Endowment Mortgage comeing to end ... no endowment policy and no job!

BigAunty

Cals72 wrote: »

Hi, no he didn't cash the policy in - just checked his paperwork and he stopped paying mid term. Looks like its valued about £12k which is a big help still not enough!

..

Not only is it insufficient, it still means that after 25 years of the mortgage, your father still owes more than he originally borrowed...?!

The pre-repossession protocol means the lender has to consider if they can extend the mortgage term but unless he has a realistic prospect of work, then it's pretty much cruel to keep him in limbo.

Suppose he did sell the place for 95k with 5k selling costs, therefore releasing around 60k equity to him, can he buy a property for this?

What benefits is he claiming? How old is he?

Cals72

McKneff wrote: »

OP said 'housing costs were paid for' I presume that they meant the interest was paid for.

Yes - only the interest was paid.

Cals72

BigAunty wrote: »

Not only is it insufficient, it still means that after 25 years of the mortgage, your father still owes more than he originally borrowed...?!

The pre-repossession protocol means the lender has to consider if they can extend the mortgage term but unless he has a realistic prospect of work, then it's pretty much cruel to keep him in limbo.

Suppose he did sell the place for 95k with 5k selling costs, therefore releasing around 60k equity to him, can he buy a property for this?

What benefits is he claiming? How old is he?

We live in Glasgow - its possible (just) but it wouldnt be in a nice area and his house is like a wee palace and is in quite a nice area. In addition he has an illness which affects his mobility so it would need to be a bottom flat.

BigAunty

McKneff wrote: »

OP said 'housing costs were paid for' I presume that they meant the interest was paid for.

The OP wrote "Over the course of the last 3 years he became ill and has stopped working and his housing costs have been paid by housing benefit." However, we now know that he's referring to the Support for Mortgage Interest scheme, so that's now clarified.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321

For some claimants, it is time limited so that's why I want to know what benefits the OPs father is claiming.

Also, I thought SMI only paid for the original mortgage, not any subsequent remortgage so I wonder how the OPs father is coping with the shortfall as surely the OP is not getting all the interest paid?

Cals72

BigAunty wrote: »

Not only is it insufficient, it still means that after 25 years of the mortgage, your father still owes more than he originally borrowed...?!

Yeah i think he would owe £35K after we apply the endowment payment.

The pre-repossession protocol means the lender has to consider if they can extend the mortgage term but unless he has a realistic prospect of work, then it's pretty much cruel to keep him in limbo.

What about me acting as a guarantor - I am an only child and and the house will come to me anyway and i can sell it when the time comes?

Suppose he did sell the place for 95k with 5k selling costs, therefore releasing around 60k equity to him, can he buy a property for this?

What benefits is he claiming? How old is he?

He is on DLA and IS and he is 60 this year. He can live on the DLA and IS but i dont think he could get a mortgage.

BigAunty

Cals72 wrote: »

Hi Boobies - i will phone on Monday and let you know! There is still quite a lot of equity in the house so perhaps they might view it with less risk. Will let you know what they say - thanks for the advice.

I am not an expert in this area in anyway.

But I can't understand how the equity makes it any less risky when it comes to a remortgage. The real issue and risk is that your father owes a substantial sum and appears to have no real way to pay it off, ever...

The Shelter website is very helpful to explain the pre-repossession protocol and what the lender will consider in a renegotiation of a mortgage so that will give you pointers.

Cals72

BigAunty wrote: »

The OP wrote "Over the course of the last 3 years he became ill and has stopped working and his housing costs have been paid by housing benefit." However, we now know that he's referring to the Support for Mortgage Interest scheme, so that's now clarified.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321

For some claimants, it is time limited so that's why I want to know what benefits the OPs father is claiming.

That has never been implied to him to him. But I am sure your right - we dont understand the benefit system too well.

Also, I thought SMI only paid for the original mortgage, not any subsequent remortgage so I wonder how the OPs father is coping with the shortfall as surely the OP is not getting all the interest paid?

Yeah all of the mortgage interest is being paid from the SMI?

BigAunty

Cals72 wrote: »

We live in Glasgow - its possible (just) but it wouldnt be in a nice area and his house is like a wee palace and is in quite a nice area. In addition he has an illness which affects his mobility so it would need to be a bottom flat.

Perhaps contact GHA and see the feasibility of him getting social housing in his preferred area, due to his disability, likely future homelessness and link to the local area. Owner occupiers are banded at the lowest priority but there are many factors that he has that can increase his chances.

Yes, it will mean that he'll have to use the equity from the sale of his property to pay the HB but he'll have a lifetime secure tenancy and it would stop the stress of repossession.

It's either that or live in a grotty tenement in a deprived area of Glasgow and as an ex-resident of Maryhill, now a southsider, I know what I'd prefer...

Cals72

BigAunty wrote: »

I am not an expert in this area in anyway.

But I can't understand how the equity makes it any less risky when it comes to a remortgage. The real issue and risk is that your father owes a substantial sum and appears to have no real way to pay it off, ever...

The Shelter website is very helpful to explain the pre-repossession protocol and what the lender will consider in a renegotiation of a mortgage so that will give you pointers.

I understand what you mean - any views on my proposal to act acting as a guarantor - I am an only child and and the house will come to me anyway and i can sell it when the time comes?

Cals72

BigAunty wrote: »

Perhaps contact GHA and see the feasibility of him getting social housing in his preferred area, due to his disability, likely future homelessness and link to the local area. Owner occupiers are banded at the lowest priority but there are many factors that he has that can increase his chances.

Yes, it will mean that he'll have to use the equity from the sale of his property to pay the HB but he'll have a lifetime secure tenancy and it would stop the stress of repossession.

It's either that or live in a grotty tenement in a deprived area of Glasgow and as an ex-resident of Maryhill, now a southsider, I know what I'd prefer...

Now this made me laugh - its the thought of a wee grotty flat in Maryhill that has me terrified! His house is in Summerston and i cant see him moving over to the southside with £60K ;0) - thanks for all the advice.