Mortaged until he's 85

unknownforce

I found out today that my dad remortgaged his house when he was 61, on a 25 year mortgage :eek:. This now explains to me why when he hit 65 he applied to his company for an extension of employment (for 6 months).

He will not have sufficient funds to pay the mortgage when he retires from full time employment and is understandably under a lot of pressure.

I asked him if Northern Rock made any inquiries as to how he would pay the mortgage on retirement, he said they did not.

Clearly he should never have taken on such a responsibility, but at the same time this was totally irresponsible lending

Is there anything we can do to reduce the debt without him having to sell the house, or is it fully his responsibility?

I would really appreciate any constructive advice.

Many thanks

tanith

Someone will be along with the expertise you require.. just wondering what plan your Dad had in mind for paying off the mortgage when he took it out? I know there is some sort of plan for moving to an interest only mortgage that gets paid when the house is sold in event of the mortgage holders death. Someone will know more..

Henry_P_Chester

This is very irresponsible and typical of the lending of the last 5 years or so. Thankfully things are much more stringent now days.

I wouldn't have thought there wouldnt be anything you could do as the mortgage wasn't mis sold by the sounds of it. I'm not 100% sure though. Would it be possible to downsize to clear at least some of the debt?

Thrugelmir

Why did he remortgage the property?

Bullfighter

Prepare to support him financially when he goes bankrupt.

Before you dismiss me as being harsh, I'm in a similar position. My 60 yr old dad bought a house in 2006 on a 110% mortgage after remarrying.

The simple fact is that the baby boomer generation has only known house price growth, that's why they constantly promote 'getting your foot on the ladder' despite the obvious contrary economic signs.

Their paradigm is ending, and sadly many will get caught as the world slams in their faces.

dunstonh

Clearly he should never have taken on such a responsibility, but at the same time this was totally irresponsible lending

So, what did he do with the money he borrowed?

Whilst you may consider it irresponsible, he must have persuaded NR that he had the affordability to repay it. i.e working longer and perhaps a pension coming in. Or he may have just told them he wanted to hold on as long as he can until he decided to take on equity release to clear the mortgage.

Is he on interest only or capital & repayment basis?

getmore4less

remortgage at 61.

Did he borrow more than owed on the previous debt?

If he did what happened to the money?

If not could he have paid that off in time anyway?

unknownforce

Thank you for all your replies - i was too depressed to come back any earlier

D2007

Sorry to say, but I don't think NR will get the blame. They no doubt covered their backs with the small print saying he's a grown man and signed on the dotted line.

When you say remortgaged, do you mean the full amount of the property? If it isn't the full amount, then see what options he may have to downsize. It may not be ideal, but if it's possible, surely living in a smaller home is better than the worry and stress of working till you end up 6 feet under.

If selling up isn't an option, then consider renting a room out to increase the money coming in. If you do a search on this you'll find loads of details about it. Or even more extreme of renting the entire house and him living else where that is cheaper. So the mortgage gets covered - although he may need to change his mortgage if he does this.

Do look at the mortgage he has, as you may be able to find a deal that offers a better rate. See a financial advisor - again look at the guides on this site for the way to do things.

Hope things work out right your dad in the end.