Question???

mrs_simplify

Hi if I have a straight repayment mortgage , currently on a fixed rate till june 2012 would I be a able to just pay the interest part instead for a few months ? making my payments lower temporarily

many thanks
not sure if it is allowed on my sort of mortgage

many thanks in advance

opinions4u

It depends upon the lender. It may also negatively impact your credit rating.

Why do you want to do this?

What would your plan be to catch up the underpayments later?

If you can't afford the current monthly payments, what's going to change to ensure you can afford them in future?

mrs_simplify

Hi many thanks for the reply. Me and my partner have gone a bit overdrawn, as well as owe a family memeber some money and also wanted to pay off a sofa and armchair. I thought if I took about 4 months / 6 months of the mortgage I could clear those things definaetely.
We are planning to downsize if it works out financially as good equity in the house and would like to use that to our advantage
We moved into this home about 6 months ago and its just pushed us out of our comfort zone with regard to affordibility and all those bills that need to be paid. Also am thinking of the future if intrest rates rise. We have about £205,000 in equity max maybe lower once selling fees etc come out, also depending what we get for our money

spitz83

Firstly check that your lender allows this in your T&C's. If they do there will probably be a form which you will have to complete and sign. As you will not be repaying the capital loan you will have to demonstrate how you will repay the capital when the mortgage ends. Normally saying you will sell the house will not be enough unless you have significant equity in it. Other ways may be ISA savings, investments or pension lump sums. As i understand it, it is becoming much harder than it used to be to switch repayment method. There will probably be a charge (eg. £50 with Nationwide) added to your mortgage if they approve you for interest only.

mrs_simplify

many thanks I will give them a call tmrow and see fingers crossed x

opinions4u

This is a dangerous route to take - you are effectively taking your short term spending, currently in the form of unsecured credit, and turning it in to secured debt.

Personally I don't recommend it.

Neither do I recommend payment holidays, but it's possible that a short payment holiday will achieve the same result you want faster.

Whichever route you take, ensure there is no negative impact on your credit file.