Unable to repay mortgage due April

singingdaddysgirl

Am getting conflicting advice with regard to being unable to repay our mortgage.
The five year term interest only mortgage is due to be repaid 10th April.
Basically we don't have the money. Our solicitor says the bank could cut up rough, whereas others in this forum have said that this is unlikey. We are in the process of putting our property on the market for sale and have informed the bank of this. The bank, HSBC, have turned us down for a re-mortgage ( we are in our sixties, low income) and are talking about a 12 month loan (no details yet as we haven't discussed this with them, anticipating massive interest rates!!). My feeling is maybe we could just sit tight and see what happens? The loan (mortgage) is £50,000 and the value of the house is £450,00. HELP please.

Cannon_Fodder

Equity release?

VIGILANT22

You should be aware you do not rcv advice here, it is only discussion and opinion...
I know you have posted the same on here several times.....you cannot depend on an internet forum to give you the answers you're looking for......
CF above has mentioned ER, this is something to consider, but you must see an adviser, read up on it yourself and discuss with your family if they think your property is their inheritance..You can start here....

http://www.ship-ltd.org/whatisequityrelease.aspx

Make sure the adviser is suitably qualified in Equity Release

I have read yr posts again and would just like to add once yr deal ends you will be paying around 165.00per month which from yr posts are affordable...keep up the payments, keep the bank informed and you should be ok.....But remember properties are not flying off the shelves!...good luck

magpiecottage

It is most unlikely that the bank will attempt to take possession of your home simply because the loan is due to be repaid, provided you continue to meet the interest payments.

From their point of view, it is an income stream that is secured on property with a far larger safety margin than they will get with most borrowers.

They also risk running foul of both the Financial Services Authority and (if you were to complain and they did not seek a resolution that was satisfactory to you) the Financial Ombudsman Service.

You may want to consider switching to a lifetime mortgage on which interest is rolled up if you cannot afford to maintain the interest payments - if so then you would need to speak to a specialist adviser but remember the interest will still accrue and eat into the equity.

singingdaddysgirl

Many thanks to all for taking the trouble to reply. We don't have a problem with interest repayments as we've been on an interest only tracker so the monthly payments have been very low, happily! Have found your comments regarding the FSA very helpful Magpie Cottage. We have tried to sort things out with HSBC but were directed to try for an HSBC remortgage which they turned us down on. This afternoon on the phone they are talking about a 12 month loan. We are waiting for an appointment to discuss this with them. I imagine the interest rates would be horrendous.

VIGILANT22

Have they explained how you fit the criteria for a 50kloan over 12 months but not the criteria to keep the mortgage going until you sell...as the latter would be the cheaper option by thousands!!....maybe you could ask this...

singingdaddysgirl

Good point! Thank you.

Leon_W

Have they written to you demanding repayment and the subsequent repercussions of not doing so ?

Perhaps leave the ball in their court. Continue to pay as you always have done and let them make a suggestion.

singingdaddysgirl

No, Leon W, they haven't sent a demand, just a letter/reminder in January of the date of Maturity of the loan in April. No mention in the letter of what would happen as a result of failure to pay up. I agree that it might be a good ruse to leave the ball in their court. I'm trying to persuade my husband that this would be a good idea! He's much more of a worrier than me!! Really appreciate all the help we're getting. MSE is brilliant and so is this forum.