Interest Only Mortgage - Negative equity.

TDon_2

Looking for some advice on my situation from anyone who may have been in the same boat.
Basically I was miss sold a mortgage back in 2006/2007. The broker, I have since found out, was a con man, who has since had his mortgage broker license revoked and filed for bankruptcy.

At the time I was young and naive (no excuse I know) and believed him when he said everything was above board. He sold me an interest only mortgage that was supposed to switch to full repayment after 5 years. To cover the 5 years, he sold me an endowment policy. Turns out the mortgage was interest only for 25 years and the endowment policy was in fact a decreasing life insurance policy.

I didn't know any of this until very recently and as it turns out, my 120k mortgage I've been paying for 10 years is still at 120k and I have no payment plan to pay off the capital at the end.

I was thinking of remortgaging but am 45k in negative equity, so no go there.

What options are there?

I was thinking of asking my mortgage company to extend the term of my loan and switch me to full repayment, would that be something they are likely to do, has anyone on here done it?

I've a decent credit rating, no other debt, never missed a payment, for anything and have another 30 years left of working years.

Any help/advice great appreciated.
TD

[Deleted User]

Remortgaging is certainly an option. Alternatively, you could overpay or set up some other sort of repayment vehicle.

TDon_2

Is it not extremely difficult to remortgage when you have so much negative equity?

[Deleted User]

Sorry- I missed that. But swapping products with your existing lender may not undergo further checks, so worth looking at.

Otherwise, overpay as much as you can.

TDon_2

Birmingham midshire don't offer personal mortgages anymore, only BTLs. I just have to hope they agree to put me on a full repayment plan and extend my term.

saverbuyer

What's your rate?

glentoran99

TDon wrote: »

Is it not extremely difficult to remortgage when you have so much negative equity?

Who is the lender? I know ulster bank were very good dealing with negative equity

TDon_2

glentoran99 wrote: »

Who is the lender? I know ulster bank were very good dealing with negative equity

Birmingham Midshire.

TDon_2

saverbuyer wrote: »

What's your rate?

It's around 2.2

saverbuyer

TDon wrote: »

It's around 2.2

That's a good rate. You'll not get anywhere near that on a repayment remortgage. A 95% LTV mortgage will be closer to 5% for example.

Calculate the difference between a capital repayment and your current 2.2% interest only and overpay the difference each month.

Around 550 a month overpayment to clear the balance in 15 years on top of the 230 you pay interest only now.

Start now. Don't ignore the problem.