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Between a rock and a hard place

 
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Enilorac



Joined: 20 Aug 2009
Posts: 2

PostPosted: Thu Aug 20, 2009 4:26 pm    Post subject: Between a rock and a hard place Reply with quote

Hi all

First post here, but hopefully not the last....glad to have found you all BTW Wink

Hubby & I bought a 200yr+ stone cottage, in need of full restoration, 5 yrs ago.

We negotiated a renovation mortgage, which covered the purchase cost, and the cost of minimum improvements needed in order to make the cottage habitable. The idea, or agenda if you like, as far as we were concerned was always to borrow only what it would need to be able to move in, and then finish the place off once we were in, so to speak.

After purchasing it, we drew down the money to replace the roof and to do a couple of other small things that needed immediate attention. We then put the place on hold for a few years due to various reasons.

We're now back and raring to get back in to it, not least because right now paying mortgage *AND* rent is killing us.
There is 16K left to draw down on the original agreed mortgage amount.
We got fresh quotes from electrician, plumbers, heating engineers etc, and their totals came to 11k, giving us 4k contingency funds to draw down if needed.

So, off we trotted, back to the mortgage company....who we find have since been absorbed into a larger banking corporation, and no longer do mortgages and have declared our renovation mortgage agreement as null and void. Basically they won't let us have anything.

So now, as we see it, we are all stuck....the mortgage company claim we're in negative equity, which is possibly fair enough, although we don't plan to sell (or default on payments!), and despite the fact that their appointed engineer/auctioneer is currently offering properties in worse condition for 3 times what he claims ours is currently valued Mad So as they see it they are hypothetically stuck with a property not worth what they've so far lent us (highly debatable IMVHO)
And we're stuck with a property we can't live in or afford to finish, because they won't give us what remains on the previously agreed amount.

We don't want to take out a short-term bank loan as the monthly repayments would totally negate any benefit we would previously have gained by stopping the rent payments (a gain we planned to spend on the cottage as we went along, once we were in a position to move in)

So, what options, if any, do we have right now?

- second mortgage to cover the 11-16k?
- move the whole mortgage somewhere else and re-negotiate?
- long term (20 yr pref) loan? Who does these?

I guess a lot of it is to do with the dreaded *R* word Crying or Very sad

In a bit of stew about it all right now, to be honest, so I've probably left a few details out, if it doesn't make sense or you have any queries, shout them out.

Any other suggestions as to where we can go for help here?
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Aces up



Joined: 24 Aug 2009
Posts: 2

PostPosted: Tue Aug 25, 2009 10:21 am    Post subject: Reply with quote

Hi there and I'm truly sorry for your up set with these Bankers with a W. All I can suggest is for you to go to your local credit union with your hubby and sit down and tell them what your problems are.

They will offer a friendly ear and as long as you and hubby can meet with payments I'm sure they will go with you on this matter.

There are also grants out there for the insulation of property's so why not check into these. Look into Government grants for these information projects.

Main thing is your not robbing anyone so don't be worrying to much, things will come right in the end, good luck.

Take it from me I'm a survivor!
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Enilorac



Joined: 20 Aug 2009
Posts: 2

PostPosted: Tue Aug 25, 2009 11:34 am    Post subject: Reply with quote

Hi and thanks for your reply

We did wonder about the local CU, but neither of us are presently members, and wondered if they would give out loans to shiny newbies....wouldn't we have to have been members for minimum period and/or have a minimum amount of savings/shares? (Not entirely sure how CUs work to be honest)

A small update on the situation, but not necessarily a promising update.

We contacted the head office of the organisation, and on two seperate phonecalls we spoke to to seperate peopl who said that they could not see a problem with realeasing the funds to us. They were to contact our local office and ask them what they were playing at.
Head office have since contacted us to say they have passed our case on to another internal department for more investigation (???)
Meant to hear back from within the next couple of days....they wouldn't expand on what 'further investigation' means.

But, the way I see it (perhaps I'm hopelessly niaive?) is that we have an agreement on the total amount to be borrowed. Surely they just can't change their minds on this? After agreeing the full amount?
We have a signed agreement on the total amount!

Is it worth looking into the services of the financial onbudsman?
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