Struggline to pay mortgage advice

ktpross81

Hi all,
I was hoping someone could offer some advice.
My father is a self employed builder, and has been struggling financially and medically.
He owe's just under £10,000 on a house worth £200,000.
We were looking to see if he could release equity on the house in order to pay off the remainder of the mortgage - so he would have one less bill to pay a month. But on reading up on Equity this morning, I see that he would not be eligible if there's a balance outstanding on the mortgage and that I would have to sell the house upon his death. We would rather keep the house in the family.
Is there any other alternative's?
As I know the house will be mine one day - I am willing to take on the debt myself but I have a very poor credit rating.

I just want to take the mortgage worry from him.

Any help appreciated.

lee111s

If you're willing to take on the debt yourself can't you just pay the mortgage for him?

Dave_Ham

Is that £10,000 vs £200,000 value.

If so, almost does not matter how bad your credit rating is there will be a solution.

Start with your Experian, Equifax and Call Credit reports and then get in front of a broker with your Father.

Good luck

ktpross81

Yes that's right Dave.
Thanks for that, it's given me hope.

As for paying the mortgage myself - I'm not in a position to pay 2 mortgages at present. Another £450 a month would cripple me.

Dave_Ham

I urge you to sit down or talk to someone qualified.

Get the credit files and your Father and talk to someone, for a £10k mortgage you should be able to do something about the payments that do not include paying an extra £450 a month.

Clearly (and probably not for a public forum) you need to understand if Dad is going to get better and work again, if he has any protection policies to support him through this period (although sure you have explored this already) and depending upon the answers above whether he actually wants to stay in this current house (as this may be another solution)

I wish you well

Crashandburn

ktpross81 wrote: »

Yes that's right Dave.
Thanks for that, it's given me hope.

As for paying the mortgage myself - I'm not in a position to pay 2 mortgages at present. Another £450 a month would cripple me.

Is this figure of £450 due to the fact your dad is being asked to pay off the £10k in a very short period of time? If so, can the current lender extend the term.

To switch it all to your name for such an amount does seem an expensive option so worthwhile investigating all avenues for keeping it in your father's name.

Let_Us_See

ktpross81 wrote: »

We were looking to see if he could release equity on the house in order to pay off the remainder of the mortgage - so he would have one less bill to pay a month.

Please could you confirm your father's date of birth? Thanks.

ktpross81

No, he's been paying £450 mortgage for a number of years now, I believe that's just his normal payment.
He's 65 in August, I thought he maybe less likely to extend or get credit.

I will get him to sit down with an advisor as suggested. Thank you all for replying.

Let_Us_See

Whilst it may not be your first choice of action but as a backup plan your father could easily release £10,000 via a lifetime mortgage. The interest can either be rolled-up (basically, no monthly payment at all), or paid (Between £50 - £60 per month, thus maintaining only a £10,000 loan) which you maybe able to repay at a later date and keep property within family.

What is your priority? Save father from struggling financially and medically, or retain his home within the family?

JimmyTheWig

ktpross81 wrote: »

No, he's been paying £450 mortgage for a number of years now, I believe that's just his normal payment.

As it has been going for a number of years, it's reasonable to think that he only has around two years left.
So while it may not be the case the he has been "asked to pay off the £10k in a very short period of time" it may be the case that he _is_ paying off the £10k in a very short period of time as the mortgage ends in a very short period of time.


OP, you say that you have a mortgage. How much equity do you have in your property? What would the chances be of extending your own mortgage by £10k?

mrsnobody

I work in Equity Release and would like to reassure you that equity can be released even if there is an outstanding mortgage - the existing loan is repaid out of the released funds, and the ER lender then has first charge over the property. Obviously you need to be able to release enough to cover the full outstanding mortgage balance but this shouldn't be a problem for your father - at age 64 he could potentially release up to 25% of the property value. Also, you are not forced to sell the property upon his death, the loan can be repaid from other sources, enabling you to keep the house. Do bear in mind though, that the loan plus rolled-up interest may increase to such a level that this is not possible and the only option is to sell. If Equity Release is the chosen route, your father will need specialist advice from an intermediary qualified in Equity Release as there are many factors to be considered, and Equity Release is not always the recommended option.
Hope this is helpful