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  • FIRST POST
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 9:54 AM
    • 14Posts
    • 4Thanks
    CheerioCreditCards
    How to deal with end of interest only mortgage after completing DMP
    • #1
    • 5th Oct 17, 9:54 AM
    How to deal with end of interest only mortgage after completing DMP 5th Oct 17 at 9:54 AM
    Morning experts,

    Brief history - 90% of the way through huge DMP, should be fully paid off in just over a year. Have been in DMP since 2010 and have always paid on time.

    9.5 years to go until our interest only mortgage matures, (20 year term, have never missed a payment). Hopefully plenty of equity in the house. Mortgage is with Santander.

    But - how will we stand? Even though the equity in the house will pay off the existing mortgage plus extra, obviously selling up would leave us requiring another house. We could go smaller (kids have left home), but wed need another mortgage of some sort.

    Would Santander or anyone else even consider us with our past credit problems? We were aware the DMP would wreck our credit rating while its active, but once its paid off will it still affect us?

    Or alternatively might Santander extend the mortgage to save us moving?

    Sorry, rather long and I know its a long way off, but were ultra cautious nowadays!
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
Page 1
    • obay
    • By obay 5th Oct 17, 9:54 AM
    • 452 Posts
    • 329 Thanks
    obay
    • #2
    • 5th Oct 17, 9:54 AM
    • #2
    • 5th Oct 17, 9:54 AM
    How old are you?
    1/12/16 - 152,599.00
    11/11/17 - 145,990.00
    Two Credit agreements to pay off - 13653! (inc interest).
    Sofa (DFS) (0%)923/923 - Paid off 7th November!
    Barclays Boiler (18.9%!)400/3021.36
    Barclays Car (5.99%)0/8,832.37
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 9:57 AM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    • #3
    • 5th Oct 17, 9:57 AM
    • #3
    • 5th Oct 17, 9:57 AM
    Currently I’m 53 and husband is 56
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
    • obay
    • By obay 5th Oct 17, 10:07 AM
    • 452 Posts
    • 329 Thanks
    obay
    • #4
    • 5th Oct 17, 10:07 AM
    • #4
    • 5th Oct 17, 10:07 AM
    Currently Im 53 and husband is 56
    Originally posted by CheerioCreditCards
    What is left on the mortgage?
    1/12/16 - 152,599.00
    11/11/17 - 145,990.00
    Two Credit agreements to pay off - 13653! (inc interest).
    Sofa (DFS) (0%)923/923 - Paid off 7th November!
    Barclays Boiler (18.9%!)400/3021.36
    Barclays Car (5.99%)0/8,832.37
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 10:34 AM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    • #5
    • 5th Oct 17, 10:34 AM
    • #5
    • 5th Oct 17, 10:34 AM
    From memory it’s a 345k mortgage and we have a secured 60k loan against it.

    House should be worth at least 650k.
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
    • getmore4less
    • By getmore4less 5th Oct 17, 11:54 AM
    • 30,821 Posts
    • 18,429 Thanks
    getmore4less
    • #6
    • 5th Oct 17, 11:54 AM
    • #6
    • 5th Oct 17, 11:54 AM
    How much pm have you been paying on the DMP and the mortgage/loan?

    Even with 20y to 75yo looking at a min of 2,000pm
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 12:04 PM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    • #7
    • 5th Oct 17, 12:04 PM
    • #7
    • 5th Oct 17, 12:04 PM
    How much pm have you been paying on the DMP and the mortgage/loan?

    Even with 20y to 75yo looking at a min of 2,000pm
    Originally posted by getmore4less
    Mortgage payment is close to 1.3k pm, unsecured loan is 287 pm and DMP is 700 pm.
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
    • bertiewhite
    • By bertiewhite 5th Oct 17, 12:31 PM
    • 728 Posts
    • 768 Thanks
    bertiewhite
    • #8
    • 5th Oct 17, 12:31 PM
    • #8
    • 5th Oct 17, 12:31 PM

    9.5 years to go until our interest only mortgage matures.........................Even though the equity in the house will pay off the existing mortgage plus extra, obviously selling up would leave us requiring another house. We could go smaller (kids have left home), but wed need another mortgage of some sort.
    Originally posted by CheerioCreditCards
    Why would you need another mortgage? It looks like you'll have an estimated 300K to buy a house with outright and you'll be almost at retirement age anyway then.
    • getmore4less
    • By getmore4less 5th Oct 17, 2:28 PM
    • 30,821 Posts
    • 18,429 Thanks
    getmore4less
    • #9
    • 5th Oct 17, 2:28 PM
    • #9
    • 5th Oct 17, 2:28 PM
    Mortgage payment is close to 1.3k pm, unsecured loan is 287 pm and DMP is 700 pm.
    Originally posted by CheerioCreditCards
    What about the 60k secured loan.

