Will I be made `homeless`

Alibali

Unfortunately for you, Santander are one of the strictest lenders out there, if they were to extend your 'interest only' mortgage, you may have to prove that you could afford the mortgage payments on your own, the reason being that the government may not continue to pay your interest indefinitely, just thinking of the Universal credit that is currently being implemented, and a cap on maximum benefits received. The bank has to consider whether you could afford to make up any shortfall should interest rates rise dramatically and the DWP not continue to maintain your full interest repayment.


Also....

Call for evidence - SMI
On 6 December 2011 the Department for Work and Pensions (DWP) published a “Call for Evidence” about the medium to long-term future of SMI. This asks for views on the Government’s ideas on simplifying SMI, and on longer term reform of SMI following the introduction of Universal Credit

I would say that you should be considering selling before the mortgage term is up, if £90k is not enough to buy a house or even a small flat (maybe lowering your expectations of what kind of property you wish to live in would be better) then you will have to consider renting. You will quite rightly lose your entitlement to benefit - why shouldn't you? if you have that kind of money in the bank you should not expect to receive state hand outs.

sexymax

As far as I understand it the amount that I`m currently receiving £250p mnth is well within the current limit ?
I just feel that the amount that Im getting to allow me to stay in my home is not over the top in relation to amounts that has been banded about in press recently ??

BoGoF

The harsh reality it is not your home and you have effectively been renting it by being interest only for the last x years, a rent that has been subsidised.

What you want and what your options will be will be completely different. Santander will want their money or at least a switch to a repayment mortgage.

Alibali

sexymax wrote: »

As far as I understand it the amount that I`m currently receiving £250p mnth is well within the current limit ?
I just feel that the amount that Im getting to allow me to stay in my home is not over the top in relation to amounts that has been banded about in press recently ??

Sadly that wont make much difference to the bank, a year or so ago the DWP dropped the rate of interest that they were paying, so nothing to say that they wont do it again, or if interest rates rise they are under no obligation to increase it either. The bank will most certainly see this as a massive risk, again considering the massive shake up of the benefits system that is currently underway. Only going by my previous experience with Santander, they are pretty strict. Also, they are a bank, a business - they don't care that it is your home, they are only interested in their investment and getting it back - by extending it indefinitely then they are not getting any of their investment back, and will the property still be worth enough to cover the outstanding mortgage once sold all those years down the line? Also you state your property is worth approx £250k, the bank will be aware of this and is another reason for them not to extend your mortgage and make you sell. All of this will be taken in to consideration.

I would tread very carefully if you are considering using one of those companies who buy your house from you and rent it back, they prey on vulnerable people, who like yourself would do anything to stay in their own home. Normally they will buy the house from you at a massively reduced price, rent it back at a ridiculous rate and after a few years do what they can to get you out and sell.

Just a thought, if you live in an expensive area then you must get your name down for a council house, with universal credit your housing benefit would be capped meaning that alot of private lets in more expensive areas will exceed the local housing allowance, leaving a shortfall for you to pay - again this wouldn't affect you straight away as you would be due full rent with £90k in the bank, but you need to think further ahead than that to when that money runs out.

Fosterdog

sexymax wrote: »

Thanks for all your comments..
1st my childrens mother was confronted regarding opting out..not interested
shes currently has been living in a new housing assoc house 3 bed £90.p wk
as far as shes concerned she can get approx £90k for doing f.a.
2nd My 2 children stay with me on and of and we live in east London. The £250k I recon the place is worth is for a 2 bed mid terrace victorian house not exactly Buckingham palace. ! and big point..I`ve lived here 23 years and renovated the place....its my home..I dont want to move..anywhere
and yes i did cash in the insurance some years ago when I was trying to keep my head above water..so theres no money there !

I understand how much you want to stay in your home but the harsh reality is you probably won't be able to. You do need to be realistic about where you can afford to live.

When my OH and his ex wife separated he had to leave the home he had built for his children and was forced into homelessness. He spent six months staying with friends and family and even sleeping in his car quite often as he had nowhere else to go. Unlike you he didn't have £90K to spend on getting back on his feet and it's only because we moved in together he has a roof over his head now. We are in a dump of a house compared to what we want and are miles from the area we want to live but times are tough for everyone and this is all we can afford so we have to make do and just hope that by working hard we can one day be lucky enough to have the money you have to help us out of this situation.

You are in a much stronger financial situation than thousands of people in this country and even though you only get a certain amount of help towards your mortgage, if you sold up and got somewhere you could afford that same money could help someone in a much worse place.

tescobabe69

BoGoF wrote: »

God forbid someone could stand in their own 2 feet.

That sort of talk is not allowed.

sexymax

This could now become policital : Instead of recieving advise as a lay down and accept the blade ! I`m searching for solutions in any way i can.
(you know the type of thing, instead of saying these jordain terroists can stay here receiving benifits indefinitly just incase they may be tortured ) I`m talking about an English man who`s lived here all his life is trying to stay in his home) you know the sort of thing I`m talking about...ANYWAY I CAN GOT THE MESSAGE.? NOT LAYING DOWN AND DIYING

Alibali

sexymax wrote: »

This could now become policital : Instead of recieving advise as a lay down and accept the blade ! I`m searching for solutions in any way i can.
(you know the type of thing, instead of saying these jordain terroists can stay here receiving benifits indefinitly just incase they may be tortured ) I`m talking about an English man who`s lived here all his life is trying to stay in his home) you know the sort of thing I`m talking about...ANYWAY I CAN GOT THE MESSAGE.? NOT LAYING DOWN AND DIYING

I think you want us to tell you what you want to hear, and sadly that is not the case. There is no easy solution to your problem and short of coming up with the money to pay off your mortgage in two years time, it is likely that you are going to have to sell up. You need to take advice from your bank asap. You have two years to get the house on the market and get a decent price for it, if you leave it too late you may be forced to accept a lesser offer just to get it sold in time.

The harsh reality is that it has become so much more difficult to get a mortgage these days, even with the best credit rating and income - everything is taken in to account and the banks are not prepared to take the risks that they used to take

CKhalvashi

BoGoF wrote: »

In answer to d) no they won't. They will be looking for payment of the amount borrowed in 2 years. You may have been able to remortgage if you had sufficient income but seems like you don't. Even if you were to remortgage it would probably have to be a repayment mortgage but you cannot afford this.

Seems like your only option is to sell and rent as advised earlier, that way you won't be homeless.

Or do what we did on our 1st BTL; Sale and rent back. The only advisory I can give on this is that you may not get the full value (we paid 85%) and you’ll be paying market rate rent.

Annisele

Be careful with sale and rent back - they can go very wrong. That article is old, and pre regulation, but it gives an idea of some of the things to be careful of. Even post regulation, there's a risk you'll be turfed out of your home after five years - and I don't think you'd get any benefits to help with paying rent on a house you used to own.