Mortgage Repayments - Can a lender do this?

MAW11

I really need some help and advice as my usual mortgage broker has said they cannot do anything.
Our lender namely Mortgage Express has switched our repayments back to 'interest only' which of course has doubled our payments.
We were originally on repayment but approx 5 years due to having a child I only worked part-time and we struggled for a bit so switched to 'interest only'. We anticipated to do this for a couple of years but unfortunately circumstances changed (redundancies) this has gone on far longer than we wished. My husband and I luckily obtained new full-time jobs straightaway but for much less salaries and cost of living increased etc etc so we haven't managed to switch back yet.
Our lender namely Mortgage Express has stated they have the right to switch us back to 'repayment' and that's that! I have asked if we could possible go 'part repayment and part interest only' but they will not budge. We need 75% / 80% LTV but my broker states we cannot mortgage elsewhere as we do not fit newer and stricter lending criterias. We do have quite a lot of debt but we have always paid all our bills/debts on time and we do manage it. We both work extremely hard and never claimed benefits and we feel like failures. I am so worried as of next month our mortgage payment doubles and I have no idea how we will afford it. Mortgage Express state in letters they can help if you have difficulties but on the phone very different and push you down a debt management plan and even suggested bankruptcy!? As mentioned we have always paid our bills so surely this should not be an option. We just want a mortgage as I am so scared this is a slippery slope and we will loose our home of 10 years. Any advice much appreciated.

ACG

You can call them and make an official complaint in which they have to respond in writing. You could also write a letter of complaint.

This means should it come to it, you could go to court and show you have tried to meet them part way offering part and part, however theyre not being very forthcoming with alternatives.

However, it could be that you may end up having to sell and downsize/downgrade.

You dont give enough information about yourselves (ie, incomes and loan your looking for) but if a broker has looked into it, then chances are there probably isnt much available. Interest only has all but gone over the last 6-12 months.

Wh05apk

The mortgage was originally repayment and they allowed you to switch to interest only for a "temporary" period to help you out, it would appear they hve been very generous in letting the "temporary" period last for 5 years!

The problem they have is that is that the FSA is getting very strict on interest only mortgages, and lenders are very twitchy, if they allow you to stay on interest only I can see your post in 20 years time saying "Mortgage express allowed us to stay on interest only with no repayment vehicle, we are now retired with only pension income and cannot afford to pay the mortgage, they are forcing s to sell, can they do this?"

There comes a point where "temporary" becomes permanent, at that stage, you need to consider your options, such as downsizing etc.

suburbanwifey

On an interest only payment you are not actually paying for your house and if you can only manage to stay in your house by being on interest only, then the sad reality is that you cannot afford to live or stay in that house. The poster above me is correct, you would complain they let you stay on an interest only mortgage in the future when your mortgage matures and you have not paid off the capital. You would have been better staying on a repayment mortgage 5 years ago, rather than asking to switch over, because your mortgage payments may have been higher back then but you would have paid a substantial amount off what you owed by now (5 years later) and thus your payments would not be doubling.

You need to be on repayment to pay off your house, its that simple, sorry. I feel they are doing the right thing. Its not *your house* when you are on interest only, you are only in effect *renting* it from the lender.

Dave_Ham

You do not say how old you are?

There is a slim chance they may extend your term (depending upon above) and therefore with a longer repayment term, your monthly cost will go down.

They have been quite obliging for you to get 5 years, but they will definitely not allow you back to interest only.

Good luck

Wh05apk

Has your broker only looked at interest only options, which will almost certainly be a no-go, or have they looked at remortgaging to a longer term on a repayment basis?

What are the numbers? (incomes, mortgage, value, ages etc) we may be able to give you more guidance with afuller picture.

SouthCoast

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