Just discovered partners mortgage details

amyanderson2

Hi all, I'll keep it as short as I can.

I was recently helping my partner with his finances and discovered he is paying an interest only mortgage and has been for years. He has no way of paying for this at the end of term.
He applied to his bank for remortgage and got declined even tho he has approx 30% equity.
Apparently there is a black mark against his name and after looking at his credit files he missed 3 months of paying store cards due to difficulties but always paid mortgage.
These have been paid off in full for approx 3yrs now.

He is now in a position where apparently he will struggle to get a mortgage and yet is throwing money away every month.

Anyone have any ideas?
Thanks

antrobus

amyanderson2 wrote: »

...Anyone have any ideas?
...

Start making extra repayments to the mortgage?

getmore4less

amyanderson2 wrote: »

He is now in a position where apparently he will struggle to get a mortgage and yet is throwing money away every month.

Anyone have any ideas?
Thanks

why do you think they are throwing money away?

Thrugelmir

Why don't you become party to the mortgage?

amyanderson2

He can't currently afford to pay anymore unfortunately.

I am not 100% sure on how an interest only mortgage works but after seeing his last few statements the amount owing isn't budging after he has paid out a lot of money therefor to my untrained eyes it seems as though he us throwing the money away.

I can't join him on the mortgage as we are not living together at present (and have no immediate desire to do so lol) and I would only make matters worse as my credit rating is in tatters!

Thanks for replies

Mojisola

amyanderson2 wrote: »

I am not 100% sure on how an interest only mortgage works but after seeing his last few statements the amount owing isn't budging after he has paid out a lot of money therefor to my untrained eyes it seems as though he us throwing the money away.

An interest only mortgage works by him only paying the interest each month - the amount he borrowed stays the same until the end date when the lump sum has to be paid back.

amyanderson2

Mojisola wrote: »

An interest only mortgage works by him only paying the interest each month - the amount he borrowed stays the same until the end date when the lump sum has to be paid back.

Yeah that is what I had thought, he has nothing in place to pay the lump sum at the end and would obviously be better in a repayment mortgage but his credit rating prevents this. Seems he is stuck

Thanks

Landofwood

amyanderson2 wrote: »

Yeah that is what I had thought, he has nothing in place to pay the lump sum at the end and would obviously be better in a repayment mortgage but his credit rating prevents this. Seems he is stuck

Thanks

You still have to pay interest on a repayment mortgage. You said he can't afford to pay more.

I'm confused.

Is he on a high rate?

getmore4less

might be better getting someone that understands finance to have look.

debtfreewanabee board would be a better place starting with a SOA.

http://forums.moneysavingexpert.com/forumdisplay.php?f=76

magpiecottage

An interest-only mortgage is only cheaper because you are not paying anything off the loan. You only pay interest.


If you want to convert your existing loan to a repayment one then you need to increase your payments accordingly.


If you care to post the amount of the loan, the interest rate and the date it is due to be repaid, we can work out the amount you would need to pay each month - or you can ask the lender.

stator

Time will heal his bad credit history and make a remortgage more likely, so continuining to pay the interest only mortgage isn't a bad idea.

Is he on a bad deal at the moment? Would remortgaging reduce his payments a lot do you think?