Does equity mean nothing for pensioners?

stressedoap

My wife and I have a mortgage of about 50% of a £175,000 property with TMB who now annouce the current interest only loan cannot be remortgaged and we have 12 months to repay it. Clearly we cannot make the first instalement and face eviction and a knock down sale of the property.

We seem unable to get a new mortgage, our only income that can be considered is our joint state pensions (I am 70 this year, my wife 63) and if you considered our outgoings it would suggest getting any mortgage would be impossible.

Self certs and non status loans as this TMB was some 6 years ago are no longer possible. We have nil savings.

We qualify for interest on the mortage under Pension credit but that does not get considered by lenders.

Being over 65 many lenders will not even consider an application. Some suggest any mortgage must be paid off by 75 giving a 5 year repayment term which cannot be afforded.

Unless we can find an urgent solution as we want to stay in the current home, otherwise we are forced to sell up and go into rented, and draw down our new wealth as we would loose all benefits we now qualify for.

We could move to a cheaper area where the same size/type of property could be bought for 110-120,000 but family are not keen.

Family cannot help the dilemma as they are already full committed.

Whichever way we turn we seem to be stuffed, despite having at least £80,000 in property equity.

Ideally we want a 15 year mortgage, perhaps part interest only, part repayment, that way all interest can be still funded by pension credit and we can reduce the debt over the 15 year term, perhaps all of it. At present this seems an impossible, albeit logical request.

Any bright and practical ideas? I have tried a dozen brokers and 5 lenders direct with no success, or ever a glimmer of hope.

opinions4u

Much as it's not what you want to do, I'd get the house on the market now to ensure you have control over the sale price, not a buyer chancing their arm on a repossessed property.

draw down our new wealth as we would loose all benefits we now qualify for.

And there you have it. Your equity has value. It will lift you out of a welfare situation and allow you to support yourselves with pride.

betmunch

6 years ago you took an Interest Only mortgage and would have put on the aplication how you were going to repay the loan, what did you put?

stressedoap

The point is the 6 year term has now expired and TMB no longer do mortgages, I cannot recall what we said then, as it was a self cert or non status cannot recall. The rate was very good the last year was 1% above base rate. I guess we had hoped to repay some in the interim, or could have remortaged.

MattLFC

Sorry, but I find it hard to believe that one of the biggest decisions and commitments you will ever make (a mortgage), and you "forget" what you said then. It sounds like you never had a hope in hell of being able to pay this mortgage in the long-term, unless everything stayed just rosy (which it never does, after 64 years on this earth, you should have known this back then), and as a result, you find yourself in a pickle now, but just don't want to admit you were silly then.

As said above, if your family won't help you out, get it on the market asap. As much as you want to stay in the house, it seems like it's now beyond your means to do so. Get out whilst the going is good and have some control over it. Are you honestly expecting someone to give you a mortgage, based on the (remote) possibility that you will live until 85 and your wife 78?? They might be prepared to take the risk, where you in your 50's, but sorry, it is illogical to do so at such a late age in life.

The reason the sort of mortgages you could get back then, don't exist now, is because they were incredibly stupid, and lost the banks, both sides of the Atlantic, a LOT of money.

I know this sounds harsh, but it sounds like you need a little bit of a wake-up call.

maninthestreet

So, the property is worth £175,000, and you have 50% mortgage, so you owe £87,500.
To repay that over 15 years would mean a payment of £486 per month. What, exactly, is your income per month (excluding the Pension credit for the interest you currently receive) ??

dunstonh

Does equity mean nothing for pensioners?

equity doesnt pay the mortgage. Income does.

Self certs and non status loans as this TMB was some 6 years ago are no longer possible. We have nil savings.

Did you declare your income correctly or did you put a made up figure in there?

have you considered equity release?

stressedoap

Income is £220 a week from state pensions and £10-£12,000 a year from part time work

Equity release assumes you have small or nil mortgage and based on age a life time mortage would raise £40,000 or so only so is no answer. In case interest usually rolls up.

I read that over a millions families over 65 have mortages >£70,000 so we are not alone..... sure we could both croak tomorrow or live to be >100 who knows.

Seem Halifax who I am meeting today have no age limits (HSBC too)

_Andy_

Shame on those nasty mortgage lenders for being responsible.

dunstonh

Equity release assumes you have small or nil mortgage and based on age a life time mortage would raise £40,000 or so only so is no answer. In case interest usually rolls up.

Equity release can replace an existing mortgage.

Seem Halifax who I am meeting today have no age limits (HSBC too)

Most lenders dont have age limits. They all have affordability checks though.

getmore4less

So you took a 7 year interest only loan for £85k 6 years ago.

did you have any plans to pay this off in the 7 years?

If not why not a longer term?

If 7 years was the longest they would give that was a clue a remortgage was going to be unlikely.

you realy should have had a plan 7 years ago.

Sell and rent or move somewhere you can aford seems to tbe the best option.

if family want you close what about merging finance for a bigger place together.