changing to interest only-sorry posted it twice, please delete it

daraya

due to debt problem we have problem with paying our mortgage. We want to change it to interest only which could help a lot but bank doesn't want to let us. They keep saying we can not afford one. But surly we can as it will be less then half of what we should pay now. Things don't look well as we already about £2500 behind with payment. What shall we do? any advice please.

brit1234

daraya wrote: »

due to debt problem we have problem with paying our mortgage. We want to change it to interest only which could help a lot but bank doesn't want to let us. They keep saying we can not afford one. But surly we can as it will be less then half of what we should pay now. Things don't look well as we already about £2500 behind with payment. What shall we do? any advice please.

The banks are probably right.

During the creation of the housing bubble banks lent out tons of these IO mortgages with little or no conditions. When property went sour they faced huge debts on their mortgage books especially from IO. All people were doing was staying on IO mortgages to get cheaper rates but with no repayment vehicle relying on capital appreciation. They had no way to pay the outstanding amount owed at the end.


To stop this banks mostly require a repayment vehicle such as a cash ISA, shares etc which will be bought at the same time.

Interest only is now not to be seen as a cheap option so you are going to have to talk to the bank about other options and I recommend speaking to the citizens advice bureau, they are free.

Crinz

what Bank are you with?

AFAIK most will allow interest only for a short specified time for financial difficulties.

have you phoned the financial difficulties line if the lender has one? General call centre staff probably wont be authorised to give them

Thrugelmir

Duplicate threat.

https://forums.moneysavingexpert.com/discussion/3182104