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repayment to interest only mortgage?????

molly22
molly22 Posts: 183 Forumite
Part of the Furniture 100 Posts Photogenic Combo Breaker
in Mortgages & endowments
i am looking to change from a repayment mortgage to an interest only mortgage.

are there any charges for this?

do i need to show that i will be able to repay the mortgage at the end of the term?

what happens when the mortgage becomes due to be paid?

the mortgage amount is £50k
the property is valued at £150k

any advice would be gratefully received

many thanks
molly

happy xmas eve everybody!!!!
«1

Comments

  • Wutang_2
    Wutang_2 Posts: 2,513 Forumite
    You will need to get on the phone to your current lender, happy xmas to you too!!
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    The most important question .... why?
  • Farmerbob
    Farmerbob Posts: 234 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    The first question is why, most of the time mortgage companies will need a very good reason to change to IO usually severe financial hardship and even then they will ask for details of your income and expenditure and make sure that you have cut your expenses down. Out of interest what term is your mortgage, perhaps extending the term may be a option depending on what your reasoning is?
  • Wh05apk
    Wh05apk Posts: 2,938 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    opinions4u wrote: »
    The most important question .... why?


    No, why is irrelevant, the most important question is what repayment vehicle do you have?

    Lenders will normally allow a chamge probably charging an admin fee of £50 or so, most will require a repayment vehicle, such as an ISA/endowment etc.
    I am a mortgage adviser.
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    Wh05apk wrote: »
    No, why is irrelevant
    Rather relevant if the reason is financial difficulties.
  • Wh05apk
    Wh05apk Posts: 2,938 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    opinions4u wrote: »
    Rather relevant if the reason is financial difficulties.

    Then they will normally only allow a short term switch, if the OP is looking for a long term switch a repayment vehicle will be required.
    I am a mortgage adviser.
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    Wh05apk wrote: »
    Then they will normally only allow a short term switch, if the OP is looking for a long term switch a repayment vehicle will be required.
    All of which can be established by getting an answer to the question "Why?" I'm sure you'll agree.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Wh05apk wrote: »
    No, why is irrelevant, the most important question is what repayment vehicle do you have?

    If the borrower has other unsecured debts then lenders will expect an arrangement to be made with other creditors first. Not unreasonable given that forces the borrower to face their financial circumstances head on. Switching to interest only is an easy option for the borrower. Often to the detriment of the mortgage lender.
    what happens when the mortgage becomes due to be paid?

    This comment suggests that the OP doesn't have other assets to realise to discharge the debt.
  • Wutang_2
    Wutang_2 Posts: 2,513 Forumite
    opinions4u wrote: »
    The most important question .... why?

    This relates to a lot more than mortgages.

    Why?
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Wutang wrote: »
    This relates to a lot more than mortgages.

    Why?

    Why does why relate to a lot more than mortgages, when why is the answer?
This discussion has been closed.
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