Pensioners being asked to leave their home

worriedformum_2

My parents own a house in wales and have re mortgaged a while back on interest only.
Their term came to an last year end and the mortgage company asked them to start paying repayment which they cannot afford. The mortgage company then said they are going to repossess the house and they had to put it up for sale. It remains unsold and now they are being asked to vacate the property by June this year.
QUESTION: should the mortgage company have agreed re mortgage from my parents who are in their 70's?
Any advice greatly appreciated.

ACG

This is not the lenders fault.
What did your parents think would happen at the end of the mortgage?

betmunch

worriedformum wrote: »

QUESTION: should the mortgage company have agreed re mortgage from my parents who are in their 70's?

Yes, why wouldn't they?



What did your parents say the repayment vehicle would be?

dunstonh

hould the mortgage company have agreed re mortgage from my parents who are in their 70's?

They are not minors and if there is no indication of mental illness or impairment that the bank could spot then your parents are free to do what they wish.

If the debt already existed, then shifting it around doesnt introduce new debt. (you say it was a remortgage so the debt was already there)

Thrugelmir

worriedformum wrote: »

QUESTION: should the mortgage company have agreed re mortgage from my parents who are in their 70's?

The problem existed prior to the remortgage. In that the original debt has always had a settlement date. Your parents were fully aware of the decision they made and of the consequences.

amnblog

You have not stated how much is owed, nor what the property is worth.

enthusiasticsaver

Years ago interest only mortgages were freely given out with people being free to choose their own repayment vehicle whether pension lump sum, stocks and shares isas and some swapped at some point to repayment. Your parents are 70 but presumably not mentally deficient so they must have realised at some point that they were going to have to pay it back. They will have to sell it and downsize unfortunately. Some mortgage companies these days will not actually lend to people past the age of 70 so they may struggle to buy again unless they have a lot of equity.

Blackbeard_of_Perranporth

worriedformum wrote: »

My parents [STRIKE]own[/STRIKE] live in a house in wales and [STRIKE]have[/STRIKE] re mortgaged a while back on interest only.
Their term came to an last year end and the mortgage company asked them to start paying repayment which they cannot afford. The mortgage company then said they are going to repossess the house and they had to put it up for sale. It remains unsold and now they are being asked to vacate the property by June this year.
QUESTION: should the mortgage company have agreed re mortgage from my parents who are in their 70's?
Any advice greatly appreciated.

I have corrected some elements of the original post. Some more knowledgeable commentators around this parish have already proffered their advise. BoP now proffers his.


Unless, when the additional interest only loan was taken out the occupants of the house were impaired in any way, I am afraid, unless they come up with some repayment plan, then in June, they will leave.

maninthestreet

When was this mortgage taken out???

Let_Us_See

I would be astounded if any lender agreed an interest only mortgage without a repayment vehicle (means of re-paying capital) to applicants in their 70’s, and therefore I have to assume the I O re-mortgage was processed when they were younger? The thought of your parents being forced to lose their home is rightly an emotive subject, and it is very easy to look for a scapegoat to blame – in this case, the lender.

However, there are always two parties to an agreement, and I don’t think it is unfair to ask your parents how they planned, at the time of the re-mortgage, to repay the capital. Without additional information it is impossible to assess whether or not a mortgage might have been mis-sold, and all I can confirm is I have experienced a significant increase in the last two years, of retired or close to retirement mortgage holders, being unable to repay the outstanding capital.

Their options mortgage wise? Apart from downsizing, probably only a lifetime mortgage, either rolled-up or paid interest, but this will be dependent on their age, property valuation, income (interest paid option), and balance of outstanding mortgage.

Additional information and clarification would be helpful!
Ages
Property value
Mortgage balance
Income in retirement

dunstonh

Have your parents considered looking at equity release as an option?