Interest only mortgage

samandmillie

Does anyone know what the "rules" are regarding these? Do you ned to have an endowment along side it?

My mortgage is with Mortgage Express, we're on a great rate, 0.49% above boe rate so currently 1.99% and not sure if it will go down due to recent rate change. Anyway, my husbands overtime has been cut and his employers are thinking about putting them onto short days/weeks until business picks up (if it does). I was wondering what our options are, it would reall ease us financially if we went onto interest only for a couple of yrs to reduce our mthly paymenys and pay off some debts in the interim, do you think ME would allow this? If not, any other clever ideas? We don;t have any disposable income left as I've cut back as much as possible already.

Many thanks

Met_Bobby

You don't need to have an endowment policy with interest only.

opinions4u

samandmillie wrote: »

Does anyone know what the "rules" are regarding these? Do you ned to have an endowment along side it?

No, and if somebody tries to sell you one slap them!

My mortgage is with Mortgage Express, we're on a great rate, 0.49% above boe rate so currently 1.99% and not sure if it will go down due to recent rate change.

Sounds like it should.

Anyway, my husbands overtime has been cut and his employers are thinking about putting them onto short days/weeks until business picks up (if it does). I was wondering what our options are, it would reall ease us financially if we went onto interest only for a couple of yrs to reduce our mthly paymenys and pay off some debts in the interim, do you think ME would allow this?

If I was Mortgage Express I would wonder why you would prioritise other debts ahead of making your full and proper mortgage payments. They may or may not agree. If you do go down this route check with them how they record things on your credit rating first.

If not, any other clever ideas? We don;t have any disposable income left as I've cut back as much as possible already.

I don't know how big your mortgage is, but it sounds to me like you have had some massive reductions in payments already. The interest charged is probably a third of what it was 6 months ago.

While I appreciate that the overtime has stopped, has that really reduced the income by more than the savings you've just made on mortgage payments? (lesson for the future, always save overtime, never rely on it for day to day earnings - then use the savings for times like this).

Regardless of the answer, you need to look closely at every outgoing you've got and prioritise it.

Cutting back on the weekly shop (make a list and don't deviate from it), walking to places nearby instead of driving, turning the tap off while brushing your teeth, knocking the telly off standby, wearing a jumper instead of turning the heating up. Not having a holiday this year.

Good luck getting through tough times.

samandmillie

Thanks for your replies. I rang ME today and they said I can go onto interest only, it won;t cost me anything to switch, they will jut send me something in the post to sign. She said I didn;t have to tell them how long I want to go onto interest only for and can call back at any time to change back over.
My mortgage is my largest outgoing so if I could decrease just for a couple of yrs and pay of my loan/credit cards I will then be in a much better financial position and aim to overpay my mortgage to reduce the term. Totally agree what you are saying about overtime, unfortunately that's what boosted my husbands income and we did (stupidly) rely on it as we obviously didn't see this recession coming. Now just have to work out which cards to repay first.

Thanks again.

opinions4u

samandmillie wrote: »

Thanks for your replies. I rang ME today and they said I can go onto interest only, it won;t cost me anything to switch, they will jut send me something in the post to sign. She said I didn;t have to tell them how long I want to go onto interest only for and can call back at any time to change back over.

That's great news. Please don't make the mistake of being on interest only forever though. When the good times return make sure you take control of getting the debt down again.

My mortgage is my largest outgoing so if I could decrease just for a couple of yrs and pay of my loan/credit cards I will then be in a much better financial position and aim to overpay my mortgage to reduce the term.

There is a logic to this. Try not to build up the credit cards / loans again in the future.

Totally agree what you are saying about overtime, unfortunately that's what boosted my husbands income and we did (stupidly) rely on it as we obviously didn't see this recession coming.

Recessions are inevitable. They come. They hurt. They go. Mr Brown and Mr Darling didn't see it coming and they're paid to! No shame in not seeing it coming, but you can prepare better for the next one. 2016 is my prediction.

Now just have to work out which cards to repay first.

Are there any balance transfer options to 0% you can use? If not, find out which one has the highest interest rate and attack that first!