maximising our future potential

Maya_and_Angelou

We are both 59yrs old, and have a house worth £120000, and my father has recently placed his £160000 house in trust to myself.
We have an interest only mortgage at £36 per month with £8000 outstanding running till Feb 2015. We have a £10000 outstanding loan running till June 2016 at £280 per month.
We are not now reducing the mortgage due to reduced income and would welcome suggestions to help us with this problem.

chesky369

The words 'interest only mortgage' always run a chill down my spine. They are instruments of the devil because most people don't seem to understand that really the only way they work is (a) if you save the equivalent to what you would be paying on a normal mortgage, so that you have it ready when it;s due, or (b) if you sell up and downsize.

Have you managed to save anything against that date?

Maya_and_Angelou

Thanks, We have repaid £17000 since Feb 2010 and have a pension lump sum to cover outstanding mortgage. We are at the moment considering our eposure to the outstanding loan repayments which is with Tesco @ 7.9%. Do you have any ideas as to what are the best options.

chesky369

So, you're saying you definitely don't have to worry about settling the mortgage.

Your only concern is the £10k loan which at 7.9% is really not such a bad interest rate nowadays and probably can't be improved upon. Don't really understand your query - you either have to increase your income to pay it off, or decrease your expenditure. It's a bit like dieting - you either exercise more or eat less.

You might want to go on the debt free wannabee board for advice on how to reduce your outgoings. They're very helpful over there if you post your SOA (I think that means statement of accounts).