Changing to interest only

ads76

Hi everyone

My ex partner and I broke up several years ago but we own a house together which is currently for sale. She moved out shortly after we broke up and has never contributed to the mortgage. I lived there until a few months ago when I moved out on the expectation of a sale which subsequently didn't happen and my ex becoming abusive. As I've always paid the mortgage and I'm now paying for somewhere else to live (thank you Tory government for increasing the stamp duty for buying a second home while I wait for the existing one to sell...), a friend suggested that I ask my mortgage provider if we can go interest only while we wait for the house to sell.

The mortgage lender said that since I'm living in 'reduced circumstances', we can go interest only but that it will "leave a mark on our credit file". My ex is unable or unwilling to contribute to the mortgage and other baseline bills (council tax, buildings insurance etc) but refuses to accept anything other than 50% of the proceeds of the sale. I plan on buying another house and have a good credit history. Would I be shooting myself in the foot by going interest only? I've searched on Google several times and also on here but can't find anything which indicates whether this would negatively impact my credit rating. Realistically I can afford to pay it all, but it halves what I can save for my own house purchase and we could wait months or years for the sale (it's a niche property and similar ones have taken 2-3 years to sell).

Any advice (particularly links) would be appreciated.

ads76

Does anybody know what imprint changing a repayment mortgage to interest only leaves on your credit file and what impact that might have on future mortgage applications?

Bigrachel

I would strongly suggest going to a mortgage broker! They are highly underrated. They are so highly regulated by the financial conduct authority so you can be assured you'll be in safe hands. Have a read about the benefits of using a mortgage broker http://mybigmove.co.uk/Benefits-of-using-a-mortgage-broker and compare them. They should be able to help you out.

Good luck!

TrickyDicky101

ads76 wrote: »

Does anybody know what imprint changing a repayment mortgage to interest only leaves on your credit file and what impact that might have on future mortgage applications?

It sounds like the lender is saying should you switch to this 'interest only' amount you will effectively be going into arrears (as you will not be paying the contractually agreed amount). If so, then this will be reported on your credit file and would almost certainly impact future mortgage applications.

Thrugelmir

The imprint will warn anybody that accesses your credit file data that you are under financial duress at the current time. As soon as the property is sold. The marker will be removed and your credit history over time will recover.

amnblog

Yes, the lender is saying that allowing you to make no capital repayments for a period will impact your credit file as they will list the account as 'arrangement to pay' or similar

Malmo

OP, be clear that an Arrangement to Pay marker on your credit history has a generally negative impact and stays on file for 6 years, like any other marker such as a missed or late payment.

Thrugelmir

Malmo wrote: »

OP, be clear that an Arrangement to Pay marker on your credit history has a generally negative impact and stays on file for 6 years, like any other marker such as a missed or late payment.

There is a genuine explanation in this instance. Common sense would prevail.

ads76

Thanks everyone. I'm sorry I didn't respond earlier, I didn't receive any notification that I'd had responses, I just happened to come and check. It sounds like I'd be better off making the full regular payment since technically I can, I was just trying to avoid wasting money I won't get back due to my ex refusing to contribute. A mortgage broker sounds like a good idea if I can find one to advise quickly enough.