Overstretched home "owners"

[Arthritic Toe]

From today's Mirror. Do these people deserve any sympathy?

Seven years after buying their three-bedroom terraced home for £100,000, Jonty Roberts and his wife have found themselves trapped by negative equity.

"Our original mortgage was for £95,000," says Jonty, 33. "But over the years we have remortgaged three times to help pay for a new bathroom, kitchen, replastering, oak flooring, our wedding and to keep us afloat while my wife trained as a teacher and I was a student nurse. We now have a £180,000 mortgage."

In April last year the couple decided to move from Norwich to London, so the house was put up for sale for £175,000. Weeks later, and with no interest in the property, the couple were advised to reduce the asking price to £150,000.

"There was no way we could sell at that price - it wouldn't have provided us with enough to pay off the mortgage," says Jonty, an outreach worker for a local authority.

So the couple decided to rent it out. They receive £595 a month in rent against a mortgage bill of £900. In October their current mortgage deal ends and payments will rise to over £1,000 per month.

"Having to pay that £300 shortfall each month, on top of our rent in London really hurts," says Jonty. "If we didn't have to find that cash, we could spend it on a new home for ourselves or just a better standard of living."

He adds: "The good news is that prices in Norwich have gone up in the last few months and friends say our house is now worth around £155,000. But sadly it's too late for us and we've missed the boat in London where prices have risen more steeply.

Joanna Dillon bought a two-bedroom house with her boyfriend three years ago - and has been regretting it almost ever since.

The £123,000 property is now worth only £100,000. And she is struggling to make the monthly payments after the couple parted and he moved to Australia.

"I feel very stupid looking back now," says Joanna, 22, a web data analyst. "But I didn't have a clue about mortgages and no one told us what would happen if house prices fell.

"Everyone said buying a house was the safest thing we could do, rather than throwing our money away on rent. Now I am in a right mess."

It looked so different in 2006. Then the couple couldn't believe their luck when they came across a house in Kendal, Cumbria, for £123,000 with front and back garden as well as parking.

A financial adviser arranged a 110 per cent mortgage with the Coventry Building Society for £135,000 which left £12,000 for household essentials with the rest going on a car for her boyfriend and clearing his debts.

"It seems the only way out is to walk away, allow the building society to repossess the house and declare myself bankrupt. I really don't want to go bankrupt, but I can't see any other way out."

The biggest regret James Clark has about the two-bedroom house he bought is the timing.

He bought the semi in Streatham Hill, South London, with a friend in September 2007, just as prices peaked.

"Almost as soon as we moved in, house prices started coming down and our home was losing value," says the 26-year-old telecoms software developer.

He and pal Chris Ostermann took out the cheapest fixed-rate mortgage deal they could find through a broker, buying the house for £250,000, with a 10 per cent, £25,000 deposit.

The deal is due to come to an end next month, but the property is now worth only £220,000.

In addition, Chris proposed to his girlfriend a few weeks ago and is planning to move out in 18 months.

Our Money expert Melanie Wright says.. Staying put until the market recovers is the best option

 

[severnside gull]

Sorry no sympathy really "no one told us what would happen if prices fell" - FFS whatever happened to her half a brain cell and the concept of personal responsibility?

 

[Cantona's Flying Dropkick]

Also, I don't have sympathy for the people make the mortgage payment at the end of the month and then go into arrears, ultimately ending with repossession.

 

[surrey jim]

feel more sorry for them than the property developers / buy to let landlords who are going belly up.

 

[surrey jim]

Also, I don't have sympathy for the people make the mortgage payment at the end of the month and then go into arrears, ultimately ending with repossession.

what difference does it make when the payment is made each month?

 

[Beach Hut]

Sorry no sympathy really "no one told us what would happen if prices fell" - FFS whatever happened to her half a brain cell and the concept of personal responsibility?

