Help! IO mortgage coming to an end- Lender says NO EXTENSION MUST BEGIN REPAYMENTS

Lucebee

Hi All, I wonder if anyone can help me as I am in a difficult situation with my mortgage and desperately need help and advice
When my ex partner and I split up 1 1/2 years ago, as I was on maternity leave, my job had finished and I had a 6 month old daughter, I went onto Income Support, and changed my mortgge with my lender, Santander, to an Interest Only mortgage. This means benefits will pay a portion of the interest, I pay the rest, but they will only pay on a IO mortgage, not a repayment.

I explained this to Santander when I changed my mortgage and they transferred me onto the IO mortgage.

After having this mortgage for a year, they wrote to me saying that it would finish in another years time. I phoned them, to say I was still a stay at home mum and would need the IO mortgage to be extended temporarily until 2014 so that I can get help with childcare when my daughter is 3 allowing me to go back to work so I can afford to start repaying the mortgage. I was told by the person on the phone that I should 'get a job' or 'get a lodger' (impossible I live in a 2 bedroom flat with a toddler) or 'ask friends or family to help' - absolutely outrageous:mad: i wrote to complain but didn't hear anything. I was really upset by this but rang back (as I've been told can't talk to anyone in branches about mortgages) and was told that they would be able to help in another 6 months there was nothing they could do now.
fast forward 6 months til now - my daughter is 27 months old, no circumstances have changed. I stay at home to look after her. I don't get any money from her father (this is being looked at by CSA) I don't have a car, no loans or debts, have used up savings, and am very careful with money. I was told today by Santander that there was categorically NO WAY they could extend the period that I could pay interest only - I will have to return to paying repayments. The person on the phone did a budget planner with me and he could see there was no spare money to repay with. I told him that obviously my long term plan is to go back to repaying (I was on a fixed rate repayment mortgage for 6 years prior) but I needed another year (minimum) to get back to work and try to repay.
What can I do? Is there a possibility of switching to a lender that will offer me an on-going interest only mortgage until I get myself back into full time employment? I am so worried and upset I feel like I will have to sell my flat and move in with my elderly parents (who don't have room)
Sorry this is so long, please help I value any advice!!! Thanks so much
Lucebee

wymondham

I think you need an exit stratergy as you can't afford to stay where you are. What is the market like where you are to sell?

ILW

Get a lawyer onto your ex. He should be paying something to house his offspring.

Thrugelmir

ILW wrote: »

Get a lawyer onto your ex. He should be paying something to house his offspring.

ILW is spot on. Issue is with your ex. Not the lenders problem to resolve.

noh

Lucebee wrote: »

...............................................
This means benefits will pay a portion of the interest, I pay the rest, but they will only pay on a IO mortgage, not a repayment.

Please recheck your benefits information.
As far as I understand it benefit will only pay the interest portion of mortgage repayments. It doesn't matter how the mortgage is structured interest only or repayment. Therefore your monthly outgoings should only increase by the amount of the capital repayment which is likely to be a small proportion of the payment.

https://www.gov.uk/support-for-mortgage-interest/overview

loisebony

I have the same problem.....IO with Santander comes to end in October...On my own..have 112,000 mortgage...I do work......but I'm 52! Have 2 teenagers to support...I know I have to go onto repayment.....House worth 155,000..in Wiltshire...I intend to try and keep house for 10yrs.... I am worried...

marywooyeah

ILW wrote: »

Get a lawyer onto your ex. He should be paying something to house his offspring.

Lawyers don't deal with issues like this, that's what the CSA is for and they're generally not amenable to court proceedings.

OP is there a reason why you are still not working if your daughter is 27 months old? you don't have to wait til she's 3 to get help with the fees, it's just when she's 3 you should get 15 hours per week for free. you could claim the childcare element of working tax credit for childcare now so that you could go out to work now and start earning to pay the mortgage.

otherwise it sounds like you'll have to sell up, which would be a shame as owning your own property is a very desirable commiditiy.

Lucebee

loisebony - So I am no the only one in this situation :-( How long did Santander give you IO - is it 2 years? My mortgage repayments are not that high but I will have to try to find a pretty decent (and full time) job to cover the cost of the repayments and childcare. I am so confused as I have friends (one of whom has 2 properties!!) who are on IO mortgages with different lenders, the mortgages are ongoing, no problem whatsoever. I realise it's a temporary measure but it seems crazy that there is no flexibility in terms of increasing it for a short time :-(
In terms of ex contributions CSA etc - I mentioned this to put my situation in context. He has been assessed by the CSA for maintenance, the assessment was to pay £39 pw. But now apparently he has been sacked from his job so I won't get any child support until (if?) he gets a new job.

mchllbo

Lucebee

Try citizens advice and get them to work out what your tax credits etc would be if you found a job. You will probably find that you don't need to work full time, just more than 16 hours and then tax credits will top up your income and pay up to 70% of your childcare costs. CAB will be able to help you work out what you need to do and can also negotiate with your mortgage lender.

I am a single parent with two children and a mortgage and I work 16.5 hours per week. I find that my salary and child benefit pays all the mortgage and bills and I use tax credits for groceries and other expenses. We're certainly not comfortable financially but it keeps a roof over our head and enough for food, clothes and bills.

Hope this helps, good luck.

Michelle

(PS My ex is disabled so doesn't work and I only get £5 per week from CSA)

notanewuser

Lucebee wrote: »

In terms of ex contributions CSA etc - I mentioned this to put my situation in context. He has been assessed by the CSA for maintenance, the assessment was to pay £39 pw. But now apparently he has been sacked from his job so I won't get any child support until (if?) he gets a new job.

So he's doing the same as you then, is he? (Avoiding work).

notanewuser

I also have a 27 month old daughter and have to say that if I/we needed to we could EASILY all live in one room, never mind just sleep in one. So no reason at all not to have a room spare for a lodger other than you don't want to.

Tax credits will no doubt cover (70%?) of any childcare costs, so no reason for you not to work other than you don't want to.

IS will continue paying the portion of the interest whether you go back onto repayments or not. So no reason not to other than you don't want to work to pay your bit other than you don't want to.

And no, no other lender is likely to offer you a new mortgage while you're 100% reliant on benefits with no intention of working.