Interest Only & Equity Release Questions

Monty53

Thanks for your replies SPM and LUS.

I have been told that I'm too old to change to another mortgage provider,therefore I have to stay with C&G.

In answer to your questions :
I'm employed and would like to retire from this job at 65, so in 8 years.
I'm already drawing one pension which pays me approximately £600pm,this is in addition to my salary ... I have just seen my tax summary for 2013-14 which states taxable income £47663 and tax free £9440.
I live south of London in the commuter belt so don't anticipate any serious drop in property prices, I can't downsize due to personal commitments,location to work and the fact that property prices here are now out of my reach.
I have Googled Specialist Mortgage advisors and WHICH? has thrown up a few contacts, would you say these are reliable?

Senior_Paper_Monitor

What you have been told is nonsense - this is certainly not an immediate answer, high street solution but on the limited information available a sensible plan should be doable.


Talk to the broker(s) and see how comfortable you feel.

Let_Us_See

Monty53 wrote: »

I have been told that I'm too old to change to another mortgage provider, therefore I have to stay with C&G.

Probably true, but not due to age. With over 5 x current income you are very unlikely to be able to re-mortgage to another lender on an interest only basis without a current repayment vehicle, and with a proposed 8 year term before retirement, repayment options will probably be deemed unaffordable by most providers.

In answer to your questions : I'm employed and would like to retire from this job at 65, so in 8 years.

Without assessing your income in retirement, how do you plan to maintain mortgage payment in retirement to the end of the 14 year term?

I'm already drawing one pension which pays me approximately £600pm,this is in addition to my salary ... I have just seen my tax summary for 2013-14 which states taxable income £47663 and tax free £9440.

...................and you have not been able to make any capital repayments?

I live south of London in the commuter belt so don't anticipate any serious drop in property prices, I can't downsize due to personal commitments,location to work and the fact that property prices here are now out of my reach.

Downsize/re-locate once you retire?

I have Googled Specialist Mortgage advisors and WHICH? has thrown up a few contacts, would you say these are reliable?

Impossible to tell - all a bit of a lottery. No need for a specialist (whatever that signifies) adviser, an experienced and forward thinking adviser should be able to provide a solution. Far better to ask friends and family for a recommendation.

At this stage I believe it is more important to obtain your retirement pension income/lump sum draw down facility options before meeting a mortgage adviser, as this is one of the first questions you will be asked.

dimbo61

For now why not overpay a set amount each month on top of your IO mortgage payment. Say £1000 a month
You may have to move area and/or downsize when you retire.
You have equity in the property and may have even more in 14 years.
You are on a good rate at 2.5%
What was the plan to repay the mortgage ?

Monty53

Thanks again everyone for your advice.

It is my intention to significantly overpay IO or arrange a new repayment mortgage.

I have been overpaying £200-£300 pm for a while but was told by IFA this wasn't enough to make a difference.

Ironically today I received a letter from C&G, Stephen Noakes, "Home and Lifestyle" Director �� telling me my mortgage is IO ... and to call to discuss switching to repayment ... well I'm still waiting for them to call me back after arranging an appointment 18 months ago and last week I asked Lloyds for an appointment in branch ... guess what, nothing ��

Let_Us_See

Monty53 wrote: »

I have been overpaying £200-£300 pm for a while but was told by IFA this wasn't enough to make a difference.

Unfortunately, I have to agree.

Please don't put your long term hope on C & G providing a solution as they will almost certainly request the loan to be re-paid at the end of the term. Whatever you think, they are not the bad guys. The only way to solve this is to be proactive. Can you make substantial capital payments, will you have sufficient income in retirement to continue with mortgage payments and reduce borrowing to a level where a lifetime mortgage can replace residential borrowing? Your first objective is to assess income into retirement as this may be pivotal in managing your mortgage and remaining in your home.