Moving to interest only

Bob_Jones_2

Im confused how you state its "their money"?

How do you rationalise that?

Are you referring to the payments or the original mortgage?

KarenBB

Hi Bob

I know lenders are getting really tight on going to interest only at the moment but reading your post says you pay £1251 a month, £200 of which is an overpayment so your required mortgage payment is £1051, interest only would be £610 which is £400 less than you have to pay at the moment.
Have you been overpaying for long? If have overpaid by £2400, could you use this overpayment to reduce payments for the next 6 months. If you have and you could that would avoid the underwriters.

OH has overpaid his mortgage and he can borrowback the amount he's overpaid or use the overpayment reserve for future payment which would reduce the amount in the overpayment reserve but give us a break when we need it just by reducing the monthly payments as and when we want to.

VIGILANT22

If you have a mortgage, this equals a loan.....From whom did you apply for the mortgage/loan....Who has a security/1st charge over your property for the amount you borrowed?

dunstonh

On what basis could a lender to refuse to revert a repayment mortgage to interest only?

a) they dont think you can afford it with a suitable repayment vehicle.
b) they no longer offer interest only mortgages

Bob_Jones_2

dunstonh wrote: »

a) they dont think you can afford it with a suitable repayment vehicle.
b) they no longer offer interest only mortgages

:j 34 posts later someone answers the question :j

getmore4less

Bob_Jones wrote: »

I am a director of a limited company and I currently get paid a salary. To preserve cash in the company I will reduce this salary by £1500 per month for approx 6 months. I am currently paying £1251 on a repayment mortgage with £200 being a voluntary overpayment. To reflect the fact that I will have a lower income I wish to reduce my mortgage payments to £610 (interest only).

This has got a bit messy for a £9k loan for a Director you should be thinking beyond the mortgage and if a 9k loan for the company is an issue then is it doing that well or in debt allready. reality is a £2646 loan is all you need is that also a problem?

Anyway

OK mortgage is a cheap way to do it but as has been pointed out a 0% purchase CC for 12months would probably cover the £441pm savings needed(food fuel etc) for the 6 months and be easily paid back in the 12(assuming your 6 months is realistic).

Most on a decent wage could get an overdraft for that if they were financialy solvent with only mortgage debt.


So be honest seems a lot of hastle to raise £2646 for a project, it is the sort of money sensible people could borrow out of their emergency funds if it was worth doing.

VIGILANT22

I think people have tried to tell you the whole way thru.....interesting how you take note of someone who isn't a mortgage advisor (no disrespect to dunstonh).....

dunstonh

interesting how you take note of someone who isn't a mortgage advisor (no disrespect to dunstonh).....

LOL. Thats how I feel on pension threads sometimes. Ignore the IFA and listen to Digger telling them to buy gold!

redpete

Bob_Jones wrote: »

:j 34 posts later someone answers the question :j

The first two replies said the same thing in slightly different words.

Thrugelmir

Leon_W wrote: »

Now, Thrugelmir is of the opinion that a huge amount of underwriting and "financial information" needs to be gathered in order for Bob to go interest only for a bit. I am of the opinion that there isn't.

So can you genuinely add anything here ?

Providing copies of previous years accounts and a forecast for the current year shouldn't be particularly difficult to provide in order to support an application for change of terms.