Mortgage Extension Declined

Assenav

Our mortgage has come to an end and we still owe £37,000. We had an interest only mortgage and over the years managed to pay a bit extra but still owe this amount.

We both work full time but we're with a DMP which is probably why the building society have declined our mortgage extension application.

The building society want their money no matter what. What can we do? We can easily afford to repay the amount if we had a loan for 15 years but we can't risk blindly applying for loans as each time you're tuned down it goes against your credit rating.

Would it be possible to release equity and pay it off that way? The house is worth approx £140,000.

Any advice would be greatly received.

Many thanks.

antrobus

Assenav wrote: »

....Would it be possible to release equity and pay it off that way? The house is worth approx £140,000.....

You could obviously sell the house and release 100% of the equity, releasing sufficient funds to repay the mortgage debt. And no doubt all your other debts as well. Although something tells me that's not the answer you're looking for.

Otherwise 'equity release' probably won't save you. Aviva says that for a £140k, with joint lives and youngest at 55 they'd release a maximum of £27,300; which would still leave you £10k down.

http://www.aviva.co.uk/equity-release/equity-release-eligibility-calculator.html

Thrugelmir

Assenav wrote: »

We both work full time but we're with a DMP which is probably why the building society have declined our mortgage extension application.

There's your issue. You'll need to consider your options carefully. Any possibility of down sizing?

brit1234

Assenav wrote: »

The building society want their money no matter what. What can we do?

Weren't you meant to have a repayment vehicle such as ISAs, shares when you took out an interest only mortgage? What happened to it?

Maybe you should downsize.