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Hi all, haven't posted in a while - terrible internet probs (changed providers to try and save some dosh - but have spent what I would have saved on phone calls to try and sort internet probs out! Ho hum!)

I have been thinking (dangerous I know!) and this may be a very long post so please bear with me (there's a lot of stuff going round in my head that I need to set free!!!)

My situation is this - I have an interest only (self cert) mortgage -£81k outstanding (£5K early redemption - up next month), secured loan of £25k. House valued at about £105-107k (only a 1 bed house). Currently paying about £880 per month for the mortgage and loan which equates to about 50% of monthly take home pay!!

As I am tied into my mortage until Jan - what is likely to happen to my rate? Will it go up? Or can I negotiate a different mortgage with them (not very likely whilst undischarged BR I know). The OR asked if I would be interested in buying back the BI and I said yes - but I haven't heard anything since about October.

My mortgage and loan payments are way too high, paying 50% of my income is becoming a strain (part of the reason i got into financial difficulty I guess). So I was thinking that maybe I would be better off just handing the keys to the OR and renting. I could rent a house in my area for around £550 per month saving myself about £250. If my mortgage payments go up again in Jan can I tell the OR I have changed my mind and no longer want to buy the BI?? If I did give the house over - would I be liable for solicitors fees, estate agent fees or any shortfall on the mortage/loan, or would any these be including in my BR? Also, the OR is still deciding whether I should be paying an IPA (they included overtime in their calculations - which I haven't earnt since). If the OR decides that I don't have to pay an IPA and then I decide to give the house over, would the OR then recalculate my I&E based on my lower housing costs? And what happens to the house once I give it up? Is it advertised in the local rag under "reposessions"?? I love my home but at the end of the day I'm beginning to resent it gobbling up all my hard earned dosh!!!! If I did hand it back and rent for a few years, I could probably save a bit for a deposit but how hard would it be getting back on the property ladder??? Would I need a larger deposit?

Sorry for so many questions!! It's been soooooo frustrating being off-line!!! Hope everyone's well and I'm gutted I missed the meeting in Cardiff (was on 3am starts tho and it would have been very rude of me to attend only to fall asleep and dribble!!!)

Sam
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Hi Brassiclinctus,

On balance I think that you should surrender the property but you would do this in consultation with the Mortgage provider, not the OR.

Your IPA would be affected by the saving in housing costs but I think that you would still be significantly in pocket.

Any shortfall in the house, after paying off the secured lenders would fall in to your bankruptcy. mortgagees tend to sell repossessions by auction and, as a result, the sale value tends to be low with costs very high.

Hi Catullus, thanks for the swift reply. But I thought that the OR now "owned" my house and therefore I should be dealing with him?? If I did hand the house back to the mortgage company - would I still have to pay the mortgage or could I just send them the keys back and move out (obviously having told them the situation first!!!) And what would I do regards the secured loan? Cheers.

Sorry for the delay.

Assuming that you own the property on your own then technically you are right. Legal title is actually "owned" by the OR,

But that ownership is still subject to the charges upon it and the mortgagees have the right to repossess, even over the OR, hence the reason why you should coordinate the surrender with the mortgagees, but I would inform the OR of your decision.

Chances are, that the mortgage company would want to agree a voluntary possession with you which involves you agreeing to surrender the property without court action and, in the meantime, there would be no legal requirement for you to continue to pay the mortgage.

The ist chargeholder would liaise with the second charge holder but out of courtesy you might want to inform them of your decision.

Many thanks Catullus.