£50,000 Interest Only Mortgage?

Taff

Thanks all.

ER seems an expensive way of paying the 47k secured loans with compounding interest. However they have been advised they could do it for a year but cant see how this is possible??

I have to admit the last post went over my head as I am not conversant in this type of thing, but many thanks for your time in posting.

I have found out the 47k secured loans are made up of 27k at 9% and £20k at 2.45% variable above BR.

Would I be able to have another mortgage completly seperate to mine on interest only, if they where to sell me the house for below market value. Obviously this needs to be carefully thought through with solicitors advice.

If I was to say purchase for 80k on Interest only they could pay the monthly amount and have circa 30k spare. With an side agreement that If they needed further equity in the future i could possibly remortgage at that time.

A lot to try get my head around.
Thanks

Keep_pedalling

Taff wrote: »

Thanks all.

ER seems an expensive way of paying the 47k secured loans with compounding interest. However they have been advised they could do it for a year but cant see how this is possible??

I have to admit the last post went over my head as I am not conversant in this type of thing, but many thanks for your time in posting.

I have found out the 47k secured loans are made up of 27k at 9% and £20k at 2.45% variable above BR.

Would I be able to have another mortgage completly seperate to mine on interest only, if they where to sell me the house for below market value. Obviously this needs to be carefully thought through with solicitors advice.

If I was to say purchase for 80k on Interest only they could pay the monthly amount and have circa 30k spare. With an side agreement that If they needed further equity in the future i could possibly remortgage at that time.

A lot to try get my head around.
Thanks

But it is not expensive for them! It gives them security and frees up a considerable amount of their income so they can enjoy a much better lifestyle in their latter years.

Yes this impacts on your inheritance, but that should not overrule the security and wellbeing of your parents.

getmore4less

Taff wrote: »

T
I have found out the 47k secured loans are made up of 27k at 9% and £20k at 2.45% variable above BR.

With that info the time to pay them off is

£27k @ 9.00% £400pm 95 months, 7y11m
£20k @ 2.69% £250pm 89 months, 7y 5m

the question that needs asking is why the secured loan at 9% was there a problem getting money from their own lender.

Is that £20k a mortgage which lender any retention deals


what rate is being offered for the equity release?

Taff

Getmore4less - the 20k is a secured loan and not the mortgage. Apparently the mortgage was cleared a few years ago. I dont think there are any get out penalties or retentions but will check.

There probably was a issue with borrowing from their own lender, hence why they ended up with additional borrowing at 9%.

Thanks

getmore4less

if they were mortgage free where did the £47k(and more if paying a while) go?

they already have 47k equity release, all they are doing is restructuring so the potential new rate is important.


where is sis in all this can she help out in any way?

robatwork

You should encourage them to look at downsizing again.

70 and 61 really isn't old.

I know people in their mid 80s who have moved house into something more manageable.

ViolaLass

Have they been spending beyond their means?

If so, if you sort the mortgage, won't they rack up more debt?

Then what?

tlc678910

A question for the mortgage specialists please - are there forms of equity release mortgage where you can pay the interest each month so that it does not compound the debt?

If so this would have the same effect as a general interest only mortgage being taken out (ie original amount outstanding but no more) with the benefit of no end date looming when the original debt must be repaid by.
Tlc

mummytofour

Yes there are but I believe the rates I have seen are 5-6 % as I looked for my dad.

I'm not meaning to be rude but why have them got in such a muddle from being mortgage free? Perhaps it's not so much about sorting this situation out but about supporting them to manage money x