HSBC refuse to allow me to go on to interest only. What can I do?

bglam

I have a Homestart Mortgage with HSBC - this is now 3 years old.

For the first 3 years the deal was to pay interest only and at the end of January 2010 it reverts to capital repayment.

I have spoken at length with someone from the Money Management team and they refuse to allow me to stay on interest only for a period of 6 months whilst I am experiencing financial difficulty.

On the 28th January the payment they take will be capital repayment - I cannot afford this without loaning it from family, which I really do not want to do as I could not ask them every month for this. I can afford the interest only part.

Has anybody had any experience of HSBC?

Is there any way round this?

If I go into arrears will they then allow me to pay only the interest only?

Any advice would be greatly appreciated! Thanks in advance.

_Andy_

They won't allow it - the whole point of Homestart is it's only IO for 3 years, not ongoing.
They may allow 6 months IO but will record it as arrears on your credit file.
Really if the payment is totally unaffordable you may need to think about selling/downsizing.

property.advert

Move all your money from HSBC. Move all banking arrangements from HSBC.

They have millions of people on interest only mortgages, something is not right here.

Move the whole mortgage to IO.

bglam

I cannot sell (or remortgage) - the mortgage is £83,500 and the house is now only worth £70,000 maximum.

Yes, I see what you say about homestart meant only to be short term (3 year).

HSBC will not budge on it.

Is my only option to allow the house to be repossessed?

bglam

property.advert wrote: »

Move all your money from HSBC. Move all banking arrangements from HSBC.

They have millions of people on interest only mortgages, something is not right here.

Move the whole mortgage to IO.

I don't have any further accounts with HSBC.

They will not allow me to move the mortgage to IO.

I am stumped as to what to do!

dimbo61

No its not your only option
You pay the mortgage first and then the council tax
No TV, no sky, no nights out, no takeaways,
If you end up losing the property you credit score will be destroyed for years
How much is the new repayment mortgage amount going to be
Have a look on all the forums on this website DEBT FREE old fashioned savings etc
Cut back on everything to keep a roof over your head ( this has been coming for 3 years )

Tuscan

i think many lenders are only doing interest only if you have a large equity in the property and can show how you intend to pay off the capital in the future. thats the case with my lender Nationwide. i asked and we have currently about 100k equity in a value of 200k and we were told no..guess it depends on what they think the value is.


as above cut back on everything else, mortgage and council tax come first..

bglam

I appreciate your comments but please don't jump to conclusions re: tv, takeaways, nights out and other luxuries etc. You really shouldn't assume that everybody is the same.

Trust me when I say that I am a firm believer that mortgage (or rent) come before everything else in life.

My situation (which I will not go into here) is quite unique. But may I say that I do not spend ANY money on luxuries. I do not (and have never) claimed benefits and am a single woman so do not have the luxury of splitting bills with a partner.

Perhaps then, I will see about moving back into my parent's house and renting this house out. (Although the rental income may not cover the mortgage and other associated costs).

I wasn't asking for a judgement on how I manage my finances as such...

I was simply asking if anyone had any dealings with HSBC and whether they had been able to move onto interest only.

Thank you.

dimbo61

I am not making a judgement but I have saved thousands of pounds over the last 4/5 years by following the advice from the GOD that is Martin Lewis.
Every single penny I spend is now better spent because of good advice on this website.
I saved £5k on my life assurance over the next 22 years simply because Martin told me how to do it cheaper.
Getting your home repossessed is not the answer !
Good Luck

motch

bglam wrote: »

I appreciate your comments but please don't jump to conclusions re: tv, takeaways, nights out and other luxuries etc. You really shouldn't assume that everybody is the same.

Trust me when I say that I am a firm believer that mortgage (or rent) come before everything else in life.

My situation (which I will not go into here) is quite unique. But may I say that I do not spend ANY money on luxuries. I do not (and have never) claimed benefits and am a single woman so do not have the luxury of splitting bills with a partner.

Perhaps then, I will see about moving back into my parent's house and renting this house out. (Although the rental income may not cover the mortgage and other associated costs).

I wasn't asking for a judgement on how I manage my finances as such...

I was simply asking if anyone had any dealings with HSBC and whether they had been able to move onto interest only.

Thank you.

How about a lodger? renting out the room if you have a spare one.

TEDDYRUKSPIN

bglam wrote: »

I cannot sell (or remortgage) - the mortgage is £83,500 and the house is now only worth £70,000 maximum.

Yes, I see what you say about homestart meant only to be short term (3 year).

HSBC will not budge on it.

Is my only option to allow the house to be repossessed?

This is why you will be staying on the capital repayment package. In order to go on to INTEREST only with HSBC, your Loan to Value ratio must be 80%. As you are now in negative equity, you will struggle to even more to another lender.

The only good point is that you will be on the HSBC standard variable rate at 3.94%. As your mortgage is post-2006, I believe you will be on this. Double check with HSBC.

As for debt management? I would be extra careful. Sometimes they may allow you onto interest only if you have all bank accounts with them but in your case, may be not. They are obliged to look further into this as you should raise this in WRITING. They will check how much you earn etc.

The only lucky point, I would arise! Is that your bank account is not with them! You would be even more skint when they put penalties for arrears!