My retired mothers interest only mortgage expired - please help! :(

rs65

TLOR wrote: »

Its around 100k with 80ish owed

Doesn't sound like downsizing is an option then.

Cornucopia

holly_hobby wrote: »

Doesn't matter whom buys it, if the vendor is to remain resident post completion and a mge is reqd, the lender won't entertain it, as I say due to vacant possession and possessionary issues (ie the lender having difficulty in obtaining the property under a court order as a result of mge default).

Hope this helps

Holly

I think you are talking at cross-purposes.

If someone (including a member of the family) comes along and purchases the house for a realistic market price consequently discharging the mortgage, then the bank has little or no say, as long as it isn't already in the process of repossession. And even if they were, I can't see why that wouldn't be a solution for them, particularly if the housing market is slow.

After the purchase, the buyer may do what they like with the property (subject to any new mortgage conditions). If the aim is to rent the property back, it should be a BTL mortgage (though watch for small-print about related tenants).

holly_hobby

Cornucopia wrote: »

I think you are talking at cross-purposes.

If someone (including a member of the family) comes along and purchases the house for a realistic market price consequently discharging the mortgage, then the bank has little or no say, as long as it isn't already in the process of repossession. And even if they were, I can't see why that wouldn't be a solution for them, particularly if the housing market is slow.

After the purchase, the buyer may do what they like with the property (subject to any new mortgage conditions). If the aim is to rent the property back, it should be a BTL mortgage (though watch for small-print about related tenants).

No, I am not talking at cross purposes.

If a mge is reqd by the purchaser to facilitate the purchase, a Vendor may not sell their property to the individual (related or not) AND remain resident post completion - regardless of whether its a straight residential mge, or a buy to let (regulated or not) mge (which in essence would be a prohibited sale and rent back arrangement), and whether rent is charged or not.

Again, as previously stated, this is in respect of vacant possession (which the conveyencer confirms) and how it affects future possessonary issues of the lender - and NO lender will permit this arrangement.

Holly

Cornucopia

What about if the purchase is for cash?

In reality, if the vendor agrees in principle to vacate the property and then re-occupy, I don't see that anyone is actually physically going to check.

Are you assuming that the old and new mortgages would be from the same lender?

holly_hobby

Yes that would be fine (if the purchaser is happy with the potential future possession restriction), as I said if a mortgage is reqd the lender won't permit the Vendor remaining resident post completion

Hope this helps

Holly

lonestarfan

Simon_gloster wrote: »

As the above post states, usual protocol is to extend the term by 3 to 3 years in order to find time how to repay the loan. Documents will be signed by the borrower to state full and final payment on or before s certain date. If nit, proceedings will start to take place and charges/fees added.

In the short term she'll be fine but staet acting on it now as it's a big debt to be able yo convert to repayment on with the low income stated.

What does 3 to 3 years mean? Is that a mistake and you meant to say 1-3 years?
What evidence/experience do you have that usual protocol is to extend the term? What specific lenders have done that?

Op - what age is your mum?

Why can't she just carry on paying interest only to the Halifax until she passes away and it be sold on death? I take it that this is not permitted - why is that then? Is it a bank rule or an FCA rule?
I thought the Halifax did a mortgage where it was open ended interest only or have I got my wires crossed?

squeeks

lonestarfan wrote: »

Why can't she just carry on paying interest only to the Halifax until she passes away and it be sold on death? I take it that this is not permitted - why is that then? Is it a bank rule or an FCA rule?

The mortgage term has come to an end, so it is time to pay up. If it was a repayment mortgage then the balance would have been cleared. However as this is an interest only mortgage the amount borrowed is now due.

The OP can't borrow more money as she no longer has an income, to old etc... and can't repay the amount borrowed as she hasn't saved a penny it seems. It isn't a bank rule or an FCA rule, it is the agreement she entered into when taking out the loan. A mortgage is a time limited loan, and the time limit has now expired.

Annisele

Halifax did do a lifetime mortgage, where you just paid the interest until your death - but in OP's mum's case, she can't afford to pay the interest.

Equity release loans aren't an option, because she doesn't have enough equity.

Downsizing doesn't look possible either (again, because there isn't enough equity).

The only realistic option I can see is for the property to be sold and OP's mum to move to rented accommodation. If a family member can afford to buy the house for her (without a mortgage), then the rented accommodation step might not be necessary - but the sell the house step is.

macman

These points have already been raised, but I'm still not entirely clear on them. If your mother's residual income after paying the interest only mortgage is just £60pm, then presumably your father is actually paying most of or all the mortgage, and most of the other overheads?
If the equity in the property is only £20K then how can she possibly think that she can sell and 'downsize'? To what?

Jimbo1976

Halifax has been on the generous side with customers with interest only mortgages maturing. In some cases it simply gives the customer a 40 year interest only extension.

She needs to call them and explain the situation. Halifax will be dealing with a lot of customers in similar situations.