Interest only. PLEASE HELP.

bunnyboiler1

My estranged husband would like to put our current mortgage (which is repayment at the moment) on to interest only repayments. then when the house is sold, or when the mortgage is complete we will pay off the outstanding ammount with the equity in the house.

I'm not very good with mortgages but understand this will greatly reduce our monthly payments, what are other peoples thoughts?

Mrs_Bumble

Is your current lender happy to switch to interest only?

Is the aim to sell the house in the near future?

What is your estranged husband trying to gain from the switch?

bunnyboiler1

As far as I am aware our mortgage company is happy for us to do it.

The plan is not to sell the house for 9 years... this is when i believe he can make me sell as our daughter will have then left full time education.

What he wants out of it is more free cash a month as the payments would be much lower.

getmore4less

Seems sensible, he has equity tied up in the house but does not want to sink more money in at this time, if the lender will go for it then that should be OK to go interest only.

What is the estimate of the current LTV?

The only thing to watch is that the place does not get into negative equity since that could cause problems in the future that the sale will not cover the debt.

If the LTV is good then OK if not then it becomes a risk.

Trying_to_be_good

I can understand why he may want to spend the 'repayment' part of the mortgage payment on something else - presumably he's now having to pay for somewhere else to live?

You need to start making plans for what you will do when your daughter is 19, as if the house is sold you will (presumably?) get a share of whatever equity is left, after the mortgage is repaid, and need to find somewhere to live. Understanding your financial position, or saving now (if possible) will help you do that.