Balloon Payment

Romans53

Where to begin...

My mother thought her mortgage finished in 2018, but it actually finishes at the end of April 2016!

She isn't in a position, nor am I, to cover the shortfall. It turns out she's been only paying the interest.

The bank have said they could extend it, though I'm not sure for how long, but she needs to prove her income. This is something she can't do as she works casually doing therapy. Also, at her current age, 63, she's going to struggle to get any further finance.

She's asked me about it being in my name, but in my opinion the house isn't worth a great deal, not enough to invest and have to commit to for next 20+ years.

There's no emotional attachment to the house from myself or my sister.

Advice on what's the best course of action.

ACG

What about an emotional attachment to your mum? You would be helping your mum out, its not a financial investment.

What was her plan for when 2018 comes?

dunstonh

So, looking at this situation, nothing has actually changed other than the event that was going to happen in 2018 is actually happening in 2016.

So, what were her plans for 2018? Can they be carried out now?

How far are you willing to go to support your mother financially?

Thrugelmir

Romans53 wrote: »

The bank have said they could extend it, though I'm not sure for how long, but she needs to prove her income. This is something she can't do as she works casually doing therapy.

Then you need to work on a plan B. Lenders will balance a social responsibility with commercial interests.

Romans53

Yes, I do have an emotional attachment to my mother, but that doesn't make finding money any easier.

I'm 44 myself, and whether I earn enough or not I'm in a relationship, including 1 dependent, and in all fairness should be making more of a financial investment there.

I've never had a mortgage so only through talking to my gf do I understand how they work and that my mum would have been getting yearly statements etc.

Even if she had until 2018, there's no way in hell she's going to earn enough to pay it off.

I myself first joined this forum as I was bankrupt, have worked through that and come out the other side... I don't want to burden myself for next 20 years paying for a house which I don't think is worth a great deal.

It's hard thinking that way, but also not fair to be put on to try and save this situation.

Having read threads on other websites, there's people who are financially better off than her and still have lost their house. And some of them have years to go, not 3 weeks until her mortgage needs paying.

Fingers crossed the lotto numbers come up.

I've got a couple of friends who own properties, but they say it's not worth them investing because they wouldn't see any kind of return from someone who couldn't pay the asking rental fees for the area we live in.

To be honest I came on here today to help me realise the most probable outcome... there's no easy fix or miracle is there?

Thanks for listening guys

AnotherJoe

Did / does your mum have an endowment or similar in place to pay the mortgage off in 2018 ?
If yes, then this may be fixable. If no, then it's most likely rental properties for her from now on.

waveneygnome

How much is the house worth now?
How much is the outstanding balance on the mortgage?

Pixie5740

If your mum works casually doing therapy she should be filing tax returns and therefore have proof of income unless by "casually" you mean it's cash in hand and not reported to HMRC.

If your mum has no plan to repay the capital then she could sell and downsize using the equity or sell and rent. Even if her mortgage lender can extend the term of her mortgage if she doesn't have a plan to repay the capital a longer term isn't really going to help.

dimbo61

Time for Mum to sell up and see what she can afford.
As she is over 55 she can look at over 55,s apartments in her area.
She would only have rent to pay and if she has a Low income she would get help from Income support

Mojisola

Romans53 wrote: »

My mother thought her mortgage finished in 2018, but it actually finishes at the end of April 2016!

She isn't in a position, nor am I, to cover the shortfall. It turns out she's been only paying the interest.

Advice on what's the best course of action.

dimbo61 wrote: »

Time for Mum to sell up and see what she can afford.

As she is over 55 she can look at over 55,s apartments in her area.
She would only have rent to pay and if she has a Low income she would get help from Income support

Best course of action - as dimbo says, sell up and move into rented.

Your Mum has ignored a problem that she knew was coming - she can't expect someone else to come in and rescue her.

Romans53

Hey guys
Thanks for the comments

OK
Outstanding is £39,000
As for value, I'm unsure. A similar experience property on the same row sold for 90,000 last year but in my opinion it's a better example.

I don't think she has any endowment


My thoughts are the same, she's going to have to sell up ( I assume the bank will let her sell?) And look for a small affordable rental property.

I'm in no financial situation to save the house or truth be told not wanting to saddle myself with at least 40,000 worth of debt for a house i don't want. I think because we talked about it the other day that she has it in her head that it's going to be all ok.

I thought it was your kids that are meant to test you