Hi we have an interest only mortgage with mortgage express and have nothing in place to pay this at end of term which is approx 10 years we
have tried to switch to repayment but no equity in house and with no savings we are stuck for ideas any suggestions, we also have poor credit rating.
Couple of options, have you tried to downsize and reduce some of the mortgage or if things are really bad you could sell and move in to rented. Depending on your disposable income you should try and save or overpay the mortgage as most mortgages allow you to make overpayments of upto 10% each year without penalty and can start to reduce the mortgage and build up your equity. Hope this helps | 12.20.10 @ 20:23
A agree with Matthew, particularly his first point. What Matthew is saying is that there is no easy answer for you, and that this is something it is worth grasping now and starting again - downsizing or selling and renting are really worth considering, however painful those thoughts might be.
If you do have enough income to remain where you are (and you want to do so) then either pay off some of your mortgage by regular standing order if your lender allows this, or make regular savings. It would also be well worth your while trying to repair your credit history, if possible: keep all bill payments up to date, and keep your mortgage payments going. These steps will prepare you for the best eventual outcome and the most secure financial future. | 12.20.10 @ 21:20
Thanks for the help we do not really want to sell or move we are just able to pay our bills and have no arrears on mortgage. we also have a secured loan with Welcome finance of 17000 and it is due to end in 6 years, we currently pay 592 month to this and will off load these payments on to mortgage when it finishes, i will try to find out about an ISA also, do you know if these are available to people with poor credit history. I seriously need to work out a budget planner in the new year to see exactly where we stand.As apart from mortgage and loan also have approx 15000 worth of unsecured debt, any thoughts on debt management or do you think this is not advisable. | 12.20.10 @ 21:28
Hm, if you have no equity in your home then debt management or even an IVA where the secured finance is excluded might be an idea, but it certainly won't help your credit score. You may also want to consider the whole 'unenforceable credit agreement' route for the unsecured debt, but it's a maze, and not a nice one at that. I would suggest finding a good debt management counsellor and asking their opinion.
You haven't said how old you are, but assuming there is time then managing the unsecured debt within the terms on which you took it out should improve your credit score, and by the time the secured loan is clear (and hopefully the unsecured stuff too - or at elast massively reduced) then you will have a high score. Then overpay for a few years, and assuming there has been some house price inflation, and the markets have somewhat normalised you should be able to extend the term of your mortgage, either with Mortgage Express, or another lender.
Save like crazy, and hope for a miracle.... | 12.21.10 @ 09:19
Instead of adding to the excellent answers from John, David and Matthew, I would advise seeing a recommended Independent Financial Adviser or mortgage adviser, as it is difficult to provide a solution on your circumstances, even though you have given several facts about your situation. You should seek one who gives you a free consultation, and most do, however, please be aware that some IFA's do charge fees.
The IFA will listen to your concerns and should arrive at a sensible solution for you. | 12.21.10 @ 17:32
I would like to add a further point. I believe that debt counselling and debt management would be very valuable for you, and your first point of call should be the citizens' advice bureau. They have experts who can point you in the right direction, and do not charge a fee, behaving unlike some commercial organisation which perhaps do not always have your best interests at heart.
And do not despair, however desperate your situation may sometimes seem. All of us have answered your question because we are concerned to see you reclaiming your own future. I think that I can speak for all of us in saying that you are not on your own; you have taken an important step in confronting this issues and, with careful management and suitable help I am sure that you will join the many people who have emerged into the financial sunlight. Good luck! | 12.21.10 @ 21:51