6yrs 11mths left on interest only - advice please

ValHaller

midebt wrote: »

where's this ''14yr'' thing comin from.....hubby retires in 7yrs
i retire in 9 yrs.....

we do not have a big enough pension to pay it off when we retire ...like i said maybe 10 grand ....

the 650/700 max is from our earnings ...what we could pay whilst we are working each month for the remainder of our working yrs ....

14 years is coming from your info. The monthly payment you told us to clear a £90,000 mortgage in 7 years tells us your interest rate is 4%. £700/month on £90,000 at 4% will take 14 years to clear.

midebt

ValHaller wrote: »

14 years is coming from your info. The monthly payment you told us to clear a £90,000 mortgage in 7 years tells us your interest rate is 4%. £700/month on £90,000 at 4% will take 14 years to clear.

but we wont need a mortgage of 90'00o if we sell and downsize

CFC

the guys were suggesting you extended the mortgage by 14 years, some people have enough retirement income to meet mortgage repayments.

midebt

sorry but we wont have enough income to do that

we will be getting lump sums with a monthly payment ..but it wont be enough ...i did say firther up the board it will prob total about 10'000.00

Kynthia

From what I understand, if you pay £700 per month from now it will take you 14 years to pay of the full mortgage on this house. However you are saying you can only afford to pay this amount for 9 years. Could you afford any repayment amount once you retire? Therefore you need to either pay more than £700 per month (by earning more, getting a lodger, reducing your outgoings, etc) or you need to sell and buy a cheaper home that will be paid off by retirement. A broker can give you advice on what value of property to buy that will allow you to do this, however don't forget to take into account the selling and buying costs too. The main thing is whatever you decide to do, start paying £700 each month on your mortgage now and don't wait a few months.

Goldiegirl

I would suggest downsizing as soon as possible, and paying as much money as possible to the new smaller mortgage, to pay it off ASAP.

It might mean living frugally, but there it plenty of help with that on MSE.

But al least it would mean that you have a home when you retire, with minimal housing costs.

Failing that, I think you'd have to accept you can't retire when you want to, and carry on working until your current mortgage is fully cleared.

silvercar

It seems your options are:

a) sell and downsize

b) delay retirement

c) raise more income now to make larger payments to reduce the mortgage.

holly_hobby

If you don't have affordability from pension income post retirement, and don't intend to work, then down scalling is the only option (as the os mge you have is far too high for a lifetime mortgage arrangement).

Alternatively instead of looking for any mge (if you have sufficient free equity from sale, and/or savings to top it up if reqd). how about shared ownership with a local authority, as this will give you security of tenure, and a lowish financial input if you pch 25% (which is typical).

You will of course have a rental commitment (which will be annually reviewable) with the HA & servicing costs.

My in-laws did this, they down sized from a large 5 bed (and yes they were on IO, with no repayment vehicle, having cancelled their endowment), and now live in smallish 2 bed bungalow with 30k cash from their sale buying them a 25% stake. Whilst initiallly they were disappointed that they were moving out of a big house and a very nice area, they realised that you have to cut your cloth accordingly, and having made the jump they now have lots of spare cash, smaller utility bills etc, inc running a nice car and several holidays a yr and have never been happier and say they wished they had done this yrs ago (they're in the late 60s).

Of course you could sell up, and simply go into rented, using the free equity as a savings pot. If you go with social/housing association housing, you will have more security of tenure (as long as you don't breach terms), but your choice of property may not be there .. .although with your ages I would expect you to qualify for a bungalow, but there may be a wait.

With respect to your current provider, they may give you a small extension to term (typically max 5 yrs if affordability is there) to permit you to sell the property, but never the less without any repayment vehicle, you will need to sell up to redeem the mge, so planning now is the key to keeping as much control as possible over the situ.

Hope this helps ... wish you well

Holly xx

midebt

silvercar wrote: »

It seems your options are:

a) sell and downsize

b) delay retirement

c) raise more income now to make larger payments to reduce the mortgage.

thanks
we dont plan to delay retirement - we are retiring at the correct age 66 ...... unless i am able to work another yr ....other than that retirement age is 66.

if we sell ...our property for 120'000....we will pay the 90'000 owed and have 30 left to buy a 'downsize ' terrace / so if we put 20+ deposit ....the property may cost around 75 -80'000 ....so could this be do-able over 7 years ........or not

will the lenders accept 'payments' off our mortgage if we are on interest only

midebt

holly_hobby wrote: »

If you don't have affordability from pension income post retirement, and don't intend to work, then down scalling is the only option (as the os mge you have is far too high for a lifetime mortgage arrangement).

Alternatively instead of looking for any mge (if you have sufficient free equity from sale, and/or savings to top it up if reqd). how about shared ownership with a local authority, as this will give you security of tenure, and a lowish financial input if you pch 25% (which is typical).

You will of course have a rental commitment (which will be annually reviewable) with the HA & servicing costs.

My in-laws did this, they down sized from a large 5 bed (and yes they were on IO, with no repayment vehicle, having cancelled their endowment), and now live in smallish 2 bed bungalow with 30k cash from their sale buying them a 25% stake. Whilst initiallly they were disappointed that they were moving out of a big house and a very nice area, they realised that you have to cut your cloth accordingly, and having made the jump they now have lots of spare cash, smaller utility bills etc, inc running a nice car and several holidays a yr and have never been happier and say they wished they had done this yrs ago (they're in the late 60s).

Of course you could sell up, and simply go into rented, using the free equity as a savings pot. If you go with social/housing association housing, you will have more security of tenure (as long as you don't breach terms), but your choice of property may not be there .. .although with your ages I would expect you to qualify for a bungalow, but there may be a wait.

With respect to your current provider, they may give you a small extension to term (typically max 5 yrs if affordability is there) to permit you to sell the property, but never the less without any repayment vehicle, you will need to sell up to redeem the mge, so planning now is the key to keeping as much control as possible over the situ.

Hope this helps ... wish you well

Holly xx

thanks for this...very helpful....though just a bit confused with the shared ownership ??? do u mean on the new property they bought ???? who was this with ???/

if we do go into rental we would def put the 'equity' into a savings pot for some years....

quote; and now live in smallish 2 bed bungalow with 30k cash from their sale buying them a 25% stake.quote;

what happens if they want to come out of this 25% ownership ??? how do they get there money back ???