Interest only mortgage

[Bolton1991]

Hi all,

I need a bit of advice , I took out a 10 mortgage in 2007 with Halifax for £330k on my house and due to the credit crisis my situation changed like many others, the mortgage comes to an end Oct 2017 and I have no repayment plan in place and will still owe £330k,, what will the lender do..? Will they take my house back or will they put me on a new deal..? The house is valued at £525k..

Any help appreciated.

[Debt Camel]

Re: Interest only mortgage

You have to repay the mortgage. Your current lender doesn't have to offer you a new mortgage.

This could be by :
- remortgaging with the same or different lender. It will almost certainly have to be repayment so it will cost quite a bit more than your current one.
- selling the house
- using money from savings
- taking it out of a pension
- equity release if you are old enough.

More details here: http://debtcamel.co.uk/interest-only-mortgage/

If you do nothing your house will ultimately be repossessed which would be a disaster. If you have no other options that will work, it is better to sell the house yourself than have it repossessed.

[Wingco]

Re: Interest only mortgage

Hi Bolton 1991
I'm in a similar situation with The Woolwich, except I'm 69. What is your age? Is it 25? (1991) My mortgage comes to maturity in Aug 2016 but they have granted a year's extension to Aug 2017. There are conditions on the extension and I'm being asked to sell 2 Buy to lets (BTLs) despite significant gross earnings on the BTLs of £20+K. (£165K balance and property value £320K)
My advice would be to contact your lender asap. seek a 2-3 years' extension (or renegotiate a longer term all together) but with an increased monthly payment if possible. As Debt Camel states, a full repayment mortgage, as you no doubt know is going to be astronomical.
It helps if you can offer some form of plan to pay the balance off in 2-3 years. My plan was an inheritance from an aged and infirmed m-in-l. But realising other assets, selling a business, an investment tool to cover the balance or writing a book on Mortgage debt, etc. can only help.
If you have no assets or other means of paying it off, why not go to another lender and seek a 20-year mortgage. why was it only a 10 year one? If it's your age and you were given a time limit, there are a few lenders now offering pensioner mortgages and one goes on to 85. But much depends on your credit rating - mine is death..
My conversations with The Woolwich advised that it makes no sense and is a very last resort to repossess, but clearly they are quite within their rights to do so. If you leave it until September 2017, they are likely to repossess.
Have you looked into PPI recovery - very easy to do yourself. Halifax/Lloyds applied PPI secretly, and are one of the worst mis-selling offenders; I never knew the PPI and mortgage protection policies were there - I've had in excess of £20K returned due to mis-selling. It has to be worth asking.
There are vast numbers of people in our boat and the lenders are being very obliging......so far. That's what they told me, anyway.
Keep us posted. Good luck.

[Openlaw15]

Re: Interest only mortgage

Hi all,

I need a bit of advice , I took out a 10 mortgage in 2007 with Halifax for £330k on my house and due to the credit crisis my situation changed like many others, the mortgage comes to an end Oct 2017 and I have no repayment plan in place and will still owe £330k,, what will the lender do..? Will they take my house back or will they put me on a new deal..? The house is valued at £525k..

Any help appreciated.

525k - 330k mortgage = approx. 200,000 in equity. By law you're allowed to pay your mortgage off - right to redemption. You have quite a bit of equity, so depending on your age and ability to pay the mortgage off at a future date, they may offer you an extended mortgage. They may try and go for an order of possession (take it off you), but you may also be able to stop this as the bank has adequate security (as aforesaid). If the bank were not successful in getting a possession order it may be a suspended possession order. If the latter happens it's effectively just as bad as possession order, will have limited remedies left for you then such as delaying bailiffs.