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Increasing the Mortgage Term

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
11 replies 1.2K views
MoneyQueenMoneyQueen Forumite
926 posts
edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
Hi,

DH has been told last week that some of the employees would be made redundant in his department. I have been told the same today.

If the worst happens and we both are made redundant, can we ask our lender to increase the mortgage term or make the mortgage interest only. We haven't done many overpayments till date (only £1000 till date).

Has anyone done this before?

Thanks

MQ
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Replies

  • sassybluesassyblue Forumite
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    Hi MQ sorry to hear this bad news for you, l'm sure your lender will let you switch to interest only, they may charge for this, l was told £100 for the switchover on our old mortgage, although we never did it.

    I really hope you and DH don't get rendundancy x


    Happy moneysaving all.
  • Queen-Bee_2Queen-Bee_2 Forumite
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    Hi MoneyQueen - hopefully neither of these eventualities will affect you or your husband. If your mortgage is less than new full one, I'd have thought your provider would be flexible - Nationwide is incredibly flexible - but I guess it also depends on the product. Good luck!
    QB
  • MoneyQueen wrote: »
    Hi,

    DH has been told last week that some of the employees would be made redundant in his department. I have been told the same today.
    If the worst happens and we both are made redundant, can we ask our lender to increase the mortgage term or make the mortgage interest only. We haven't done many overpayments till date (only £1000 till date).
    Has anyone done this before? Thanks MQ

    Do you no have insurance in place to protect against redundancy? It is amazing the amount of people who do and are unaware of this. So pls check this. If you dont have it, it is too late now to arrange this as potential redundancies have been announced.
    Does your mortgage allow for payment holidays? Some allow a payment break of x amount of months. If you are unsure of this, call them and check.
    Also when you call ask the criteria for changing to IO...
  • Thanks everyone for replying. I will phone my bank tomorrow and enquire

    Vigilant22, We have got enough savings that we can easily pay our mortgage/ bills for many months if required. I was asking only because I would want to keep the savings secure if in the worst case we don't get a job soon

    MQ
  • You are doing the ight thing..preparing for the worst scenario...may it never happen...good luck...any probs post on motgage board...
  • uzubairuuzubairu Forumite
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    I'm sorry to hear your news.

    Hopefully you won't be affected (I've got my fingers crossed for you).

    I don't know who you have your mortgage with, but the Nationwide (who I have my mortgage with) have several flexible options such as payment holidays, increasing the term, using the Overpayment Reserve and going onto interest only.

    I hope it doesn't come to that, but planning for the worst case scenario now should put you in a better place whatever the outcome.

    Good luck.
  • dimbo61dimbo61 Forumite
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    Wether Your lender will allow you to extend the term or go interest only will depend on several factors
    LTV and your ages
    The more equity that you own in the property the more inclined the lender will be to allow you to go IO
    The younger you both are the easier it would be to extend the term ( upto 65!)
    If you do get made redundant and find other jobs quickly consider using the redundancy money to overpay the mortgage.
    The nice benefits people expect you to live off your savings if made redundant and you have over £16k in savings or redundancy money.
    Is your mortgage tied at the moment ( IE fixed with limited overpayments !)
  • edited 27 January 2010 at 9:52PM
    MoneyQueenMoneyQueen Forumite
    926 posts
    edited 27 January 2010 at 9:52PM
    Thanks Everyone for your kind words. I am so scared at the moment as there are not many jobs in the market

    Both are us are in our early thirties. The house is valued at £140000 and our balance atm is £95000

    The mortgage is life time tracker and we can overpay whenever we want.

    I didn't call the bank today as there was something that I wanted to clarify before I tell them.

    Can they change my mortgage product if I tell them (I am on a very good deal atm) because I am a risky customer at the moment and they are worried that I won't be able to make overpayments even if I don't agree. My mortgage term was 12 years when I got the mortgage and has now 10 years left

    MQ
  • Queen-Bee_2Queen-Bee_2 Forumite
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    Hi MQ - Dimbo has a point. Have you thought about using your savings to pay as much off the mortgage as you can right now? This could enhance your LTV and widen your range of options. Just a thought. QB
  • dimbo61dimbo61 Forumite
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    You are not a " risky" customer at the moment !
    You have a good LTV 75% and have paid the mortgage every month YES!
    If you do get made redundant then dont worry too much
    You have been sensible and built up savings plus any redundancy money will
    tide you over for some time while you find another job.
    You are on a life time tracker at a good rate at the moment ? and dont want to lose this.
    When you get a new job depending on savings rates and your mortgage rate consider paying some of the redundancy money off the mortgage ( if you have any left).
    You dont have to make any overpayments at all
    You only need to make the normal monthly mortgage payment GOOD LUCK
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