Mortgage going UP, Have to Sell

reidy100_2

Hi, Trying keep this as short as possible.

Basicly, 2 years ago got a self assesed mortgage, fixed rate coming to an end March, missed a few payments, Mortgage will go up £260 a month, Mort Consultant tried to get us a deal, no one will touch us, even current mortgage company wont give us a deal.

So I think we have to sell and rent a house for a while (have about £100,000 equity in property unless we get repossessed) However my missus wants us to consider Sell to Rent Back, I dont think this is a good idea personally,(she says they will even do the house up for us, old central heating, wiring etc??) Too good to be true??

Anyways If we have to sell, I cant afford the money for the Hip up front, I want to sell multiple agency, I know I can get a hip myself and supply this to the agents (£399inc vat)

Anyways the reason Im writing this is I hope there are some people on here who can guide me through the next couple of months as Im really worried sick about whats gonna happen
Advice ,Sympathy, Ideas suggestions and questions well welcome

Reidy

TBeckett100

I am not sure sympathy is due on a "self assessed" mortgage applicant who has borrowed more than he can afford, even on a lower rate.

However, you are not alone and the economy is bracing itself for more people like you. i would ill advise sale and leaseback schemes, the rent will bound to rocket after a while.

have you considered letting a room? personally, i would sell up (some agents pay for the HIP) and rent, with the interest on the equity subsidising rent. afterall, a resposession would certainly mean no one would touch you in the future.

brit1234

Self assesment is known to many as liar loans. It is one of the reasons for sub prime in the US and here.

Good luck with the sale, hopefully you may gain some equity if you price it right before prices fall further.

silvercar

With sell and rent back you will lose 20% of the value of the propert but, the sale will happen quickly.

I think that is too much equity to lose. Much better to sell yourself and find a property to rent. Market it through a decent agent at just under market value to encourage a quick sale.

I think you are doing well to tackle this problem before it gets beyond your control.

reidy100_2

TBeckett100 Ouch !! That told me

Ta for your reply, room letting is a non goer, I have heard if the agent pays for the Hip that it belongs to the agency, and want to go multiple agency as I need lots of people to see it advertised. The house is in need of "modernisation" so it will be £20k - £30k under the current comparable price for similar

Lotus-eater

You asked the same thing almost a year and a half ago and then you had £170000 equity in the property?

Debt_Free_Chick

My fear is that your credit record is shot - missed mortgage payments are about the worst thing you could do. There is nothing you can do to repair your credit record - you have missed payments, so that's that.

What to do next though?

The sale and rentback offers are not "as good as they appear to be". They might agree "to do up the property" but not for nothing. They will want to increase the rent to recoup their expenditure. And you will only have an AST for six months, so you cannot be sure that you will be there any longer. Google AST or visit [url=http://www.landlordzone.co.uk/]Landlord Zone[/url] so you can see the rights of landlords and tenants.

What mortgage deal are you on? Can you switch to interest only with the current lender?

Can you trim your other expenses to free up some money and pay off the mortgage arrears?

Selling might be your best option, but it won't be a quick fix unless you sell at the right price. Saying that you can't afford the money for a HIP is a real worry - are you living beyond your means, every month?

With your credit record, I think renting might be your only option. But you'll almost certainly need to pay six months rent in advance and I guess you can't do this. At least, not until after completion.

I really suggest you visit the Debt Free Wannabe board where you'll get practicable help about managing your bills and debts.

Debt_Free_Chick

reidy100 wrote: »

want to go multiple agency as I need lots of people to see it advertised.

With the right agency, you don't need to go multiple. A link to Rightmove is a must .... and pick the right local agent for your property. For example, no point in asking Savills or Frank Knight to market a £100k terraced home in a town/city

pinkshoes

Do you REALLY need to go multiple agency? You'll end up agreeing to a higher fee, and if a buyer contacts two or more of the agents (i.e views through one, buys through another - it does happen!) then you could end up paying the % fee to BOTH EAs!

Have you changed to an interest only mortgage?

I would suggest taking on a 2nd job for now (if possible), just to make sure you keep up with payments, perhaps even selling stuff on ebay too! Advertise with ONE good agent (look for signs in the street for agents selling similar properties, as if yours needs modernisation, it might draw alot of interest, and use that agent).

ps - never borrow beyond your means...

mortgage_broker_advisor

Your worried sick that you made 100,000 pounds in 2 years. Dump the place get out get into rented and bank the money. If you want a quick sell drop the price and get out before the lender reposses. If you are moving to rented you will not be part of a chain as well

slipp_digby

Lotus-eater wrote: »

You asked the same thing almost a year and a half ago and then you had £170000 equity in the property?

a hint of troll here me thinks too