Stop Bad Advice
Ending our fist time home buyer virginity seemed quite an achievement in the late eighties when my girlfriend and I decided to buy our first home. We got an endowment as buy to let mortgages weren’t available then but little did we know that disaster and the end of our relationship would follow so soon after what seemed like the beginning of our adult life together.
And So The Bubble Burst
In 1990 it all started to go horribly wrong as high unemployment, high interest rates and over spending led to a financial crisis in the UK.The manager of the bank requested a meeting prior to lending me the money I needed.
He gently suggested insurance against possible repossession.
I Saw No Real Alternative
As friendly as he tried to put it, I felt like my arm was renched high up my back. It was quite clear. Insurance = mortgage. No insurance means I keep living with my parents.Did I want the house or to stay living with my parents? That’s right I accepted the bank managers offer and took the insurance.If it all went pear shaped I had the insurance as backup. So why worry.If you are curious about how I survived this mortgage nightmare go to mortgage insurance and read how much the insurance protected me.
You need to check carefully how much cover your insurance policy provides.When it comes to investments as big as your home it’s worth getting all documents checked by a solicitor.I am not anti insurance just cautious after my experience with so called indemnity.If you want more advice why not check out the Hayes Mortgage Solutions website.
My 7.5% mortgage very soon increased to a massive 16%.It was very hard to make the payments and I really couldn’t see anyway out. What could I possible do to survive this?And when you have the very real possibility of unemployment too.
Simple! Stay Calm. Don’t panic. There’s always the back-up of the insurance and if I lose the house its just a house right, I can get another one when the market turns again. What’s the point in worrying about something I can’t control?
Yes I Was Repossessed
So what’s the plan when the inevitable repossession comes?Now I could have tried positive thinking to get me out of this mess but there’s positive thinking and there’s the debt that mounting while you practice thinking positive thoughts. All the time with one eye on the increasing balance. The negative balance. The one I would have to pay back. And who knows how long this will last. Could I actually end up bankrupt? At this point I’m still only twenty one.
The Mortgage Nightmare.
Needless to say many sleepless nights followed. And what sleep I did get was far from enjoyable. It almost seemed easier to stay up watching late night TV. Anything to keep from allowing my mind to visit my mortgage hell.
Quick Get Out The Insurance Policy – We need IT!
So did the insurance save me? Did it hell. The insurance it turns out was to protect the bank not me. It covered the banks cost of repossession my home! And that wasn’t the end of it either. Having repossessed my home the bank proceeded to sell it at auction far below market value. They then pursued me for the shortfall, some sixteen thousand pounds.
So I paid for the insurance and the bank got protection. You work it out.
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Posted by Carlos Sagastume on January 23, 2009. Filed under HUD Homes.
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