Interest only mortgages still available...

Alan_Cross

kingstreet wrote: »

If you want to remortgage, you need to match your requirements to what is available in the marketplace. You either research that yourself, or appoint a broker to do this on your behalf.

You need to have a credible repayment plan in place, based on the lender's requirements. Interest-only with no repayment vehicle is no longer available.

I guess I'm asking what this translates as.

We are simply a couple of years late in building up our savings. That's all this amounts to.

Do lenders accept the information in a savings account passbook as evidence of a 'repayment vehicle'? Alternatively, maybe the 'overpayment' history we have with our current lender..?

kingstreet

I'm sorry, but I cannot translate this.

The repayment vehicle requirements vary from lender to lender.

If you came to me, I'd establish what you have and try to find a lender which will accept that.

I can't set out every lender's criteria for you to pick the one which suits you best. Your own appointed broker would need to do that following a detailed factfind.

As I suggested, you either do the research yourself, or appoint a broker to do it for you.

HappyMJ

Alan_Cross wrote: »

I guess I'm asking what this translates as.

We are simply a couple of years late in building up our savings. That's all this amounts to.

Do lenders accept the information in a savings account passbook as evidence of a 'repayment vehicle'? Alternatively, maybe the 'overpayment' history we have with our current lender..?

Some lenders will accept fixed term deposits as repayment vehicle. ISA's can be used too. You'd have to research the market to find which ones do.

Alan_Cross

HappyMJ wrote: »

Some lenders will accept fixed term deposits as repayment vehicle. ISA's can be used too. You'd have to research the market to find which ones do.

Ah, somebody who knows. That's useful info, thanks, although any knowledge about the 'savings book/previous repayment history' thing would also be welcome.

Let_Us_See

Alan_Cross wrote: »

Ah, somebody who knows. That's useful info, thanks, although any knowledge about the 'savings book/previous repayment history' thing would also be welcome.

Lots of us "know" and derive a very good living from this knowledge. Generic advice, when correct, merely touches the surface, and even if a particular lender accepts, for instance, S & S ISAs, there are invariably qualifying terms and conditions.

There are a good spread of lenders still offering IO mortgages utilising various capital repayment/saving vehicle options (including existing equity), and I suggest a broker will save you a lot of time and effort.

Thrugelmir

Alan_Cross wrote: »

We are simply a couple of years late in building up our savings. That's all this amounts to.

Alternatively, maybe the 'overpayment' history we have with our current lender..?

The key point is that at the end of the mortgage term you won't have the funds to discharge the debt. So you your first call should be to your existing lender to ascertain whether they'll extend the mortgage term and if so what product terms they are prepared to offer. Then you'll at least know where you stand.

Mattygroves2

Extract from the Woolwich (Barclays) conditions are below - obtained via google. So the info is there but a broker would save alot of time as they would have it all to hand. A friend is currently obtaining an interest only mortgage through a broker so I know it is possible.

"Interest-only mortgages


The maximum loan to value allowed on an interest-only basis is 75% – or 50% if the sale of property is the repayment vehicle.
The maximum term for an interest only mortgage is 25 years and cannot extend into retirement.
There is a minimum income criteria required to be eligible for interest-only borrowing (including part and part borrowing):

• Sole application – the applicant must have a gross income of at least £75,000
• Joint application – one applicant must have a gross income of at least £75,000
• Joint application – where no individual income is over £75,000, joint gross income must be at least £100,000

A customer's gross income will be assessed on the criteria we currently use for income multiples.
Given the importance of the minimum income criteria, and to protect your customers, please ensure that the minimum requirements are met – particularly where a customer is at the margins of income threshold.
Debt consolidation is not allowed for existing or new interest-only borrowing. The only exceptions to this being where an existing customer has a drawn mortgage reserve balance and wants to consolidate this, or where a customer wishes to add an ERC to the balance of the mortgage when remortgaging to us from a competitor.
The Barclays Group requires all customers who take an interest-only mortgage to have in place a repayment plan for their loan on completion of the advance. Unless using sale of property to be mortgaged, we require the repayment vehicle to have been in place for 12 months. The Barclays Group will consider one, or a combination of the following as acceptable repayment plans for interest only mortgages:

• An existing endowment policy
• An existing stocks & shares ISA
• An existing (minimum 12 months) share, unit, or investment trust (professionally managed)
• Sale of mortgaged property (maximum LTV 50% and must have equity of at least £300k in the property. This cannot be used in conjunction with another repayment vehicle)

Where your client wishes to use any other method of repayment to repay the interest-only amount other than the acceptable repayment plans detailed above, this is not acceptable.
While it will be the customer’s responsibility to maintain the repayment strategy throughout the term of the mortgage, as a responsible lender, it is important for us to ensure all interest-only mortgages are supported by an acceptable repayment strategy which will be sufficient to cover the interest-only mortgage on maturity."

marsman802

We just completed last week on an interest only deal on a Buy to let.

There is more equity in the house now than the balance on the mortgage we are only paying interest on and therefore received literally no questions whatsoever that were different from any previous mortgage we've applied for - just supplied them with the tenancy agreement and that was that.

Possibly the easiest mortgage process I've ever gone through

Mattygroves2

marsman802 wrote: »

We just completed last week on an interest only deal on a Buy to let.

So not the same situation at all. The vast majority of BTL mortgages will be interest only as it is an investment so self financing until death.

Alan_Cross

Thrugelmir wrote: »

The key point is that at the end of the mortgage term you won't have the funds to discharge the debt. So you your first call should be to your existing lender to ascertain whether they'll extend the mortgage term and if so what product terms they are prepared to offer. Then you'll at least know where you stand.

The first point is that we could have the funds... by the sorry route of liquidating an asset which is making a good return for us.

The second point is that we already have the strongest of indications from our current lender that the end of our current product will be The End.

The third point is that, at that stage, I shall (just) have started drawing my state pension, although my wife will still have three years to go.

I find this all very frustrating and, given the huge mass of people who took out IO mortgages, find it hard to believe we are alone in this problem.