Interest only mortgage at end of term

Ar00082

Hi ,

Am on an interest only mortgage . No option to pay off the capital . Has come to end of its term . Have seen a independent financial adviser who advised the only option I qualified for was a lifetime equity release mortgage with Legal and General .

Are there any other options I could consider as the interest is compounded ?

Are there any ways to best manage this type of morgage ?

Are there any options outside the box eg family contributions to pay off capital and interest to reduce the amount of equity released and protect inheritance ?

Any advise or experience of this appreciated

Thanks

Lilla_D

Hi, I don't deal with lifetime equity release, so can only mention alternatives:

- sell the property and move elsewhere;
- remortgage on repayment basis;
- as you mention it, use family contributions to pay off some of the mortgage and remortgage the reduced amount;
- do transfer of equity, i.e. get your children on the mortgage with you even if they are not moving in, to help the remortgage process if your age and/or income are a problem. Please beware of the legal and tax implications, so you may want to seek specialist legal and tax advice on this point;
- sell the property to your children in full (inter-family sale is possible at a reduced price and some lenders will even let you stay in the property)

csgohan4

Downsize is one option


generally money and family should never mix. Your son is on the mortgage lets say, then 10 years later gets married wants to sell his share but you can't buy him out and he can't afford a second House with extra Stamp duty fees. Forces a sale, family bitter and comes apart.


Not an uncommon scenario. Think very carefully about using family. Don't expect any money back if your giving money to family

GarthThomas

Whatever "clever" scheme you come up with you need to borrow as much money as is outstanding, and pay interest on it all (unless you have savings or sell).

One obvious solution is just to get a standard repayment mortgage. Why is that not an option?

If the reason is that you can't afford it, then you either have to accept giving the house up now, or rolling up,the interest on equity release and no longer owning all of it.

robatwork

Can I just ask what your plan was when you took out this mortgage. So 25 years ago (or whatever), how did you envisage paying off the capital?

Did you have a separate endowment that didn't raise enough?

Thrugelmir

If you wish to protect your inheritance. Downsize. Buy for cash with the released equity.

zagubov

robatwork wrote: »

Can I just ask what your plan was when you took out this mortgage. So 25 years ago (or whatever), how did you envisage paying off the capital?

Did you have a separate endowment that didn't raise enough?

My flatmate round about that time was convinced to take out an endowment mortgage.

I would say it's one of those madnesses like open-plan or laminated flooring in flats but it's simpler that that; just bullying brow-beating and excessive sales pitches from salesmen on commission on a from of deal which if it's not a scam will do as an example until the real thing comes along.