Urghh stuck and nobody offering any advice

[workiskillingme]

So when we got our mortgage in 2006 we needed to borrow a bit more with another loan from the same building society. Some how this loan got separated from the main part of the mortgage payment and we were paying x amount for that loan and x amount for the mortgage. Every few months they then said we need to pay more etc and we needed to do an income and expenditure then they would tell us what to pay. Fine. Fast forward to now they didn't alter our mortgage payment like they said they were going to and send us a default notice saying it's gone unpaid despite them saying the amount would be added to our existing mortgage payment .
The dilemma is we need desperately another bedroom for our son. If we can't borrow money to either move or get an extension we are screwed. I spoke to a financial adviser who was usually and gave no advice at all
What would people advise in this situation?
Thanks in advance

You need to sort out the loan before you try and borrow more money. How long have you not paid it for? How much equity have you got in the house?

Have you rang or popped down to your bank?
You need to be clear on the current situation.
Can you access any of the information you have online?
Do you have emails or notes about the arrangement you think was arranged?
What are your figures and what more do you want?

So you haven’t remortgaged since 2006? You must have been paying way over the odds for most of the duration of the mortgage, because rates fell very sharply in 2008 and remained very low after that.

How much equity do you have, what is the remainder of the mortgage and how many years do you have left?

I’m confused about them writing to you to say you have to alter payments…. The payment schedule for the loan and the mortgage should have been fixed, at least for the start of the mortgage

you need to firstly write to your lender and get copies of the annual statements for both loans, which will tell you how much the balances were, how much you had paid etc

If you have a financially-savvy friend or family member, you might want to ask them to help you go through all of those and see where things have gone wrong.

You can then work out why this loan has gone unpaid, and if it’s not your fault, try and have the default notice removed.

If you have got a default notice, there is an almost zero chance of you getting a mortgage at the moment.
You have basically shown the bank that you are unable to cope with your existing debt level, so there is no chance they will give you a bigger debt.

if you move and downsize, you might be able to get one but it will be from a sub-prime lender so will potentially end up costing you a lot more.

what is the desperate need for a bedroom at the moment? Can you have a temporary situation while you repair your finances?

It'll be hard to get any money with a recent default. I'd go and speak to the bank and find out what happened.

My two kids are 16 and 7 sharing a room. It's just not feasible. No money at all to do home improvements without a loan. I'm wondering if it would just be best to sell and rent at this point

9 years left on mortgage- equity of about 140k

If you sell, you are probably going to have to wait 7 years from the default before you’ll get another mortgage

that’s a long time to be off the housing ladder, especially given your eldest will probably have moved out by then

You don;t want to lose the £140k equity, you will never get back on track. Your children will survive if they share a room so I would stop thinking about the room/extension and get serious about resolving this issue. You must have records of making payments - on your bank statements?

So what would people suggest regarding rooms as they can't possibly share
Also wouldn't really lose the equity if we rented as we could save it?

And we could consolidate that debt with the equity

I agree. You need to stay put and think outside the box in terms of space. How about a pull out
sofa in the living room? A garden room? Will one of them be off to uni in the near future?

Garden is tiny .
All rooms are tiny. We have a conservatory so unsure if that could be used as another room?

Why not? I'd give it a try if it's warm enough.

I would leave your house and rent.
You would be paying off someone else's mortgage and as house prices go up you would find it hard to ever get what you want.
Have you got a two bedroom house?
Do you have the larger bedroom - could it be split in two for the kids and you take the other room.
What rooms do you have in the house?

That was meant to say I wouldn't leave your house!
Don't leave your house!!
Don't rent!!

It is better for your children to be sharing and secure than the alternative.

The cost of rent is likely to be a lot higher than your mortgage payment. Eldest could be at uni in a couple of years. It's not ideal but you need to get a handle on what you owe with this loan firstly.

Could but still wouldn't give the teenager the privacy he needs. Also only one window and only one possible doorway.

Have you looked at some of the really creative ways to separate bedrooms so that there are private spaces for each kid.

The teenager is keen to have the conservatory for a room however that wouldn't provide much privacy either as it's right off the living room

Surely you need to sort your finances out before you can make any decisions about your house. I dont really understand the situation youre in, when you took your loan or additional mortgage in 2006 surley you were told at the time what the monthly repayments would be? Obviously you must have been paying something back for all of these years?

First thing to do is to follow the complaints procedure fully.
I had a situation with Nationwide where they agreed to change the date our mortgage was paid not telling me that this created a short payment. 3 years later it was enough to build up when they then wrote and said we were 2 months in arrears.
Following the complaints procedure, they investigated and corrected our credits files, removing the information from our records.
Investigate that properly first.

You must resolve the loan issue. There's no way to move forward until you do.

Get all of your paperwork together. Get a copy of the payment statements for both the loan and the mortgage. Get the BS to give you a summary of what is owed on the mortgage and also on the loan.

If you've defaulted on the loan, what do they say your options are?

Work through everything step by step, in date order.

Once you've clarified your financial position, you can loom at your options - sell, extend mortgage, borrow from another source etc

You could work out your finances in a few weeks. Surely the bedroom situation can wait that long so you can make a decision with all the facts at hand.

How has all this suddenly become an issue? Did you ever remortgage? Have you run a credit check to see what your position is?

If your eldest is 16, are they planning on going to uni? If so, only 2 more years to go! It will take 6 months to sell anyway. So this is just another 18 months to go!

Why can't they share?

I had children who shared.