I think I'm Trapped - can anyone help?

centralexpert

Hello,

My situation is this:

My girlfriend and I have eneterd into a 50% shared ownership program (which don't get me wrong I am very happy with).

We were advised by our mortgage advisor that the best mortgage for us would be with Prefered Mortgages due to my poor credit history (and large bonuses for the affiliate, so I hear).

With us being wet behind the ears we said ok and took out the mortgage at just over 7% over 35 years.

1.5 years later we are struggling to make ends meet and I can see us slowly getting into a hole.

I have checked the terms and conditions to see about early cancellation fees and If we cancel before Feb 2010 we are subject to a 6% surchage.

My question is would it be worth trying to get out and re-mortgage to get a lower rate?

Is anyone able to offer me some advise on this please?

Your suggestions will be greatly appreciated.

Regards

Central

grogdog

why not try to change to interest only with your existing lender until you are out of the deal, if you are still not able to afford at this stage you are going to have to sell up and start renting again.

minimike2

I dont think you will be able to. As far as I can remember Preffered *were* the only lender that did shared ownership doe people with adverse credit. I say were because they have now stopped lending.

Has the place gone up in value enough to sell it and pay back the mortgage plus penalties? That might be the only option if it has. Or you could look to put the mortgage onto interest only for a bit...

Conrad

Shared ownership remortgages are available now only to applicants with good credit history and status.

Sorry.
The rate your paying is not ott. Im finding myself quoting around 7% much of the time now and that for prime lenders. Lenders such as Halifax are offering existing clients rates around 6.7% to stay with them, lower if the client has more equity.

centralexpert

Hello,

Thanks for your info.

I believe the property has gone up in value due to similar properties selling around me.

I don't however believe that it's gone up enough to cover the 6% penalties.

I shall have it valued anyway out of interest to see if its possible.

I will also have a look into switching to interest only.

Thanks Again

dimbo61

try and hang on in there
you have managed for the last 18 months and things may be better in
feb 2010.
try your best to pay the mortgage on time each month and build up a good
credit history and therefore credit score.
by feb 2010 you may have even more equity in your home and your income
may have improved. live the MSE way and try to get best value out of everything you pay for GOOD LUCK

centralexpert

Hello,

Thanks again for your reply.

We have made sure that all payments toward our mortgage are on time and for the full amount, for obvious reasons.

I have checked with them to see if I could switch to insterest only and they say unfortunatly not.

I was wondering whether we could sell up and move the mortgage to another property on 100% instead of part ownership.
You see we are paying in excess of £300 service charge and rent for our property at present on top of our mortgage.

Do you think they would add a 6% penalty for doing this?

CRUISEMAN

At the moment they are very few 100% mortgages around and those that are probably charging more than the 7% you are currently paying. They are also only available to customers with a good credit and payment history.I also doubt that Preferred will waive the 6% Early Repayment Charges.I suspect that your only option is to stick with it.

chappers

Looks like you are going to have to stick with what you've got.
My only advice would be to try and save on other outgoings until 2010, try the DFW board for advice on cutting back.Try and keep your heads above water until you are out of the penalty period and then reasses your situation, many things could change by then.

poppy10_2

Sounds like you are pwned, I'm afraid. Can't see any way out of this one.

UK007BullDog

Did they say why you cannot go Interest Only?

Otherwise second job, try budgeting and seeing if you can cut out costs.