Mortgage worries

dodecanese

Hi again

With 3 weeks to go to BR Im beginning to worry about my mortgage. I have a main mort with HSBC, my bank acc is with First Direct ( owned by HSBC), with a £2k overdraft, up to its limit. I also have a large secured loan with First Plus - biggest mistake of my life. I have negtive equity on the property. The house and mortgage are is joint names with my sister. Left to me, I would look at vol repossession as First Plus and the house have become a huge weight around my neck. I am up to date with mortgage/sec loan payments and have never missed a payment. My plan is...I get paid around end of month- into First Direct, mortgages go out around 3rd of month- so they are covered for March. By about the 15th March, all standg orders/DDs will have gone- so I intend to draw out rest of cash- there wont be much and its for food,transport etc- and go BR on 17th March- my Co-Op acc is open and ready. Im doing it this way to try and ensure that all bills/mort are covered as smoothly as possible, the money I take out will be purely for living expenses- Im going to keep supermarket receipts to prove Ive not frittered it on purpose, and any left will go to my new Co-op account for the OR to take if he sees fit. I wont be increasing the amount of my OD as Ive been upto the limit now for at least 2 years and just live permanantly overdrawn. My questions are......
1.Will the OR be ok with me doing this?? I expect First Direct are going to be pretty upset and am assuming the overdraft will go into the BR- as HSBC have my mort can they try and add it onto mort/go for repossession?
2.My take home pay is £1094 and my mortgage payment- my half- is £720, which is high in comparison to what i earn. Could this mean Ill get refused BR? Ive seen a couple of comments on here that the OR could be unhappy with this- what could he do? Im worried s/he will make me pay less to the mort/sec loan- which would be a disaster for my sis.
3. First Plus- the rate at the moment is ok ( for a secured loan )- Im worried once they get wind of my BR theyll use it as an excuse to hike the rate up- they only seem to need the slightest excuse as it is now so Im concerned my BR will be another excuse for raising it.
Has anyone any experience/knowledge regarding the above??
Thanks in advance
Dodecanese

silvercar

1.Will the OR be ok with me doing this?? I expect First Direct are going to be pretty upset and am assuming the overdraft will go into the BR- as HSBC have my mort can they try and add it onto mort/go for repossession?

Some lenders have a clause in their agreements giving them the right to use the security offered for the mortgage (ie your home) as security for all other borrowing. If FD do have this clause then they could add the overdraft to your mortgage.

2.My take home pay is £1094 and my mortgage payment- my half- is £720, which is high in comparison to what i earn. Could this mean Ill get refused BR? Ive seen a couple of comments on here that the OR could be unhappy with this- what could he do? Im worried s/he will make me pay less to the mort/sec loan- which would be a disaster for my sis.

It will depend on the ORs view of your situation. I would have thought that you won't be refused bankruptcy but the OR may decide that your housing costs are too high for what you are getting. He could look at what the rental would be in your area for a property sufficient for your needs, if this is a lot less than your share of the mortgage payment he may decide that it is unreasonable to allow you such a high amount as a housing cost.

I don't know what will happen about your loan, it could be that the OR will say that it is not reasonable for you to be allocated money to pay that. If the home is in negative equity from the mortgage, there is no point in the loan company repossessing as they wouldn't get anything. I dont know if that means you could write off the loan in your bankruptcy while you still have the house, but if the house was sold or VR'd the loan would then be included in your bankruptcy.

I'm not an expert but these are just my thoughts.

It would be worth finding out the costs of a rental property, suitable size, in your area.

If he did reduce your housing costs, you could make up the mortgage payment from items in other areas of your expenditure.

dodecanese

Thanks Silvercar, sorry taken me a while to reply, not been well (cold) over weekend. am going to check this one out with Insolvency helpline. If the OR wont let me pay my half of the mort/sec loan theres no way my sis could cover it. Will look at other household bills as you suggest in case this does happen. Am now also seriously considering vol repo- possibly a bit drastic but this mortgage is so huge and all consuming it, and I can only see First plus getting more and more expensive.