    345k 1,300pm 4.52% 53% LTV
    405k 1,300pm 3.85% 62% LTV

    Why are you on such a high rate?

    At 60% LTV you should be on around 2%

    What's the current deal with Santander?
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 6:51 PM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    Why would you need another mortgage? It looks like you'll have an estimated 300K to buy a house with outright and you'll be almost at retirement age anyway then.
    Originally posted by bertiewhite
    Thought of that too, but due to our absymal financial situation during the crash, we have hardly any savings and my husband’s small pension wouldn’t be adequate to see us through retirement. So we’d need some of the equity money to live on.

    Also, even small houses in our part of the country are pricey. We are in the SW.
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
    • CheerioCreditCards
    • By CheerioCreditCards 5th Oct 17, 6:55 PM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    What about the 60k secured loan.

    345k 1,300pm 4.52% 53% LTV
    405k 1,300pm 3.85% 62% LTV

    Why are you on such a high rate?

    At 60% LTV you should be on around 2%

    What's the current deal with Santander?
    Originally posted by getmore4less
    The 60k loan repayment is 237pm from memory and, to answer your question about the interest rate, I have no idea. We were paying a fair bit more than that before the interest rates fell. We currently pay 1,294pm.
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
    • getmore4less
    • By getmore4less 5th Oct 17, 7:26 PM
    • 30,821 Posts
    • 18,429 Thanks
    getmore4less
    You need to have the details to hand if you want to sort this out.

    Amounts owing, rates, terms, payments.

    This should have been done in 2010 when you started the DMP and reviewed regularly.

    If that 60k is 237pm that 21 years+ term or is that interest only as well(4.74%)?

    Looks like you have been sitting on Santander SVR when you probably could have switched onto a retention deal.

    Review this ASAP could give you a head start over the next year.
    • clairebeth
    • By clairebeth 5th Oct 17, 8:05 PM
    • 140 Posts
    • 53 Thanks
    clairebeth
    Could you not change to a repayment mortgage on a significantly lower interest rate? Presumably your monthly payment won't change much if you change to repayment and get a lower rate? Or is this perhaps not possible on a DMP? I hope you haven't been sittingthe svr for too long, what a shame, that money could have paid off all your debt.
    • bertiewhite
    • By bertiewhite 6th Oct 17, 8:25 AM
    • 728 Posts
    • 768 Thanks
    bertiewhite

    Also, even small houses in our part of the country are pricey. We are in the SW.
    Originally posted by CheerioCreditCards
    Doesn't mean you have to stay there. West Wales is cheap.
    • haras_nosirrah
    • By haras_nosirrah 6th Oct 17, 1:44 PM
    • 1,327 Posts
    • 2,472 Thanks
    haras_nosirrah
    honestly if you retire I would sell the house and pay the mortgage off. If you can't get another house where you are you may need to move to a cheaper area of the country.

    If your husband has a small pension how are you going to continue to service a mortgage? If the plan is to stick some money in the bank to pay the mortgage what happens when the money runs out? If you are within 10 years of state retirement age most lenders go from retirement income rather than employed income if your mortgage goes into retirement age. If the new mortgage goes into retirement then either the mortgage will be too much on your pensions or if you manage to get another interest only they are going to want that money back at some point

    you are better off moving voluntarily when still relatively young and healthy and able to integrate into the community than being forced to go at an older age when it may be harder to move.

    see if santander will let you move to a new 5 year fix rate and save the difference, when your dmp finishes save the money or stick it in a pension - you can claim back tax relief, take 25% tax free and also get a bit more income to live on later.
    Last edited by haras_nosirrah; 06-10-2017 at 1:50 PM.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • CheerioCreditCards
    • By CheerioCreditCards 6th Oct 17, 2:21 PM
    • 14 Posts
    • 4 Thanks
    CheerioCreditCards
    Thanks for all the replies and advice everyone. Lots to think about, but one thing is for sure, we’re going to get the ball rolling sooner than later. I think the first port of call is to contact Santander and see what they suggest.
    Happy to have a wallet devoid of plastic!
    Happy to face up to my debts once and for all!
    Looking forward to being debt free FOREVER!
    (However long it takes )!
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