Mortgage worries, looking for some friendly advice

sparky23

Hello all, My partner and I have just came to the end of a 2 year fixed rate and our mortgage has jumped from 500 - 570!

We tried to remortgage and found out that I had a CCJ (is in the process of being removed) We really cant afford the 570 (500 was a struggle).

We can get another mortgage but the fixed rate is £570 with a £1000 arrangement fee! I personally dont see the point but im terrifed of the rates going up and being forced out.

Would someone also be able to explain ( in very plain terms) how the credit crunch might affect us? Im a bit worried as our neighbour has had their huse on the market for 3 months and has educed the price twice.

Thanks in advance for helping out a numpty! Lol

Jockthearab

Welcome to MSE Sparky23!

I'm no financial expert, but from what you've said the "credit crunch" is already affecting you, as the multitude of low interest rates & cheap borrowing that we enjoyed until recently, has dried up for now. As your neighbour is experiencing, selling property then becomes difficult as potential buyers may not be able to afford mortgages that cost more (like you are experiencing) than previously-lenders are now asking for bigger deposits and being more cautious who they lend to. It then becomes a bit of a vicious circle, where you either have to lower the asking price further or sit tight. Lowering the price further may mean selling at a loss...ultimately this is the crunch! I hope that maybe makes things a wee bit clearer for you?

Without knowing your full situation e.g joint income, outstanding mortgage, approx house value, any other loans/debt, the the experts here won't be able to fully advise you.

In the meantime can you either earn more to help pay your increased mortgage (overtime or even 2nd job/part time work?) or cut back on other areas (luxuries such as Sky/Mobiles/Eating out/Internet etc) to make life a bit more financially bearable?

Good luck.

JtA

jules73_2

Without knowing your full financial situation, it's not easy to tell how the 'credit crunch' will effect you personally. In fact, none of us do, but being able to afford the basics is the most important thing.
Also, are you paying a repayment or interest only?

dunstonh

It is worrying that a very small change in your mortgage costs £70 on a £500 payment is nothing unusual and you should have been budgeting for upto £750 as part of the typical range you would expect to see. That could still happen of course.

Would someone also be able to explain ( in very plain terms) how the credit crunch might affect us?

Jock has covered a lot of it. However, the increase in interest rate isnt really part of it. That happens and rates are still historically low. Availability of deals and ability to borrow are the key things that are impacted at present.

Im a bit worried as our neighbour has had their huse on the market for 3 months and has educed the price twice.

House prices are dropping currently in most areas and the restriction in ability to borrow is likely to see that continue. It may be 6 months, it may be 6 years. The full effect of the last house price saw 6 years of steady drops.

I suggest you visit the debt free wannabe section as I am concerned that you can find £70 a struggle on a £500 mortgage. As that isnt going to change and could get worse before it gets better you may find the peeps in the DFW board can assist you better than those of us who stick to this section.

sparky23

dunstonh wrote: »

It is worrying that a very small change in your mortgage costs £70 on a £500 payment is nothing unusual and you should have been budgeting for upto £750 as part of the typical range you would expect to see. That could still happen of course.


Jock has covered a lot of it. However, the increase in interest rate isnt really part of it. That happens and rates are still historically low. Availability of deals and ability to borrow are the key things that are impacted at present.


House prices are dropping currently in most areas and the restriction in ability to borrow is likely to see that continue. It may be 6 months, it may be 6 years. The full effect of the last house price saw 6 years of steady drops.

I suggest you visit the debt free wannabe section as I am concerned that you can find £70 a struggle on a £500 mortgage. As that isnt going to change and could get worse before it gets better you may find the peeps in the DFW board can assist you better than those of us who stick to this section.

Thanks everyone for all your advice, can you please tell me what the DFW board is?

homer_j_3

debt free wannabe board - go back to the main forum menu.

sparky23

Thanks everyone for all your advice, can you please tell me what the DFW board is?

sparky23

oops thanks a lot, Im not actually in any debt! but we dont earn a great deal so thats why our mortgage is a struggle.

beingjdc

sparky23 wrote: »

oops thanks a lot, Im not actually in any debt! but we dont earn a great deal so thats why our mortgage is a struggle.

A mortgage is a debt! Same principles apply unless you plan to sell up to clear it (and could).

Anyway yeah, more expensive mortgages, fussier about who they will give them to, and less choice. That's how the credit crunch will, and has, affected you. Good luck.

quietheart

sparky23 wrote: »

oops thanks a lot, Im not actually in any debt! but we dont earn a great deal so thats why our mortgage is a struggle.

loads of people who aren't in debt visit the dfw board, it's packed full of inspiration and helps you stop wasting money!

sparky23

Thanks all for all your advice, im feeling soooo deflated by the whole thing.
Im actually starting to hate my house! I want to leave but partner dosent.
I know if I push it we will end up splitting, just dont have any fight left in me.

As my gran would say: itll be all the same 100 years from now. lol