Interest only mortgage advice

tp1

Hi All,

My current mortgage (Abbey/Santander) runs out in 3 months time and although I understand all the implications of interest only mortgages, I'm wondering if they will let me switch for a year or 2.

I spoke to someone from Abbey and they told me I would need to book an appointment to discuss it, but I don't want to make them think I can't afford the current repayments (because I can, and they actually get cheaper) and reduce any options in the future.

My current circumstances are that I'm employed earning £30k but also building up a p/t business which brings in about an extra £10k per year and the mortgage is for £141,000 (not much equity). My wife earns about £12k part time. My reasons for switching are purely to allow more money to be invested into my p/t business and also speed up the reduction of other debt. I don't exactly have any investment plans in place to pay off the full mortgage - although that's not to say I wouldn't start something - I guess I really would be viewing it as a short-term thing.

I guess what I'm asking is - do i need proof that I have a plan in place, or do they just want to warn me about the dangers? And if they do need proof, is a future inheritance valid?

Sorry for the rambling and thanks in advance.

_Andy_

How much is the home worth?

tp1

I would guess between £155,000 - £170,000 - I've lost track of house prices recently - it must have been close to £200,000 at it's highest.

_Andy_

They will decline it then - would need to be 50% LTV or lower for interest only with no repayment vehicle.

Thrugelmir

They will also know that you have other "debt".

Increasingly lenders do require proof of a vehicle to repay the mortgage. As diverting cash elsewhere does have implications in terms of your ability to finance your mortgage if the unexpected occurs.