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Interest only mortgage
monty-doggy
Posts: 2,134 Forumite
Sorry this is a bit long!
My OH is tied into a mortgage with his ex.
He lived there and paid the mortgage in full every month after she left.
When he started seeng me 5 years ago she went mad and moved back in.
We found a rented place right away.
She is now living in the house with 3 children who he has regular contact with.
She switched to interst only the day she took over the payments and missed 9 payments in 14 months. After paying on time for six months the lender, Birmingham midshires, allowed the arrears to be consolidated onto the end of the loan.
Amount outstanding is 132k, original loan was 130k and the house is probably worth 125-130.
My OH wanted to sell it or let her take over the mortgage, which is what she wants too but she has serious credit issues and can't get a mortgage so my OH is stuck for now.
At what point will the lender want to know a plan for paying off the capital?
And what happens if she doesn't have a plan?
My OH is tied into a mortgage with his ex.
He lived there and paid the mortgage in full every month after she left.
When he started seeng me 5 years ago she went mad and moved back in.
We found a rented place right away.
She is now living in the house with 3 children who he has regular contact with.
She switched to interst only the day she took over the payments and missed 9 payments in 14 months. After paying on time for six months the lender, Birmingham midshires, allowed the arrears to be consolidated onto the end of the loan.
Amount outstanding is 132k, original loan was 130k and the house is probably worth 125-130.
My OH wanted to sell it or let her take over the mortgage, which is what she wants too but she has serious credit issues and can't get a mortgage so my OH is stuck for now.
At what point will the lender want to know a plan for paying off the capital?
And what happens if she doesn't have a plan?
0
Comments
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"And what happens if she doesn't have a plan?"
She'll eventually have to sell0 -
Ugh! IF you haven't got a strategy, it will cause problems further on down the line. When the mortgage was signed, the owners had to sign a doc (I think) stating that they had a vehicle to pay their mortgage off.
As the house is in negative equity that's the initial problem stopping you selling it, in that even if you sell it tomorrow, you will ahve to find say 5k plus fees to break even.
As your OH has a bad record and no mortgage is possible, it is going to be a struggle.
Does the rent cover the mortgage currently?Feb 2012 - onwards MF achieved
September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
April 2018 down to 28.00 months vs 30.04 months at normal payment.
Predicted mortgage clearing 03/2047 - now looking at 02/2045
Aims: 1) To pay off mortgage within 20 years - 20370 -
Sorry I meant is there a point where they will want a repayment rather than interest only and how long will a lender let interest only run?
If she sells she could end up owing on it!!0 -
originalmiscellany wrote: »Ugh! IF you haven't got a strategy, it will cause problems further on down the line. When the mortgage was signed, the owners had to sign a doc (I think) stating that they had a vehicle to pay their mortgage off.
it was not bought as interest only she changed it
As the house is in negative equity that's the initial problem stopping you selling it, in that even if you sell it tomorrow, you will ahve to find say 5k plus fees to break even.
As your OH has a bad record and no mortgage is possible, it is going to be a struggle.
Does the rent cover the mortgage currently?
the house isn't rented out, my OH and I are in rented, his ex is in the house paying interest only
Sorry if I didn't make sense0 -
monty-doggy wrote: »
If she sells she could end up owing on it!!
Your partner has a liability too as the mortgage is joint.0 -
Thrugelmir wrote: »Your partner has a liability too as the mortgage is joint.
I know, he's paying towards it at the moment as well as maintenance. I just wondered how long they Will let it run, with no capital being paid or a plan for it.0
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