Help and advice needed

Gedcom

I need some help and advice on my mortgage.
Unfortunately I have been unemployed for 5 years ( I am now 63 ) and I am receiving Pension Credit along with my wife’s pension.
We were managing quite well until recently when my mortgage company reminded me we only have 8 months left to go on our mortgage. I have no means of paying this off at the moment. I asked them if they could extend the term but they have said no.

I would like to borrow £50,000 for 10 years (preferably interest only) on a house worth £200,000 to £250000. I have no other debts.
I am expecting an inheritance in the next 10 years and would be able to pay the capital off then if not before.

Can anyone help or advice me in this matter

Thank you

Wh05apk

Depending on your pensions, a lender like abbey may allow you an interest only mortgage with "downsizing/sale of property" as a repayment vehicle, as given your current equity this may be realistic if you do not receive your inheritance.

Gedcom

Wh05apk wrote: »

Depending on your pensions, a lender like abbey may allow you an interest only mortgage with "downsizing/sale of property" as a repayment vehicle, as given your current equity this may be realistic if you do not receive your inheritance.

Thank you for your reply but I don't think downsizing in the preaent market is a strong possibility

holly_hobby

Your income would need to be sufficient and acceptable by the lender, with respect to servicing the interest only mortgage - as you will be required to meet the interest only element each month until redemption. Having no idea what your income and all sources are (apart from you qualify for pension credit), its a little difficult at this point to state how succesfull you will be in securing a new residential mortgage (inc max permitted term consistent with lender age restrictions).

Notwitstanding the above, is the "inheritance" you expect within the next 10 yrs arising from a trust arrangement, or are you basically waiting for someone to pass on, with their promise that you will be bequeathed a certain amount within their will ?

If from a trust, with a defined time period, a lender may well be happy to accept this as your "repayment vehicle", if however the capital is to arise from the bequest of a will - well there are a number of issues here, primarily specific to an unknown timeframe when the capital will be received, and indeed whether the amount of capital (if any) is actually recd ( as a will can be revoked/amended at any time by the individual), and/or any sum recd is guaranteed to be sufficient to fully redeem the outstanding borrowing.

So you can see, if repayment is dependant upon as a beneficary under a will, there are several issues the lender will have in your relying upon this anticipated and non-guaranteed provision. If benefit is under a trust arrangement, this will have more leverage.

On that basis, Wh05's suggestion as regards, using anticipated disposal of the property as an official method of redemption, may well be your only avenue (in the absence of any alternative and viable repayment method).

Indeed, if your inheritance does not materilise by the time of redemption (or is less than the sum you anticipate), sale of the property may well be your only option, so the fact you don't wish to consider this solution may limit your options success somewhat.

Of which you may wish to consider as a final solution to your issue, a lifetime mortgage arrangement - which is repayable upon death or entry into long term care (but may be redeemed earlier subject to penalty). (happy to provide more general info & considerations under such an arrangement if reqd).

Hope this helps

Holly

property.advert

You can tell them whatever they want to hear to get the deal done and then you worry later how to pay it back. No need to ponder too long on whether you will or won't be willing to downsize in a decade's time !

holly_hobby

Whilst I appreciate your point PA., I don't feel this is a particularly responsible way for the OP to enter into the contract.

H