Mortgage shortfall - please help!!!

Hoppo75

Hiya,

I'm sincerely hoping that some of the fellow forum users on here can offer me some help or advice on what is now becoming a serious problem for my family.

Way back in the late 80's/early 90's, my parents were the victims of the 16% interest rate and got into difficulty with their mortage. Subsequently a remortgage was sorted (after a court appearance), on what my parents believed to be a repayment deal, having known that the endowment mortgage they had was going to fall way short of the original loan. My Mam had been making regular overpayments (she pays over the counter), when one of the cashiers questioned her reasoning behind doing this, as it 'wouldn't make any difference to the loan balance', which immediately set alarm bells ringing. I went to my parents to see a recent mortgage statement, and felt sick when I read the words 'Interest Only'. As a result, my Father has been in contact with Barclays, who have kindly offered absolutely nothing in way of support. My Father has also involved the ombudsman, who again, hasn't really proved to be of much help (due to the lack of info relating to the court appearance all those years ago). Now, to the sceptical, this is not a 'they must have known' type thing. I remember my father coming into the house after the court thing and I remember him telling me that while he'll be paying a little bit more each month, at least the house will be theirs at the end of it.
I guess what I'm looking for is some advice/help on what to do now. Renegotiating with Barclays to back track and reprocess the mortgage on what we know should have been a repayment would fix it, but I know they won't do this. The shortfall is going to be around the £38k mark, hence as my Parents are in their early 60's, and with only 3 years left to find it, paying the balance is looking unlikely (barring a remortgage, but they're 61 & 62, hence they'd be starting all over again).
Folks, I really don't want my Parents to have to sell their house, our family home of over 20 years, hence any advice on what options are available, or better still, advice from anyone who has been in this type of situation, would be warmly received.

Thanks,

Drew

staffie1

So they didn't know they were signing up for an interest-only mortgage instead of a repayment mortgage? They've never read the annual statements or any correspondence regarding the mortgage - of which there would have been plenty, and they don't know they're paying into a seperate endowment policy?

begbeer

Cannot understand if your mother has been paying regular overpayments as you said why the mortgage has not gone down a bit, where has that money gone, my mortgage is an interest only one but any overpayments I make come of the capital amount and my regular payment is lowered is this is what has happened with your parents and didn't they notice that they were then paying a smaller amount

beecher

They're going to have to find a way of getting hold of £38k - I'm not sure what you expect Barclays to do really as it is down to your parents not understanding the paperwork, rather than Barclays doing anything wrong. Options are remortgaging, taking on a loan or selling up as far as I can see.

EdInvestor

What happened to the endowment?

Gorgeous_George

Three options

1. £38K over 15 years at 6% would cost £320.67 per month. I'm sure many people pay much than that in rent.

or

2. Sell and buy something cheaper.

or

3. You buy it and charge rent. This option would free up their equity thereby allowing them to enjoy the fruits of their labour. However, there are downsides as well.

GG

Trollfever

They havn't looked at their mortgage statements for some 20 years?

Mrs_Bumble

Has the mortgage been with Barclays all this time? Please tell me not on the SVR?

If they have switched deals in the meantime then the paperwork would have confirmed interest only?

I don't see an issue with asking Barclays for a copy of the original mortgage offer?

If as you say that the remortgage was carried out at the time of the court case then there would have been court fees and charges etc, so the amount they would have been paying would have been more?

As above what happened to the endowment? did they cash it in or simply stop paying it?

maninthestreet

Overpaying on an interest-only mortgage would reduce the outstanding mortgage capital that has to be re-paid. Your parents need to find out what has happened to the overpayments that have been made over the last 15+ years.

furndire

I'm surprised they didn't have to have an endowment policy when they got the mortgage - I know we had to, even though they now tend not to pay off the mortgage. It used to be a condition of being given the mortgage. Have they been paying one, and not realised?

staffie1

furndire wrote: »

I'm surprised they didn't have to have an endowment policy when they got the mortgage - I know we had to, even though they now tend not to pay off the mortgage. It used to be a condition of being given the mortgage. Have they been paying one, and not realised?

This is what I can't understand about all this. If the people involved are so inept that they didn't read and understand what they were signing all those years ago, and don't know what has happened to all the money they've paid and overpaid, and apparently not read and understood all the paperwork / statements they've been getting then - what can be done?
They will have to find some money to pay off the mortgage and quick.

It would be useful for the OP to come back and explain a few things so we can understand the facts if help is what's required.