Helping my mother move away from an interest only mortgage

getmore4less

Ally09 wrote: »

Apologies, i know some of the figures are muddled... I don't have it all to hand yet as i'm waiting to get all this handed over (soon, i hope). And i'm having to get to grips with all of this/understand it from scratch.

What i do know

lender/s: the mortgage works (previously kensington mortgages and then derbyshire home loans)
Agreement: was taken out in Jan 2007 and ends in April 2032
borrowed: it looks like she borrowed £81,545
current balance (from last statement): £85995.90
property value: £90k-£100k (based on the sale of my neighbours property last year)
monthly payments: £310.28 (not £370)
On the annual statement it says: rate of interest % 4.300

Thanks, starting to make sense now,

25y original term,
£86k @ 4.3% is £308pm (repayment over 14y would be £680pm)

Will be worth finding out why the amount has gone up.

The first step will be see what you can get from TMW that will depend on which category the current mortgage fits into with them and if they allow a swith on Interest only.

That might be best done with a broker that knows how they work

The LTV is not that good so some cash injection may help there.
If it qualifies there are 2y rates 2.09% 85% LTV and 2.69% 90% LTV.


http://www.tmwdirect.co.uk/existing-customers/our-mortgage-range

2.69% would be I/O £193, repayment £615.

-taff

I can understand why you'd want her to move to a repayment mortgage, but you say you and your borther are going to move out and get your own places and mortgages.

If her income is so low with you two living there very cheaply, there's not much chance she can afford a repayment mortgage on her own. If you say your brother is willing to help her now, then he can start overpaying while you all work out a plan for the future?

She could just keep paying the interest only mortgage for now, and when she's 64, go to live with one of you two?

JessicaMM

What's the going rate for a room in her area? It sounds like her best hope is to get in lodgers who pay more than you and your brother, and use that money to put towards the mortgage. She might make more from AirBnB or housing foreign students?