Going back to work - Interest Only mortgage

MaggieD

Hi
I have been bringing up my two children and receiving income support whereby my interest has been paid for as part of my benefits.
I am hoping to return to work soon but was wondering whether it would be possible to continue with the interest only payments as I would not be able to afford the full mortage (natwest) I expect I'd have to contact the bank to find out, but I wondered whether anyone else knew?

Mrs_Bumble

Is the current mortgage set up on an interest only basis?

Or have you been making the capital repayment part of the payment yourself in addition to the ISMI that the lender has been receiving?

MaggieD

It is currently set up as interest only

koexelek

You should be OK then. Most lenders seem happy for existing borrowers to remain on interest only, they are just not so keen to let new borrowers go on it

Mrs_Bumble

As above, but you will obviously need to start to think what is going to need to be done in relation to paying the balance off.

MaggieD

As the equity of the house has more than tripled over the years I think my only option would be to take it out of the total when its sold - or do you think that wouldn't be acceptable

Mrs_Bumble

Well that would depend on whether you are happy to sell the property at the end of the term in order to repay the balance?

Another option would be to start by overpaying once you are on your feet a bit more, every little bit helps it doesn't have to be big sums.
http://www.whatmortgage.co.uk/calculators/fleximortgage.html

When any current deal comes to an end you can look to switch to repayment at that point, depending on your financial circumstances.