Nothing seems to apply! Advice needed.

greenfeed

My situation. Mortgage due in 4 years - over 65k left owing - having to pay interest only - part 65k is overdaught on open plan mortgage - injury in 1998 caused loss of job, now i have 2 part time jobs, equates to half previous salary - no savings - credit card on 0% for next 6 months 6k - no savings. Cannot see a way out apart from selling. All advice appreciated.

JonnyBravo

Not enough info to start suggesting things really.....

Current salary?
Current age?
Likelihood of getting another job over the next 4 years?

StuartGMC

JB
I agree; but in the first instance have these changes in circumstances been advised to the lender? Usually such a change would be a requirement to advise them about I think, and also it could allow reassessment and scheduling of the mortgage perhaps?

greenfeed

current salary £11000 + £2000. age 61 not much chance of another job.
Salary 1998 20k plus. outgoings rising, although credit card debt reduce from 10K over last 14months. Barclays have not been helpful in the past. Thanks for responding

StuartGMC

Thanks for the additional information. I think you need to seek professional assistance on this as soon as possible.

Can you move to a shared equity arrangement with a housing association as an example. leaving you with say, £15k to cover in the next 4 years on a repayment basis and them taking £50k ownership of the property?

Hopefully one of the more experienced MFWs will be able to offer some pointers.

JonnyBravo

Hmmm.... yes.... it's looking tough. You'll need to borrow past 65 it would seem.

How much is the house worth?
Is downsizing a realistic option.... perhaps not now, it is a very difficult market to sell in.... perhaps in a couple of years?

greenfeed

Thanks to both replies, I have considered both ideas over the past few months, I will have to seek advice face to face and i will post action plan.

Dithering_Dad

What sort of pension will you be getting when you retire, will you receive a payout from a company pension? If you have any sort of private pension provision you will be able to withdraw 25% tax free and could use this towards your mortgage repayment.

If you are reliant on state pensions only and in receipt of Pensions Credit your award can include help with your mortgage interest payments and certain other housing costs, including service charges and ground rents.

If you claim Pension Credit, help with housing costs can be paid straight away from the start of your claim. You can claim mortgage interest payments for a mortgage upto £100k, so in your case you're well under this limit.

Certainly you should look into what benefits you will be entitled to as a pensioner before you make a decision on your property.

Here is where I found out these details: http://www.macmillan.org.uk/Get_Support/Financial_help/Help_with_housing_costs/Income_support_for_housing_costs.aspx

As far as your mortgage provider, it is possible to have a mortgage when you're over 65 and especially if the provider knows that the interest is underwritten by state benefits.

greenfeed

I thank you for your input, As i am working i am not entitled to pension credits, my private pension will be quite small, but with the state pension inc i will possibly have to pay tax. So i will not get any benefits, not that I want them. Mortgage interest is only paid for 12 months in any case. I made an error in 1998 thinking that i would get back to normal and earn my previous wage, hence not advising mortgage provider.
Even though i have got this problem i feel that the bank with their offset mortgage plan should have noticed that i was out of my depth financially and called me in, instead they have let me accrue a £35,000 overdraught.
I am at the moment looking at the other suggestions that i have had, and then time will tell. Once again i thank you.

getmore4less

I would check the benifits now( http://www.entitledto.co.uk ) and for when you retire, first to make sure you are not missing any now(eg: working tax credit,council tax,,disability etc.) and you need to know exactly what your income is going to be in retirement and what benifits you will get by keeping the house or by selling and looking for alternative accomodation.

Depending on the LTV you may be able to get the bank to extend the term on interests only but only if you can afford it now ie, the OD is not getting bigger each month. This may not be possible so you need an alternative plan.

Your current problem cannot be blaimed on the bank, offset morgages are designed to work like this and allow you to use the offset saving and equity built up.

If the OD has build by spending more than you income you need to start budgeting and planing, without knowing what your income will be when you retire you cannot make any sensible plans long term.

Dithering_Dad

greenfeed wrote: »

I thank you for your input, As i am working i am not entitled to pension credits, my private pension will be quite small, but with the state pension inc i will possibly have to pay tax. So i will not get any benefits, not that I want them. Mortgage interest is only paid for 12 months in any case. I made an error in 1998 thinking that i would get back to normal and earn my previous wage, hence not advising mortgage provider.
Even though i have got this problem i feel that the bank with their offset mortgage plan should have noticed that i was out of my depth financially and called me in, instead they have let me accrue a £35,000 overdraught.
I am at the moment looking at the other suggestions that i have had, and then time will tell. Once again i thank you.

Sorry, I was looking at your age (61) and thinking that if you could just somehow struggle through the next 4 years (perhaps by going interest only and making some hard cut backs) you'd then be at retirement age and would qualify for pensions credit and the mortgage interest payments.

Pensions credit and the mortgage interest payments are a permanent benefit for pensioners, unlike for unemployed people who get Mortgage Interest relief which only lasts for 2 years.

You also get a new tax free allowance when you turn 65 and retire, it's about double the single persons allowance, and allows you to earn just over £10k a year tax free, so I doubt that you'll be paying tax as a pensioner.

Good luck though, sounds like you're stuck between a rock and a hard place