How to deal with end of interest only mortgage after completing DMP

CheerioCreditCards

Morning experts,

Brief history - 90% of the way through huge DMP, should be fully paid off in just over a year. Have been in DMP since 2010 and have always paid on time.

9.5 years to go until our interest only mortgage matures, (20 year term, have never missed a payment). Hopefully plenty of equity in the house. Mortgage is with Santander.

But - how will we stand? Even though the equity in the house will pay off the existing mortgage plus extra, obviously selling up would leave us requiring another house. We could go smaller (kids have left home), but we’d need another mortgage of some sort.

Would Santander or anyone else even consider us with our past credit problems? We were aware the DMP would wreck our credit rating while it’s active, but once it’s paid off will it still affect us?

Or alternatively might Santander extend the mortgage to save us moving?

Sorry, rather long and I know it’s a long way off, but we’re ultra cautious nowadays!

obay

How old are you?

CheerioCreditCards

Currently I’m 53 and husband is 56

obay

CheerioCreditCards wrote: »

Currently I’m 53 and husband is 56

What is left on the mortgage?

CheerioCreditCards

From memory it’s a £345k mortgage and we have a secured £60k loan against it.

House should be worth at least £650k.

getmore4less

How much £pm have you been paying on the DMP and the mortgage/loan?

Even with 20y to 75yo looking at a min of £2,000pm

CheerioCreditCards

getmore4less wrote: »

How much £pm have you been paying on the DMP and the mortgage/loan?

Even with 20y to 75yo looking at a min of £2,000pm

Mortgage payment is close to £1.3k pm, unsecured loan is £287 pm and DMP is £700 pm.

bertiewhite

CheerioCreditCards wrote: »

9.5 years to go until our interest only mortgage matures.........................Even though the equity in the house will pay off the existing mortgage plus extra, obviously selling up would leave us requiring another house. We could go smaller (kids have left home), but we’d need another mortgage of some sort.

Why would you need another mortgage? It looks like you'll have an estimated £300K to buy a house with outright and you'll be almost at retirement age anyway then.

getmore4less

CheerioCreditCards wrote: »

Mortgage payment is close to £1.3k pm, unsecured loan is £287 pm and DMP is £700 pm.

What about the £60k secured loan.

£345k £1,300pm 4.52% 53% LTV
£405k £1,300pm 3.85% 62% LTV

Why are you on such a high rate?

At 60% LTV you should be on around 2%

What's the current deal with Santander?

CheerioCreditCards

bertiewhite wrote: »

Why would you need another mortgage? It looks like you'll have an estimated £300K to buy a house with outright and you'll be almost at retirement age anyway then.

Thought of that too, but due to our absymal financial situation during the crash, we have hardly any savings and my husband’s small pension wouldn’t be adequate to see us through retirement. So we’d need some of the equity money to live on.

Also, even small houses in our part of the country are pricey. We are in the SW.

CheerioCreditCards

getmore4less wrote: »

What about the £60k secured loan.

£345k £1,300pm 4.52% 53% LTV
£405k £1,300pm 3.85% 62% LTV

Why are you on such a high rate?

At 60% LTV you should be on around 2%

What's the current deal with Santander?

The £60k loan repayment is £237pm from memory and, to answer your question about the interest rate, I have no idea. We were paying a fair bit more than that before the interest rates fell. We currently pay £1,294pm.