Should I remortgage from SPML interest only??

tycoon1day

Hi people, and thank you in advance if you are about to read my story and post some helpful advice :beer:

Here is my story;
Unusual situation but I never moved out of the family home I grew up in and ended up buying our old council house under the 'right to buy scheme' in around 2005. Guess I'm sentimental, We had been there 25 years and was the only home I'd known. It's a nice 3 bed semi on a generous corner plot with parking and garage and in a nice quiet part of East Anglia. I was never going to get on to the local property ladder any other way and just couldn't let my mum get moved on by the council if I ever left. Now it's just myself and my mum who share the house.

We secured the purchase using both of our salaries to get a mortgage with SPML. Also known as Southern pacific/ Capstone/ Ascenden. I understood at the time that they were a sub prime lender and were led to believe that they were pretty much the only people that would lend us the money because it was a 'right to buy' and because I had a single ccj from 6 years previous. It was a self certified mortgage because I was a self employed taxi driver. My mothers income was also included to help. Anyway the deal was done and I was happy that I was actually a home owner. I believe the amount we borrowed was £157k.

2 years later (2008) after the fixed term was up, we remortgaged and went interest only. This bought the monthly payments down from around £1250 to £560 and was a welcome help. We remortgaged for 200k and spent a lot of the money on the house.

We have been on this plan ever since and I am very unsure what to do now. I changed career direction 5 years ago and am now in a stable sales job earning between 35 and 40k I have done some reading lately about SPML and mis selling of mortgages and am very concerned over what I have read. Most of the cases sound very similar to my own experience.

I am now unsure wether to keep as I am or remortgage. I am off for some financial advise from an advisor in the next few days but really do feel quite lost when it comes to mortgage know how! I haggle every day for a living and will spend hours online searching for the best deals whenever I want to buy something, yet I can't help but think that I'm missing out on the biggest difference of all that will effect my finances.

Are interest only mortgages completely a thing of the past? If I was to remortgage, my objectives would be to release some capital (continued home refurbishment) and to ultimately save money on what I will be paying back in total.

Here are some stats:

The house is currently worth in excess of 270k
My p60 13/14 shows 35k/ projected 40+ for next year
My mothers p60 13/14 shows approx 15k
I have 10k outstanding on a bank loan (2 year term remaining)
I have 8k balance on a 0% credit card

The ccj in 2001 was the only financial blemish I have ever had. I have never missed or been late on any mortgage payment. I also pay all of my direct debits and credit cards on time every time. I have basically been squeaky clean since being a home owner and guess I must be at the high end in term of credit ratings

Ideally we would like to investigate the possibilities of transferring the mortgage solely into my name. Has anybody else had dealings with SPML mortgages and looked into the mis selling description?

Some advice would be most appreciated.

Thanks again :j

Funny_old_game

IF you were mis sold it wasn't from SPML, they were broker only and not a direct lender.

Your never going to be able yo transfer the mortgage on your income, let alone with debt.

Therefore remortaging to release equity is even more remote.

Overpay your mortgage otherwise time will pass and you have £200k to pay back. Not a good situation to be in.

ps interest only mortgages are around but very very hardto get. Not like when you got your mortgage it was probably no questions asked. Not anymore.

Trentenders

I'm confused about what the mis-selling allegation is(?)

Annisele

Why do you think the mortgage was mis-sold? It's pretty hard to mis-sell a mortgage (not impossible), and you haven't said anything that screams mis-selling to me.

As to your current situation, you won't be able to transfer the mortgage into your sole name if your Mum will still be living in the property. Will she be staying, or are you trying to buy her out so she can afford to buy somewhere else? I think that what's sensible here depends on why you want the mortgage to be in your sole name.

What is your plan for paying back the capital? Interest only mortgages aren't entirely a thing of the past, but to get one you do need to demonstrate that you have some reasonable plan for repaying the whole loan.

Lenders may be reluctant to lend you any more money. The fact that you borrowed more money in 2008, have £18k of unsecured loans, and want to borrow more, might suggest that you've been spending more than you've been earning for a considerable period. (I appreciate that might not be the case at all - but lenders will be concerned about how the debt has built up).

Your Mum's age may also be an issue - many lenders like the term to finish before the oldest borrower is 75.

Thrugelmir

First step should be to start paying down the mortgage. Interest only amounts to you renting the property. Time ticks away and so does the length of time you have to repay it.

Having said that your unsecured debts won't help you either to repay the mortgage or in terms of affordability if you try to remortgage.

With a mortgage debt of £200k you are exposed to the winds blowing in with higher rates. A 2% rise would add £350 to your monthly outgoings alone.

Perhaps time for a financial review. Take stock of where you are and what's achievable.

I have done some reading lately about SPML and mis selling of mortgages

You choose to switch onto an interest only basis...........

vectistim

Right to buy + CCJ + self-cert income + mother's income = not a case to present to a standard lender

You've already increased the mortgage from £157 to £200k to improve the house - £43,000 buys a lot of refurbishment, and now you want to do some more?

I think you should be ignoring raising more, but look into a remortgage to a lower rate, and change back to repayment, and see whether you can clear the loan any quicker.