converting a interest only to a repayment mortgage

jamie11

I have a property that currently is on an interest only mortgage, the term still has three years to run. I'm thinking about the end of the term when the mortgage company will certainly want all it's investment back.

How difficult is it likely to be to convert the interest only mortgage to a repayment mortgage (say) over 15 years.

I do realise I'll have to pay but I don't want to waste funds on false starts or surveys. Is now the right time to be thinking about this?

R_P_W

How did you plan to pay off the capital?

How old are you? Can you afford the monthly repayments if you change?

Thrugelmir

jamie11 wrote: »

I do realise I'll have to pay but I don't want to waste funds on false starts or surveys. Is now the right time to be thinking about this?

Every month that passes increases the amount that you'll need to find over the remaining term.

The lender doesn't have an investment. You have a loan to to repay. Contractually you are obliged to repay. So the lender will recover the money from you.

holly_hobby

jamie11 wrote: »

I have a property that currently is on an interest only mortgage, the term still has three years to run. I'm thinking about the end of the term when the mortgage company will certainly want all it's investment back.

Its not their investment, its a debt you owe them.

jamie11 wrote: »

How difficult is it likely to be to convert the interest only mortgage to a repayment mortgage (say) over 15 years.

Well any term extension with your lender (ie requesting a revised longer period to repay your debt) is effectively for underwriting classed as new borrowing - so you will be subject to standard status and affordability checks in support of your request. Of course you could choose to change lender to effect thc change - again full underwriting(inc survey) reqd.

jamie11 wrote: »

I do realise I'll have to pay but I don't want to waste funds on false starts or surveys. Is now the right time to be thinking about this?

With your current lender (and if status checks passed) there will of course be associated admin fees re term and repayment method change.

If you choose to remortgage to an alternative lender (either rate driven or because your current lender can't accomodate your request), your application will be for a repayment mge over a 15 yr term - to which there are various lenders whom offer a fee free (basic survey and legals) remortgage service - which may not only secure you a lower payrate but also avoid the admin fees that otherwise would be incurred with your current lender.

As I say, this will all hinge on your current age, to what age a 15 yr term will take you, your income during the mge term being sufficient and acceptable for affordability purposes (along of course, with hopefully no recorded adverse credit data).

First things first, speak to you lender - see what they can offer both term and product wise ,and what the fees will total - and then consider your options.

Hope this helps

Holly

Building_Surveyor

what was you original plan to repay the capital? is this your only property? what repayment vehicle do you have in place? whats plan b if you cannot get a mortgage for whatever reason?

jamie11

Building_Surveyor wrote: »

what was you original plan to repay the capital? is this your only property? what repayment vehicle do you have in place? whats plan b if you cannot get a mortgage for whatever reason?

I have other 'paid outright' properties so I can always sell one of those to clear this one and make it paid up. I would rather keep it than sell it. My assets far outweigh my debts. That's why I'm considering all this now rather than waiting until 2016 and having to scramble for hard cash in the bank.