paying, and give myself a chance to get back on my feet. But, I would still owe some of the money from the house and not sure if I could do that. Have an appointment with CAB on Tuesday so am going to check the situation out re:negative equity.

izzybusy23

gilligansyle wrote: »

I have posted on the DFW board as I am struggling financially. Everyone has been really helpful, but I wondered if someone could answer this question.

My mortgage and secured loan together are about £127500. There are early redemption penalties until April next year, so until then if I sold I would be in negative equity, especially with fees etc.

The repayments are over 2/3 of my income, because of the equity situation I can't remortgage.

So my question is:-
is owning a house all its cracked up to be?

I could rent a house like mine for half what I am paying. If I can hang on until next year that is. If I can't what is the situation if I sell for less than the outstanding secured debt. Can I sell for less than that?

No, owning isn't all it is cracked up to be. In this present climate you will probably find renting the same property significantly cheaper plus you have the added security of if the roof or central heating goes, they aren't your problem, its the LL's. Also if you find yourself without a job, the council are more likely to pay your rent for you. They will not help pay towards mortgages.

If you sell now and make a loss, at least your rent will be cheaper and you should be able to cover the shortfall from the money saved from paying the mortgage???

Good luck.

izzybusy23

gilligansyle wrote: »

I don't get HB as I am in full time employment, it is my son who is unemployed. The poster was suggesting that I charge him rent and give him a rent book and that he gets DWP to pay the rent. My response is to the fact that it would be HB paying the rent and it may be fraud.

I don't think you can charge your son rent and then claim HB for it. The council has a view that its close family and you should be putting them up for nothing.

seven-day-weekend

chappers wrote: »

I agree there are two things you can do speak to your mortgage company about re-structuring your mortgage(either change of product or a switch to interest only) and two find out for sure if you can rent to your son on HB and if not get him to rent elsewhere and claim HB so you can get apaying lodger in. Surely he will understand that the alternative is for you to lose your house or be forced into a sale you don't want.Better still tell him to get a job and contribute to the household finances.

The son will not get Housing Benefit if he is living in the family home.

Personally I think a lodger is the way to go, even if it means either the OP or her son sleep on the sofa.

Also restructuring the mortgage - could you make it a longer term and/or interest only for a while?

BMWobbleU

CYBERCIDERSAVER wrote: »

Send your son to the Somerfield depot at Lea Green. There are usually jobs available.

Is there? How much per hour do they pay?