Interest only mortgage help please

glynb

Hi,
In 2006 we arranged an interest only mortgage of 90k through a broker who assured us it was the best option at that moment. so, 7 years later we are still paying it and the capital still needs to be repaid at the end of the term which is worrying us as I only have 23 years of my working life left. I have tried getting in touch with the mortgage people to ask if we can change it to a repayment mortgage but they tell us they are not in the mortgage market anymore (Southern Pacific)?? I'd change providers but our credit rating is not the best in the world if you know what I mean. We've never missed a payment on the mortgage ever.

Just feel now that the broker gave us bad advice at the time and looking for some advice as to which way we go from here?

We owe all together around 93k (after all fees were added) House is worth (according to zoopla) around (top end) 113k at the moment.

Thanks,

Glyn

Senior_Paper_Monitor

Does your mortgage permit overpayments / repayments?

I have a Southern Pacific offer on file somewhere - I'll try and look it out ?

If so, simply have a do-it yourself repayment arrangement. If not, simply save into an ISA designed to pay of capital after X years (the first option would be best as SP rates are higher than you would get in an ISA)

glynb

Thanks for the reply,

I've just emailed Acenden who run the mortgage on SPML's behalf to find out if we can make extra payments

Glyn

opinions4u

Just feel now that the broker gave us bad advice at the time

Did the conversation go: "I want the cheapest possible payment please" followed by "interest only, but at some stage you'll have to work out how to repay the debt"?

originalmiscellany

That would be the best thing you can do as SPM said.
If not, overpay and save - Do you know what your interest rate is on your IO mortgage? In 23 years is it possible to clear your mortgage in your current situation? Factor in interest rates on the rise in the next few years too...

Basically, what SPM said!

_Andy_

"Just feel now that the broker gave us bad advice at the time and looking for some advice as to which way we go from here?"

Convert to a repayment mortgage.

glynb

opinions4u wrote: »

Did the conversation go: "I want the cheapest possible payment please" followed by "interest only, but at some stage you'll have to work out how to repay the debt"?

It probably did at the time as we were assured that the prices would go up and up! well, how wrong was we?

glynb

Convert to a repayment mortgage.

Like I mentioned in original post, not the best credit file in the world

opinions4u

glynb wrote: »

Like I mentioned in original post, not the best credit file in the world

It shouldn't need a credit check.

It's likely then lender would welcome it.

ILW

Just open a savings account and put what would have been the difference into it every months. I would guess around £300 to be on the safe side.

Thrugelmir

glynb wrote: »

It probably did at the time as we were assured that the prices would go up and up! well, how wrong was we?

There was never any assurance as to the future direction of house prices. People in general saw no reason for the bubble to burst. Now with hindsight the truth is laid bare.

who assured us it was the best option at that moment.

That moment was 7 years ago. Ball has been in your court for a long time.