interest only mortgage extensions for over 65,s

jimmyteabag

Hi, i am a 58 year old male who was diagnosed last year with luekaemia and have a £106000 outstanding mortgage.
My equity in the property is around £200000.
My mortgage interest is paid by dwp.
Any suggestions as to how i could extend my mortgage which is up at the age of 65 so i dont have to sell up and move?
We are at our wits end and totally stressed out.

TonyMMM

jimmyteabag wrote: »

my mortgage which is up at the age of 65 .

Can you explain this a bit more ..

Do you mean your current deal expires (in which case you would probably just go onto your lender's SVR) or;

Do you mean the mortgage term is up and due for repayment (after 25 yrs or whatever) ..in which case, what type of repayment vehicle do do you have in place (Endowment, ISA, Pension etc. ?)

dunstonh

Assuming you have no repayment vehicle in place (you dont mention one), then your mostly likely options are:

1 - sell up
2 - use equity release.

jimmyteabag

mortgage term is up and due for repayment.
It is a standard repayment mortgage and i only have my dwp interest payments towards it.
I know i am only one of thousands of people with my condition who will end up in the same position at some point.
Comes as a bit of a shock after working 65/70 hours a week all your life.

TrickyDicky101

With such a large debt outstanding, without any other source of funding (eg tax free pension lump sum) i doubt whether equity release would be viable (other than maybe to allow you to remain in your current property until you (and your partner) died/decided to move on). Going this route you are unlikely to have any inheritance to pass on.

So I think you are probably looking at needing to sell eventually and move somewhere smaller and cheaper so you can repay the debt.

grey_lady

Do you want to stay in your current property long-term? if so have you considered equity release - You could sign over your house totally to an equity release scheme this would release around 45% equity value on a home reversion scheme which would pay off your outstanding mortgage debt - after you pass on the property is sold and 100% of the proceeds go to the reversion company, there shouldnt be any ongoing repayments for you and of course you get to live there for the rest of your lives but you wont gain from any increase in value in your house and nothing will be left for any children etc - more of a good deal for the company than for you really but it would let you stay in your home.

You could also look into something similar called a lifetime mortgage which is another kind of equity release scheme. Maybe talk to an an IFA? but downsizing to pay off the capital and have the cash to buy a smaller property outright is probably the better deal for you if you want to have something to pass on.

Sorry, I dont understand how it's come as a shock that you have to pay back the capital?

jimmyteabag

The shock wasnt having to pay the capital back, it was having to stop working so suddenly preventing repayment and realising all i had worked for had gone.

grey_lady

Realising -that all you had worked for had gone? I'm still unclear - did you plan on paying back 100k+ of capital between the ages of 58 and retirement at say 65 through your day job?

Or was there some other scheme in place which fell through, e.g. an endowment policy
or some kind of deal that went wrong.

Either way you still have a lot of equity which you could release and use to make sure that you can stay in property for the rest of your life - or you could downsize which a lot of people choose to do when they retire and still have something to pass on.

Good luck with your treatment and whatever choice you make about the house.

Chinkle

Setting aside your current circumstances, how is it that you come to have such a large debt still with only seven years left on the term?

How long have you been on IO? Did you have give up work a long time before your diagnosis?

Are you on your own or living with partner/family? Is your income likely to change in the near future - any pensions, investment plans due to pay out etc? Are you likely to be able to make any further capital repayments at all?

I would look at your medium term finances, see what equity release schemes can offer and also discuss with your lender before deciding on your best course of action. But do it now, so you can plan for the future.

payless

You have a few years before this becomes a major issue.

There may well be options to transfer to a new lender or get term extended... but please take care not to gon to someone who offers to buy your propert and rent back, or pay fees to a broker who promises the world, or asks you to apply on basis of lying about your intentions

ILW

Sell up and buy a place for around £200,000.