Interest Only come to the end and no funds to pay the capital back

TH1878

HappyMJ wrote: »

Many times...it's much better if they can sell the house themselves...even with a small amount negative equity. They should be able to borrow £9,000 from somewhere. Personal loans, credit cards, friends, family anywhere. I wouldn't wait for house prices to rise...in my opinion the interest on the mortgage and any maintenance costs over the next few years will offset any potential increase in house prices. If they at least put it on the market at a fair asking price in the next few weeks the lender will see they are doing something towards resolving the problem and should continue to extend.

Thank you for this. That's why I told them to start getting valuations from estate agencies, with this in mind.

:money:

Thrugelmir

TH1878 wrote: »

They are also required by the regulator (the FCA) to take into account any reasonable requests to repay debts (which this would become) before taking court action.

The mortgage has come to the end of it's term. That's the heart of the matter. The contract terms are explicit regarding the repayment of the debt. No court is going to rule against a well established facet of English law.
This is going to be an issue for many people in the years to come, with some 4 million interest only mortgages to be redeemed.

TH1878

Thrugelmir wrote: »

The mortgage has come to the end of it's term. That's the heart of the matter. The contract terms are explicit regarding the repayment of the debt. No court is going to rule against a well established facet of English law.
This is going to be an issue for many people in the years to come, with some 4 million interest only mortgages to be redeemed.

I'll let you know what happens but my view is that if they put the house on the market, continue to keep the house insured and continue with the mortgage repayments, then it's a reasonable request to ask for a short extension and FCA rules state they have to consider it. They may knock it back but they have to consider the request.

It's also in the lender's interest because there is no way that they would realise even £120k if it was repossessed

keystone

TH1878 wrote: »

It's also in the lender's interest because there is no way that they would realise even £120k if it was repossessed

Computers make these decisions these days not people and usually once decision taken the people can't reverse it. Don't expect the decision to be logical at a "best interest" level either for lender or borrower.

Cheers