interest only mortgage

kajak

Hi,

I'm posting to ask for some advice on behalf of my parents.

A year or so ago they bought a house for £220,000 with the cash proceeds of the sale of their previous house. After living there for a while they decided to extend the property and to raise the money for that they had an interest only loan for £15,000 over 10 years from Abbey. My dad is 74 and is retired with a small private pension and my mum is 65 and does a reasonably paid part time job (that she is planning to continue doing for the next couple of years) and also has a small pension.

They need to raise another £5000 to finish off the work on the house and then to take a holiday. However, since they took out the first loan they've now been told that Abbey's terms have changed and that the oldest person in the joint loan needs to be under 75 when the loan finishes.

Their questions are, would my mum be able to apply for the extra amount in just her name, even though the property is in joint names? Or, is there anywhere else that they could apply to that would allow them to apply for this sort of loan over 10 years.

The reason that they have decided to go for an interest only loan is that in 10 years time they want to reassess their situation, and then either downsize the property, or take equity release to clear the loan.

Thanks, K

poppy10_2

Mum won't be able to get a mortgage in her sole name if the property is in joint names.

It's also very unlikely that any other lenders would be willing to lend to a 74 year old, particularly on an interest-only basis, as he will probably be dead by the end of the ten-year period. In fact given average life expectancy in the UK, he only has another 2 years. He really shouldn't be thinking on a ten-year time horizon.

GavB79

Jeez, that's the guy's dad you're talking about! Have some tact!
May as well say, "Sorry mate, don't buy him tickets for the Olympics!"