Morgage Ended BUT NOT PAID OFF

Sidekick_2

This could be an interesting scenario:
I have had a endowment policy mortgage for 25 years, got divorced 21 years ago, endowment cashed in by ex wife against my wishes due to negative equity and financial situation at the time I was forced to take the house on. however there were mortgage arrears due at the time of the divorce, so the mortgage company would not transfer equity at that time.
I have continued to pay the interest and approached the mortagage many time and revert it to a repayment mortgage but they have refused for various reasons.
The mortgage has now lasped 2 months ago and obviously I have no payment fund to repay the mortgage. recent correspondence from the mortgage company said they could refer it to a 5 year plan, I have requested this and they are now asking for payment in full, threating legal action etc.
I feel they are being unreasonable as there own advisors admit my hands are tied, any advice would be appreciated.
Yours sincerely
Mr Tied Up :mad:

Caz3121

what reasons did they give for refusing to transfer to repayment and was this 20 years ago when the you knew the endowment was gone. What plans did you have to repay the original loan?

fiesta04

You divorced 21 years ago. Why have you not repaid any money off the mortgage? How did you think you would repay the mortgage?

F4

JoolzS

Am I right in thinking you still owe the full original mortgage amount? If so, does your salary allow you to remortgage for that amount over the years you still have left before retirement?

I find it strange that in 21 years you couldn't get this sorted out. I guess that your best option is to sell up, take the equity and buy something smaller.

Sidekick_2

Caz3121 wrote: »

what reasons did they give for refusing to transfer to repayment and was this 20 years ago when the you knew the endowment was gone. What plans did you have to repay the original loan?

There was arrears at the time(1991) and could not take out an endowment as the house is still in joint names

Sidekick_2

JoolzS wrote: »

Am I right in thinking you still owe the full original mortgage amount? If so, does your salary allow you to remortgage for that amount over the years you still have left before retirement?
Yes !
I find it strange that in 21 years you couldn't get this sorted out. I guess that your best option is to sell up, take the equity and buy something smaller.

So do I, but if you have bad credit in the past you may understand.

Sidekick_2

fiesta04 wrote: »

You divorced 21 years ago. Why have you not repaid any money off the mortgage? How did you think you would repay the mortgage?

F4

interest only mortgage, but still in joint names

Tenyearstogo

What did you do with the money you wanted to put in an endowment but weren't allowed to?

somethingcorporate

I simply do not believe that they would not let you transfer onto a repayment mortgage. What reasons did they give? Why has it taken 20+ years to deal with this?

maninthestreet

Why would a mortage lender refuse to switch to a repayment mortgage because of arrears? Surely that would be a way to reduce the arrears?
How much is outstanding on the mortgage, and what is the approximate value of the property? What other debts do you have?

holly_hobby

Sidekick wrote: »

There was arrears at the time(1991) and could not take out an endowment as the house is still in joint names

The endowment policy (low cost or otherwise) did not have to be in joint names even if the mge remained so.

You have been aware for over 2 decades that you had no repayment vehicle, and wanted to retain the house - but did nothing about this, including making lump sum reductions to reduce the overall debt and redemption figure.

Fast forward 21 yrs, the mortgage term has now ended and the mortgage company want repaying .... you have no repayment vehicle or any plans so their only alternative (if you haven't offered voluntary sale) is to seek a forced sale.
to bring the matter to a conclusion.

There are 3 solutions (income/affordability supporting of course)

1. You switch to repayment and seek to extend the mge term with the current lender - although the max term (if you are middle aged or later) available may make the repayments unaffordable.

2. You remortgage to an alternative lender on a repayment basis, whom will permit a longer more affordable term (ie have a max age in excess of 75 yrs, of which there are a couple of providers), whilst simultaneously effecting a transfer of equity( to remove ex) at the same time.

3. you sell up and move on ...... with the proceeds divided as per your divorce agreement.

Shelter http://england.shelter.org.uk/ and your local CAB will help with mediation etc - but it is vitally important to get into some dialogue with your lender as a matter of urgency.

Hope this helps

Holly