Interest repayment mortgage question

G8311374

Hello.

I recently met with my case worker to discuss my housing needs as I have long term health problems.

There are a few bungalows being built locally which are specifically for wheelchair users on a shared ownership basis.

I currently rely on HB to pay my rent as I am not well enough to work right now. I don't have much spare income. I receive ESA, DLA and my war pension as income.

My case worker has told me that I could apply for the shared ownership property and take out an interest only repayment mortgage. She then said that the government have a scheme that would pay the mortgage as its interest only so I would not have to worry about paying it myself until I am able to get back to work.

Is this true? It sounds a little too good.

Thanks

AnotherJoe

If you have a pension, so you ain't no spring chicken, and you have long term health issues,how realistic is it to think you can at some later point when better get a job and another mortage to enable you to start paying off the mortgage ? How old would you be ?

You'd also need a lender willing to consider all these factors and give you a mortage. IO mortgages are very rare these days except for buy to let properties.

The only upsides of doing this would be, you might make some money on house price appreciation when you have to sell when the IO period finishes and you'd live in a purpose built place for a few years

I think this is highly unrealistic and and is not going to happen but why not ask your case worker for how and who to apply to. If it does happen at least you'll be in a nicer place for some time. I don't think it will though, sorry, I'm guessing they'll get all vague at this point.

p.s. , I just noticed you wrote that the case worker said you could get an "interest only repayment mortgage". Is this your mistyping, your case workers misunderstanding, or yours? Because that's a contradiction in terms.

G8311374

Hello. I am 35 years old. I receive a war pension for injuries sustained in Iraq that ended my career in the military.
Sorry I'm not quite au-fait with the correct terminology but I'm talking about a mortgage where you just pay the interest on it and not capital or capital + interest.

Thanks

AnotherJoe

That is an interest only (IO its often abbreviated to here) mortgage.
The other type is a repayment.

There's nothing to stop you (except finances) getting a repayment mortgage because the government will pay the interest part of a repayment mortgage.

The main advantage of an IO mortgage would be the repayments are lower. For sake of argument, and very simplistically, a repayment mortgage might be £500 a month (made up of £300 interest and £200 repayment), the same sized IO would just be £300 a month. nd in both cases housing benefit or whatever would pay the £300. But not the £200.

The disadvantage is, when it ends you still owe what you borrowed because all you paid is the interest. So you need to get a repayment mortgage or sell up. But like I say few lenders do these IO now.

Speak to your case worker, maybe if they are in this specialized field they know of specific lenders that will take your types of income into account. I hope they do, I'm just being pessimistic / realistic. Or failing that are there veterans associations that can help in this area pf mortgages or in getting you better accommodation?

Please do let us know the outcome..

getmore4less

You need more details off your case worker.

Specific info in the government mortgage interest payment scheme they refer to.
How to get an interest in only mortgage, which lenders are supporting such a scheme.

Are any of these properties going to be available for rent as only offering purchase option will quite likely exclude access to a proportion of wheelchair users.

G8311374

Unfortunately these sorts of homes are like gold dust. I am renting a bungalow in a veterans estate On the rental market housing associations or councils usually put you in a flat or house and then rely on social services and the landlord to work together to put in basic alterations at the landlords expense.