How can I keep my property?

rms1

Hi,

In a nutshell: My interest only mortgage term is due to end in 5 years time when I will be 65. Unfortunately, non of my pension plans will perform as I had hoped and I will consequently have a large shortfall, still owing almost 200k worse case and 100k at best.

I expect when the time comes, to have at least 175k collateral in the house. My question is, what are the options for my wife and myself as we would both like to stay in the property?

I will still have an income when I turn 65 as we have our own small business and have no desire to stop working and even if I do, I will still have enough coming in to service the payments.

My mortgage is with the Halifax and I have an appointment next week but I would like to be prepared so any advice would be most appreciated.

pjcox2005

I'm sure someone else will be along to discuss the practical mortgage points, but wouldn't it make sense to downsize. Presumably you won't have children living with you so finding a smaller place with the collateral will mean you won't be having to meet interest payments and therefore your income can go on enjoying/having a better quality of life.

You may have already considered this but I thought it may be worth restating so you can think again.

getmore4less

Well the obvious answer is increase you payments and term both by as much as you can and see what the numbers look like.

If that does not work then you need to review.

How much income are you expecting going forward.

epsilondraconis

It may also be worth speaking to an independent financial adviser in addition to you having the meeting with the Halifax. Obviously the Halifax will be pushing only their products and services.

Wh05apk

Depending on your income/pension income you may be able to extend the mortgage up to 75, however most lenders will base this on a repayment basis, so at worst case £200k over 10 years -ouch! so would likely fail affordability, Abbey will base affordability on repayment over 25 years, and allow "downsizing" as a repayment vehicle, so that may buy you 5/10 years, you could of course make capital repayments.

Failing the above, you are looking at downsizing now, or equity release, although given your ages, you will likely only be able to release 25/30% of the value.

Bullfighter

rms1 wrote: »

Hi,

In a nutshell: My interest only mortgage term is due to end in 5 years time when I will be 65. Unfortunately, non of my pension plans will perform as I had hoped and I will consequently have a large shortfall, still owing almost 200k worse case and 100k at best.

I expect when the time comes, to have at least 175k collateral in the house. My question is, what are the options for my wife and myself as we would both like to stay in the property?

I will still have an income when I turn 65 as we have our own small business and have no desire to stop working and even if I do, I will still have enough coming in to service the payments.

My mortgage is with the Halifax and I have an appointment next week but I would like to be prepared so any advice would be most appreciated.

You need to review and risk assess your basic assumptions.

Downsizing is probably the best option. Let a young family buy your house.

rms1

The downsizing idea would not be practical as even though our kids have left home, we run our business from home so need the space. Having said that, it is not a big house but the area is quite expensive.

Like I said in my OP, I may be able to clear 100k off the mortgage leaving 125k owing. Would this make any difference?

rms1

epsilondraconis wrote: »

It may also be worth speaking to an independent financial adviser in addition to you having the meeting with the Halifax. Obviously the Halifax will be pushing only their products and services.

I have done this and although it seems that the Halifax have something called a non ending mortrtage, this is only for retired people. I am hoping to find out if it could be an option in 5 years and what is the criteria.

hcb42

you would still need to remortgage on repayment basis for that for ten years....and would need to show the income to support that.

Wh05apk

helencbradshaw wrote: »

you would still need to remortgage on repayment basis for that for ten years....and would need to show the income to support that.

Why, would it have to be on repayment?

rms1

helencbradshaw wrote: »

you would still need to remortgage on repayment basis for that for ten years....and would need to show the income to support that.

I would be able to prove the ability to pay.