moving from part repayment mortage to Interest only

ponymad_3

My friend was hit by the drop in benefits towards his mortgage last year... His mortgage is with Halifax. He is retired and on benefits such as DLA etc so cannot increase his income. At the time he was actually ahead with his mortage by around £600.
We went into see them in November and were told there was nothing that could be donethen to negotiate, he just wanted to put the whole mortgage onto interest only at that time tehn he would be able to afford. They said that when the excess monies were used up that was the time they would negotiate... that time has come and he has just received today a pretty heavy handed letter. We are going to call, does anyone have any advice when dealing with Halifax.

Obviously he does not want to lose his home, but this government ruling cost him an additional £200 pm, he has been paying an increase of £100 half of this since November, really the most he could realistically afford.

opinions4u

1) How much does he owe?
2) What's the remaining term?
3) What's the current monthly payment?
4) What's the current interest rate?
5) How much, including benefit contribution, does he feel he can afford?
6) What's the property worth?

In the end, simply talking to Halifax should find some sort of solution.

ponymad_3

Mortgage is 60k valuation around 200k this taking into considerationprice drops... Cottage in conservation village and similar prob not as good on market at 225k

term is for another 13yrs... he would expect to sell before then as would not live there for more than another 10 yrs (67 now)

He now pays nearly 200 himself and the govt pay the remainder

Don t have int rate but its Halifax SVR

He can pay the amount he is - not another 100 on top tho

Thanks for your help

saverbuyer

ponymad wrote: »

Mortgage is 60k valuation around 200k this taking into considerationprice drops... Cottage in conservation village and similar prob not as good on market at 225k

term is for another 13yrs... he would expect to sell before then as would not live there for more than another 10 yrs (67 now)

He now pays nearly 200 himself and the govt pay the remainder

Don t have int rate but its Halifax SVR

He can pay the amount he is - not another 100 on top tho

Thanks for your help

67 years old and still another 10 years to pay.

Expects state help to stay in a 200k home.

I do despair sometimes with our society.

Downsize?

opinions4u

Halifax will take things on a case by case basis.

There is, possibly, potential to get an interest only arrangement made. But sooner or later this is going to get reviewed.

While I can see the attraction of living in a house at the expense of the taxpayer via income support for mortgage interest, there is £140k of equity there which could be used to fund rent payments or the purchase of a lower value property without a mortgage.

It's easier to move house at 67 than it is when you're in your 70s.

ponymad_3

saverbuyer wrote: »

67 years old and still another 10 years to pay.

Expects state help to stay in a 200k home.

I do despair sometimes with our society.

Downsize?

Thanks for that Saverbuyer very helpful.... 2 sides to every story - it beats me why people join these forums if they cannot offer some support!

Turns out that Halifax should not have moved mortgage from part repayment/part interest only to just repayment 5 yrs ago. The mortgage is now only actually 51k ... but even if he wanted to moving is nt an option as properties round here are not selling. its a little (but nice) cottage and there is very little on the market lower than this.

If as you suggest he did sell and move into rented accom he would in fact be able to claim more... lets hope Halifax do see sense Signs are good.

BTW I m normally answering questions and trying to help others and this was a first post for ideas on here.

saverbuyer

I agree there are two sides to every story.

All I’m saying is this person is asset rich.

They have a large amount of equity in their home. They cannot afford it. There has to come a time when the state says “no we won’t pay for this”.

I don't know what this is "part repayment/part interest only" it does not make sense. It is one or the other.

If his mortgage was only interest only he would still be in this situation because he is past retirement.

He had two options at retirement 1: downsize.
2: Pay the mortgage.

Society cannot afford to pay for everyone’s mortgage and benefits until death at 100.