Interest only problem

tripleangel

My interest only mortgage comes to an end 1st November. Due to monetary problems with a divorce I had a small endowment which was paid up at beginning of this year and now I have just over £40,000 to repay to mortgage company.
I was made redundant with one of my two part time jobs in March and I now have more hours with my other job which gives me an annual income of £7,800 which I know does not give me enough for a remortgage.
Does anyone know of any schemes that might help me to stay in my house?

holly_hobby

No - as the lender would need to demonstrate they had assessed affordability for any remortgage (which would be on a capital and interest basis) or indeed any agreed extension of term with your existing lender.

What is the property worth ?

How much is the shortfall you will have ?

How old are you ?

Hope this helps

Holly

tripleangel

Property is worth about £140,000 and shortfall is £40,000.

I am 59

Wh05apk

Unless the lender will be "lenient" with you and extend the mortgage, your options are limited, your income currently would not justify a £40k mortgage, depending on property value, and your health you are close to being able to get an equity release/lifetime mortgage, but that is about all I can think of, unless perhaps, you have children with income who could be named on the mortgage?

holly_hobby

Right so the current os mge is 80k - and after you pay off the 40k you already have, there will be 40k residual mortgage that requires repayment.

Based on that, you are looking at in excess of 5 x current income to achieve a 40k advance/extension with your current lender - which would need to be on a capital and interest basis. I do think given your income and the resulting monthly repayment, that this will be a very tall order for either your lender to accept, or a broker to place - despite the relatively low 28% LTV (ie 40k mge on a value of 140k), but never say never, contact your lender and see what their initial feeling is.

Other than that, whilst at 59 yrs old, you qualify for a lifetime mortgage (which would circumvent the low income issue), the max loan available (which is based on age and a % of your property value), is presently still too low to redeem the 40k os mge you will have ...

If there were any extra funds you could throw at the debt, in excess of the 40k you currently have that would help.

Other than that, and if there is no likely hood of your income increasing, you may have to strongly consider selling and going into rented.

Call you lender, see what they can offer you, and take it from there ...

Hope this helps

Holly

borkid

Do you have children? Maybe one of them could stand as a guarantor so you could remortgage? It usually happens the other way around though. Far from ideal and I can see a few negatives but a possible option.