Aunt couldn't pay off her mortgage

centennial

This query is on behalf of my aunt, who is 61 years old (recently made redundant after one major accident), living on job seeker and disability living allowance at the moment. She has one house which is valued around 410000 GBP. Due to this unforeseen accident, she still has 75000 outstanding on her Mortgage. Mortgage term is expiring on June,2019.

- Any idea what will happen after June,2019, will bank sell her house or can she continue paying mortgage beyond this date ? She is comfortable paying mortgage which is around 300GBP per month.
- She has no other income apart from govt allowance and renting the spare room.

What is best option in front of her ?

I am financially comfortable and want to help. Is there any way I can safeguard my 75000 (if I pay her mortgage off), without getting share in house ownership.

Any thoughts please..

anselld

She could downsize to become mortgage free.

You could lend her the 75,000 with a proper legal agreement, but how and when would you expect repayment?

amnblog

She can most likely use a lifetime mortgage to cover the debt for the remainder of her life.

missbiggles1

In the short term she may be able to switch to interest only and claim SMI.

https://www.gov.uk/support-for-mortgage-interest/overview

This should give her a breathing space so that she can downsize before the mortgage is due to be repaid.

ETA
How can her mortgage payments be only £300pcm if there's £75k owing and it's expected to be cleared off by 2019? Or is she already on IO?

andrewmp

missbiggles1 wrote: »

In the short term she may be able to switch to interest only and claim SMI.

https://www.gov.uk/support-for-mortgage-interest/overview

This should give her a breathing space so that she can downsize before the mortgage is due to be repaid.

ETA
How can her mortgage payments be only £300pcm if there's £75k owing and it's expected to be cleared off by 2019? Or is she already on IO?

I think the OP means the mortgage deal is expiring in 2019, if so she could continue to repay at SVR from 2019 until it's paid off presuming they won't give her a new deal.

missbiggles1

andrewmp wrote: »

I think the OP means the mortgage deal is expiring in 2019, if so she could continue to repay at SVR from 2019 until it's paid off presuming they won't give her a new deal.

You may well be right but s/he did say "mortgage term" rather than "mortgage deal".:)

David_White

Downsizing sounds like a sensible idea.

andrewmp

missbiggles1 wrote: »

You may well be right but s/he did say "mortgage term" rather than "mortgage deal".:)

Yeah, I'm guessing he got the terminology wrong, saying that it could be an interest only mortgage coming to the end of the term, in which case she might be pretty screwed.

centennial

Thanks all, very helpful.

Yeah, you got it right, I meant Mortgage term not mortgage deal. She is with same mortgage provider for more then 20 years and around 5 years back she changed from repayment mortgage to Interest only.

Mortgage term is expiring in June,2019 so she is wondering what will happen after that.

If she can continue to pay her mortgage beyond June,2019 then every year I can knocked her mortgage by couple of grands.


If the mortgage provider decide to sell the house, then I would need to jump in and pay off her mortgage (Last option).

thanks again for your help

AnotherJoe

centennial wrote: »

Thanks all, very helpful.

Yeah, you got it right, I meant Mortgage term not mortgage deal. She is with same mortgage provider for more then 20 years and around 5 years back she changed from repayment mortgage to Interest only.

Mortgage term is expiring in June,2019 so she is wondering what will happen after that.

If she can continue to pay her mortgage beyond June,2019 then every year I can knocked her mortgage by couple of grands.


If the mortgage provider decide to sell the house, then I would need to jump in and pay off her mortgage (Last option).

thanks again for your help

When the deal ends they will want it paying off. She may be able to drag it out for a while but it sounds as if she has no prospect of paying off the loan. Can she downsize? I would say that is likely the best option especially if done on her timescale rather than a sale forced by the lender at a time not of her choosing.

Thrugelmir

centennial wrote: »

Mortgage term is expiring in June,2019 so she is wondering what will happen after that.

Ball is firmly in her court. Lender will expect repayment of the debt. Better to be proactive.