interest only mortgage

edlucher66

Hi there hope someone can help in a difficult situation. We have an interest only mortgage which we took out when we moved into our new home 5 years ago. At the time my husband was earning good money but had a bad credit history. Not long after moving my husbands was made redundant and I went back to work part time while he got a job that dosnt pay very well. We would like to get a repayment mortgage but our current lender dosnt do them so we might as well be renting as it is money down the drain and we will still owe £250k in twenty years! We have approached a few banks but been refused the monthly payments were way beyond our means anyway. Any advice would be greatly appreciated, many thanks.

Thrugelmir

Who is your lender?

edlucher66

Rooftop Mortgages.

edlucher66

Rooftop Mortgages

Thrugelmir

Are you in negative equity now?

edlucher66

Our house is worth about £260 but owe £250.

kingstreet

Make voluntary regular overpayments to your current mortgage, if you are not penalised for doing so.

If that's not possible, save money separately and use that to make regular one-off lump sum payments according to the schedule/terms you signed up to.

There's more than one way to repay a mortgage.

_Andy_

edlucher66 wrote: »

Our house is worth about £260 but owe £250.

That's one cheap house.

edlucher66

Thank you Kingstreet but me cannot afford to do either at the minute we struggle from month to month and can see no end to this problem.

ILW

edlucher66 wrote: »

Thank you Kingstreet but me cannot afford to do either at the minute we struggle from month to month and can see no end to this problem.

So how would you manage a repayment mortgage then?
I am confused.

kingstreet

So, how were you going to pay the increased payments required by a repayment mortgage?

For example, £250,000 at 4% over 25 years;-

Interest only £833.33 per month
Capital & Interest repayment £1,319.59 per month.

That's almost £500 per month more.

How would you have paid that, if the lender agreed to convert your account to repayment?

My regular overpayment idea means you could have overpaid less than that, and still paid something off your mortgage.