End of mortgage term question

rms1

getmore4less wrote: »

it has always been in your control --- your choice to run out of time.

And you know that was a choice do you?

Annisele

rms1 wrote: »

I am mainly concerned about what stance the Halifax will take at the end of the term in other words, would it be "you have 3 months to get out" or more along the lines of "you can have an extra year to sell your property"

No idea - even if you knew what Halifax would do now, that wouldn't tell you what it was likely to do in two years' time.

Halifax can't just chuck you out of your house though. Ultimately, if you don't pay the capital at the end of the term, and you can't come to some other agreement with Halifax, it'll take you to court for possession of your property. It would then be up to a judge to decide whether to grant the possession order.

If you can show that you're doing something sensible (eg marketing your property at a sensible price) then Halifax is less likely to take you to court in the first place - and even if it does, the judge is less likely to grant possession.

If you can, it's probably better to downsize sooner rather than later. Much easier to do it on your timetable than a lender's. That does depend on where in the country you are; there are places where your equity would buy you a very decent small house, and others where you wouldn't get a cupboard.

(NB I'm assuming you're in England or Wales. I think things work similarly in Scotland/NI, but there will be some differences).

Thrugelmir

rms1 wrote: »

I very much appreciate what you are saying however, we are highly likely to be down sizing and selling the property well before 10 years. I would just feel better if I knew that the decision when to sell was ours and not a forced one.

Better that you make your own plans than be dictated to. With a year left on the mortgage term see what options are available both from the Halifax and the wider market. Any short term extension from the Halifax will be on their terms not yours.

rms1

Thank you all for your suggestions. I have just over 2 years to think about this so no urgent panic.

getmore4less

getmore4less wrote: »

it has always been in your control --- your choice to run out of time.

rms1 wrote: »

And you know that was a choice do you?

rms1 wrote: »

Thank you all for your suggestions. I have just over 2 years to think about this so no urgent panic.

It is this sort of thinking that will just give you less time.


You don't suddenly have a £160k shortfall this will have been trundling along for a few years and the clock is ticking.


It become clear very quickly if not on target to clear the debts looking at the years leading up to 5 years to go , the amount per month needed to clear the debt grows
(eg £160k @ 3%).
9. £1300
8. £1500
7. £1700
6. £2000
5. £2500


Those are fairly substantial sums to be generating from free cash flow and investment returns.


If there will not be any chance of raising £160k in a few years you need to be planning to sell, any other option is just delaying


You say in your opening post you don't know where your finances are going, the business clearly has not been generating much free cash flow to reduce the debt significantly, so being dependant on that going forward is a big risk.


What's the housing market like in your are?
Many areas it is quite buoyant , will it be the same over the next 2 summers?


Given the time you have had to review this shortfall, you should have a fairly good idea of the downsize strategy in place, value, type, size, area you could be moving to.


Saying "oh I have plenty of time its 2 years" is just giving up control of the timing to your lenders goodwill to let you extend the loan.........

rms1

I have been communicating with the Halifax and discussing my options. They are prepared to give me an extension to the term till I am age 74. This will be on part interest only and part repayment. The monthly payments would be easily manageable . Admittedly, when the term is over there will still be a shortfall of 100k but that is 11 years away by which time we would probably have downsized anyway or managed to clear the remainder.


When I say. "I don't know where my finances are going for sure" I say that in a very positive way as the business is continually growing.


The property is in a desirable area and the prices are rising.

getmore4less

That's good news and gives you time to plan properly.


get that contract change in place ASAP before they change their minds.