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Interest only letter from C&G

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Comments

  • Goldiegirl
    Goldiegirl Posts: 8,806 Forumite
    Part of the Furniture 1,000 Posts Rampant Recycler Hung up my suit!
    I'm afraid some people posting have misunderstood the circumstances. Perhaps I didn't explain them in enough detail, or perhaps they have got the wrong end of the stick - either way very little of the 'advice' on here has been relevant to my position. I did not ask for advice about the amount outstanding, but about whether or not anyone knew if C&G could force us to move the IO amount onto repayment. (The repayment amount was taken out some time ago to fund extortionate roofing and decorating charges by our then freeholders).
    I don't consider myself thin skinned, or unable to listen to advice if given fairly. I didn't come on here looking for sympathy, but nor did I expect condemnation. Far from being supportive some of the comments have been judgmental, which isn't helpful to me, and probably not too good for the karma of those making them.

    In answer to your question.

    No, they can't force you to move the interest only payment to repayment.

    But what they can do, is, at the end of the term of the mortgage, demand that all outstanding monies are repaid. If you weren't in a position to clear the outstanding funds, you might have to sell the house to clear the mortgage. Or, worst case scenario, they could even start possession proceedings.

    So, it is essential that you clear the whole mortgage before the end of the term

    If you have a plan in place, just tell them, that's all they want - they are not going to force you to do anything at this stage.
    Early retired - 18th December 2014
    If your dreams don't scare you, they're not big enough
  • Ma77hew
    Ma77hew Posts: 118 Forumite
    Perhaps totally unwanted advice, but one of your posts indicates your not 100% confident with your plan, when doing your plans I would look at it like this:

    You haven't given any numbers so i've made them up :)

    £50k repayment 4%/25 years = £264 pm
    £50k Interest Only 4%/25 years = £167 pm
    Total = £431

    For you to be making "Overpayments" you'd need to be paying more than £431 pm in this example, otherwise your not, your just making regular payments.

    If your repayment mortgage has the same interest rate as the interest only or if its higher, then it doesn't make sense to overpay it as that one has a payment plan already. It only makes sense when the interest on the repayment mortgage is higher, or if there are penalties on the other.

    To pay off the interest only mortgage in 6 years you'd need to pay £782 pm which is £615 more than you currently pay, seems achievable with your loan coming to an end.

    Delay by 1 year and you'll need to pay £982 pm (£815 extra), 2 years and £1,129 pm (£962 extra).

    I guess as long as your plan shows where the extra payments are coming from, everything should be rosy :)
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