Interest only

glplumridge

My friend came out of work last year he had an repayment mortgage, the northern rock changed it to an interest paying for 6 months, they have now changed it back repayment mortgage, he asked if he can keep it to the interest paying, they have said no because he would be in financial difficulty, and they could get into trouble because he could starve to death. when they told him that, he said well what do you think putting me back on to a repayment plan will do, they are putting him in a postion where he will have no option but to sell, and he doesn't really want to do that

He was told either to get a lodger in to help with the mortgage, or sell the house,

if he gets a lodger in he will be in a no win situation because he will have to declare it

but what really get my goat, if he sell the house and moves into rented accommodation
and the rent is £4oo he will get his rent paid for and his mortgage is less than that

he still owe £40,000 on the house

Thrugelmir

glplumridge wrote: »

they are putting him in a postion where he will have no option but to sell, and he doesn't really want to do that

Tough. That's life and always has been.

Your friend needs to make make some decisions rather than than expect an easy way out.

Home ownership isn't for everyone.

opinions4u

If he can't afford the payments, and isn't prepared to do anything to afford the payments, then he needs to sell.

It's not unreasonable.

Mrs_Z

I believe the Government's Rent a room scheme allows him to receive up to £4,250 p.a tax free but yes, he'd have to declare it. Worth looking into.

CLAPTON

facts and figures sometimes help

what benefits is he claiming
what is the mortgage payment (both interest only and repayment)

glplumridge

He isn't refusing to pay his mortgage it the first thing he pays, it just that the northern rock have refused him the interest only mortgage which he can afford,due to it could put him financial difficulty (and the repayment one will not!!!) and put him on the repayment mortgage again, which he can not afford.

He now claims jobseekers allowance
his repayment mortgage is 369 per month
his interest is 167

This guy has worked for the past 24 years none stop until last year.

BoGoF

glplumridge wrote: »

He isn't refusing to pay his mortgage it the first thing he pays, it just that the northern rock have refused him the interest only mortgage which he can afford,due to it could put him financial difficulty (and the repayment one will not!!!) and put him on the repayment mortgage again, which he can not afford.

He now claims jobseekers allowance
his repayment mortgage is 369 per month
his interest is 167

This guy has worked for the past 24 years none stop until last year.

Do you not realise by going interest he is not actually paying anything off his mortgage?

Your last sentence is totally irrelevant and so is the fact he 'doesn't really want to sell'. The lender is under no obligation to allow interest only so his options are get a job or sell. I know that sounds harsh but sometimes life is.

opinions4u

glplumridge wrote: »

He isn't refusing to pay his mortgage it the first thing he pays, it just that the northern rock have refused him the interest only mortgage which he can afford

The contractual mortgage payments isn't interest only though, is it?

due to it could put him financial difficulty (and the repayment one will not!!!) and put him on the repayment mortgage again, which he can not afford.

So if he cannot afford the contractual mortgage payment he has something of a problem. He's signed up to a mortgage with a specific term for repaying in. If he goes "interest only" he's never going to be in a position to repay the capital.

Why should that be acceptable to the lender?

This guy has worked for the past 24 years none stop until last year.

And?

glplumridge

If he was to go onto interest only, that would might give him time to get a job, without actually losing his house in the mean time.
but there again perphaps he could sell it and sit on his backside and let the state do it all for him,

then get a house for £400 and let the state again pay for it. but he was trying to avoid that

BoGoF

Your 'friend' came out of work last year you said in your last post, plenty time to find a job, no?

I assume his home is worth way more than the £40,000 still owed so with the surplus from the sale may not need/qualify for help?

opinions4u

glplumridge wrote: »

If he was to go onto interest only, that would might give him time to get a job, without actually losing his house in the mean time.
but there again perphaps he could sell it and sit on his backside and let the state do it all for him,

then get a house for £400 and let the state again pay for it. but he was trying to avoid that

And how long should the lender have to subsidise him for, in addition to the period of time they've already helped him out?