Matured Mortgage

Hyipper

Hi, I wonder whether anyone here might be able to help.

I currently have a mortgage which has matured but it was interest only and I didn't have an endowment attached to it.

When I took it out 25 years ago, I understood that there was a verbal agreement that it would continue until I died or the property was sold.

Unfortunately the lender, which was taken over by another company, a major high street bank, is demanding that I pay the mortgage amount back but I do not have enough funds to do it.
It seems silly to me that I have had this mortgage for 25 years, have paid regularly in that time, have never even been late with one payment and yet they will not consider allowing it to continue.
I know that I could sell the house, but now, as we all know, is not the ideal time to do so.

However I haver had it valued and it comes out at £700,000. The mortgage is around £72,000, just about 10% loan to value.

I am retired, aged 67, and the only income that I can show is the state pension. I have family living here with me who contribute their share to all the expenses which is one reason I have been able to keep the mortgage paid regularly. The other is that I have a granny flat attached to the house where my parents used to live. That is also rented out for a sum well in excess of the monthly mortgage interest.

I have been keeping in contact, trying to negotiate with the bank, but they just seem to send standard letters in return to me. I just wish that I could talk to someone in a senior position there.

Yesterday I received a letter from a debt management company who want to come and visit which worries me.

I have also talked to an equity release company but I have heard such bad stories that i am loathe to go down that route.

Does anyone have any ideas please?

kingstreet

IIRC Halifax has Retirement Home Plan, an interest-only mortgage for the over-55s.

A retirement home plan mortgage is a lifetime mortgage scheme conducted on an interest only basis. No deduction is made in the affordability calculations for the cost of an investment. RHP mortgage is only normally available to applicants over the age of 65. There is discretion for applicants under 65, in circumstances where they are retired with no earned income. Funds can be used for any purposes. Maximum LTV - 75%. Retirement home plan has been classed as a lifetime mortgage scheme by the FSA so is subject to the specific sections of MCOB.

How it works

This is a lifetime mortgage where the mortgage balance never decreases. It must be repaid at the end of the mortgage term or when the property is sold, if this is earlier. Once the mortgage is repaid, any surplus sale proceeds belong to your client or their estate.

To make sure your clients understand the features and risks, you must provide them with a personalised illustration.

Client already has a mortgage?

If your client already has a mortgage with any lender, they can transfer it to Halifax Retirement Home Plan, and take advantage of a lower, interest only, monthly payment.

Monthly repayments

Your clients need enough income to meet their monthly repayments and other associated home ownership costs.

If they haven't already retired, they'll have to continue to pay the monthly repayment once they retire when their monthly income may reduce.

To use retirement home plan for home purchase or home improvements, DWP (Department for Work and Pensions) benefits may be suitable income.

Terms

Minimum age: applicants must normally be age 65 or over
Maximum term: 40 years
Maximum loan: 75% of property value. Other restrictions may apply depending on the product selected
Basis: single or joint life, fixed or variable rate interest only mortgage
Interest rates: rates will depend on the individual circumstances of the applicant

I'm sure other lenders have similar facilities. Contact an IFA for advice.

getmore4less

Might be a good time to also look at IHT planning.

What about the family living in the house can they take on a mortgage

opinions4u

kingstreet wrote: »

IIRC Halifax has Retirement Home Plan, an interest-only mortgage for the over-55s.

Only available via intermediaries.

And they won't lend £72k against a state pension.

The IFA suggestions and IHT considerations are spot on here.

saverjustice

There must be a mortgage offer somewhere. Which lender is it? Whereabouts in the country are you? Do you have any immediate next of kin who can act as guarantors? I have lots of questions.

kingstreet

opinions4u wrote: »

Only available via intermediaries.

And they won't lend £72k against a state pension.

The IFA suggestions and IHT considerations are spot on here.

No. I agree. I was doubtful and nearly posted back. However there does appear to be scope perhaps with family and taking into account the rental income from the granny annexe, so I let the IFA recommendation ride.

Details of the Halifax thing were a confidence-booster for the OP that there may be something out there if he seeks proper independent advice.

Hyipper

Thank you for all your help.
I have met with someone independent locally and he is trying to sort something out.