Sums it up for me as well, happy to take the profits as it goes up but then the minute it all goes wrong who can I blame ?

 

[Publius Ovidius]

surely it doesn't matter what its worth unless you come to sell it.

here is a novel idea....LIVE IN THE f***ing HOUSE.

OK there is always people who have to sell due to circumstances, however the days of buying to do up and sell is long gone....

 

[dougdeep]

And what about the interest rates? My monthly payments are £85 at the moment. Disgraceful.

 

[Wozza]

Sums it up for me as well, happy to take the profits as it goes up but then the minute it all goes wrong who can I blame ?

I think the people in the stories above were looking for somewhere to live rather than a profit?

 

[Deleted User X18H]

This is only the start!!!

 

[Tooting Gull]

I've got a lot of sympathy for them. Not everyone is a housing expert and has trousered tens of thousands from the value of their house, or put the 'profit' into their next home.

The threat of losing your home is one of the worst things you can face day-in, day-out for sometimes months or years, and sometimes you can just be unlucky with the timing of your purchase.

Lot of very smug, selfish people on this thread.

 

[johnnyrocketpants]

Caveat emptor.......

 

[Arthritic Toe]

I've got a lot of sympathy for them. Not everyone is a housing expert and has trousered tens of thousands from the value of their house, or put the 'profit' into their next home.

The threat of losing your home is one of the worst things you can face day-in, day-out for sometimes months or years, and sometimes you can just be unlucky with the timing of your purchase.

Lot of very smug, selfish people on this thread.

But why do they expect to have these things without paying for them?:

But over the years we have remortgaged three times to help pay for a new bathroom, kitchen, replastering, oak flooring, our wedding and to keep us afloat while my wife trained as a teacher and I was a student nurse. We now have a £180,000 mortgage."

 

[Beach Hut]

The people who used to lived next door to us had a 125% mortgage as they kept borrowing against their house for this or that or more likely paying off this or that credit card.

No sympathy at all.

 

[Gully]

what difference does it make when the payment is made each month?

Make the payment (plus all your bills) at the start of the month, in the few days after you have been paid, thus the balance left over is whatever you will have left to feed yourself and have fun with during the remainder of the month...therefore if you are a bit crap at budgeting ahead at least you won't have to worry about meeting your mortgage payment when the money starts running out.

Many, not all, people get into debt because they are either greedy (believe that they should have everything they want now, rather than saving for it), stupid (living well beyond their means) or can't run a budget properly.

 

[Cantona's Flying Dropkick]

what difference does it make when the payment is made each month?

It does when they spend on luxuries at the start of the month and don't have any left for the mortgage at the end.

 

[Beach Hut]

Many, not all, people get into debt because they are either greedy (believe that they should have everything they want now, rather than saving for it), stupid (living well beyond their means) or can't run a budget properly.

The majority is greed as people will not wait or save for goods or just over stretch on paying too much for holidays.

 

[Gully]

The majority is greed as people will not wait or save for goods or just over stretch on paying too much for holidays.

Agree with you there, it is also down to being bad at prioritising things...first has to come the roof over your head and food on the table...after that everything else is just detail, if you are feeling flush then it is nice clothes/car/holiday...if not, then the luxuries are first to go.

 

[Tom Hark Preston Park]

Always easy to be wise with hindsight tho eh?

Needs a few bankers to go to jail for crimes against society really.

 

[drew]

Dumb, dumb and dumber. A trainee nurse and a student teacher taking out a £180k mortgage. I wouldn't let him anywhere my kids classroom. They have spent an additional £85k in 7 years! Money they couldn't afford. I get fed up with newspapers printing these stories about dumb people who can't think for themselves. They take out a mortgage with the sole intention of taking advantage of the first two years fixed or discounted and don't give a toss about what comes next. There's nothing wrong with getting the best deal over two years but I have no sympathy for those that have now been stung because they can't meet the terms that follow that. You gambled and lost. Tough.