move to interest-only temporarily?

miss_lisalou

I am desperate to reduce my unsecured debts but have been turned down for a loan by a couple of lenders. I have a C&G mortgage but only about £25k equity at present. Rather than taking the drastic step of selling my house to pay my debts and then rent again, I am considering asking for an interest-only period on my mortgage. However I have never changed my mortgage in any way like this before, and do not know of anyone who has.

Can anyone offer me basic advice about this: what is the criteria for a borrower to change to interest only? What impact would this have on my mortgage and on my monthly payments when I return to making full repayments? Does this have an impact on someone's credit score or is it not even shown on your credit file?

I have no idea what to do for the best. Any information would be appreciated.

beecher

Criteria will depend on the lender so you're best phoning them up to find out if they'll allow you to go interest only.

Have you posted a Statement of Affairs on the Debt Free Wannabee forums? They would help you to look at your household expenditure and advise ways of cutting down there, ie shaving money off grocery bills, ditching Sky/gym, selling cars. Rather than taking on a loan/stopping repaying the capital on your mortgage, you'd be taking the more positive step of cutting down on expenses.