Interest only mortgage?

Georgiah406

Hi all, unfortunately there is no endowment policy in place. The loan was only taken out 10 years ago when my grandparents got divorced and my grandmother bought him out of the property and moved the mortgage to Halifax. As I said before, I work in mortgages myself and find it abhorrent that she was given the mortgage in the first instance. My nan struggles to remember taking the mortgage out but from what she has told me, it seems like she went through a broker who just tried to make it affordable for her for the time being (although at her age she was never going to be in a position to overpay)

Georgiah406

In terms of the value of the house, it is honestly worth about 75k maximum as it's quite out dated. Unsure if my grandmother took out any additional loans with her mortgage when the bought my grandfather out.

Georgiah406

Quick update. I have spoken to my grandmother who DID have an endowment policy around 30 years ago however this fell through and the insurance broker actually went to jail for spending the insurances. My grandparents never got any money back from this. In terms of the value, when my grandparents separated the house was valued at 110k and my grandad got a pretty good pay out however the house prices have now fallen for this type of house in Stoke on Trent. When my nan took out the mortgage in her own name, she was told she would need to save to pay the mortgage/sell/there would a solution nearer to the time. I definitely think this would class as mis-selling but 10 years down the line I'm not sure there's much she could do to actually prove it

Thrugelmir

Georgiah406 wrote: »

I definitely think this would class as mis-selling but 10 years down the line I'm not sure there's much she could do to actually prove it

And the alternative? She would have rented I assume. Therefore what loss has she has suffered.

We've had 6 years of record low interest rates so plenty of time to of at least repaid some of the capital. People have to accept responsibility for their own choices and actions.

ViolaLass

Georgiah406 wrote: »

When my nan took out the mortgage in her own name, she was told she would need to save to pay the mortgage/sell/there would a solution nearer to the time. I definitely think this would class as mis-selling but 10 years down the line I'm not sure there's much she could do to actually prove it

If she was told what she would need to do in the long term, where's the mis-sell?

HappyMJ

She can sell and move into rented accommodation and pay rent. If her income isn't high enough she'll get some housing benefit.

Pixie5740

Georgiah406 wrote: »

When my nan took out the mortgage in her own name, she was told she would need to save to pay the mortgage/sell/there would a solution nearer to the time. I definitely think this would class as mis-selling but 10 years down the line I'm not sure there's much she could do to actually prove it

If your gran was told that she would have to save, sell or hope for a solution nearer the time in what way was she mis-sold?

My mum used to work in the mortgage center for one of the largest lenders in the UK until she retired a few years ago. I remember her telling me about people taking out interest only mortgages pre-2008. When she used to ask people how they were going to repay the capital the borrowers nearly said, "I'm going to put £50 a month away in a cash ISA." My mum would then ask if they had taken financial advice and the borrowers would say, "yes."

You, or your gran, need to speak with the council to see what, if any, housing might be available for her. If there's none then she could sell and move into privately rented accommodation. Depending on her savings and income she might even get assistance in paying the rent.

Georgiah406

Again, thanks for the advice. Spoken to Halifax who have said the endowment was supposed to be a stocks and shares ISA however there never was an ISA in the first place so not sure how that's come about. Nowadays people are more financially savvy however telling an elderly woman who lives by herself that she will 'just have to save' is not a responsible way of lending in my opinion. To put this in context, I asked my nan about overpaying, even if it was only a tenner a month but she was convinced this would give them permission to ask her for more money than she could afford. She's terrified about talking to her mortgage company over the phone in case she agrees to pay more/they want to take her house away which is why I'm looking into it now for her

ViolaLass

Georgiah406 wrote: »

Nowadays people are more financially savvy however telling an elderly woman who lives by herself that she will 'just have to save' is not a responsible way of lending in my opinion.

People aren't financially incapable just because they are old or living on their own.

Mojisola

Georgiah406 wrote: »

Nowadays people are more financially savvy however telling an elderly woman who lives by herself that she will 'just have to save' is not a responsible way of lending in my opinion.

If she took out the mortgage when she was 53, she wasn't 'elderly'!

I wouldn't even call her 'elderly' now when she's 63.