Helping my mother move away from an interest only mortgage

Ally09

I’m hoping for a bit of advice/push in the right direction as I’d really like to help my 50 year old mother move away from her interest only mortgage.

Issue: she has an interest only mortgage which is getting her no where fast, she still has £86k to pay (20yrs remaining) and her mortgage provider doesn’t seem very reputable, in fact they’ve been sold 2/3 times since she got the mortgage (10yrs ago).

What we need: we need to move her onto a repayments mortgage as she’s never going to be able to clear her mortgage at this rate.

More info: she’s now on esa and pip benefits (£500pcm). My sibling and I pay board which equates to around £500pcm and this brings her incoming total to £1000pcm.

Current repayment: £370pcm
Bills/food: £400-£450pcm

We’ve not been overpaying on the current mortgage and it looks as though she could over pay by £100pcm.

She’d have no issue with repayments if she moved to a repayment mortgage as my brother will always support her but, the bank won’t care about this. Also, neither my brother or I want to have a joint mortgage with her as we’d like our own properties soon and we’d want to take advantage of the benefits first time buyers are offered.

The ideal case scenario: for my Mum to get a mortgage on her own but, is this possible based on her income/situation?

We’re waiting to hear back from a few banks as we’ve completed a few mortgage promise applications online however, we’re not hoping our breaths with this.

I’ve also been advised to reach out to brokers for some advice to see if they can help us.

Advice from the mse community would be greatly appreciated.

Thanks

marliepanda

Taking your own figures your mother has £500 income from benefits a month, plus lodge from you and your sibling.

You and your sibling intend to move out.

How on earth will your mother pay the bills when you two move out, considering her current mortgage is almost 4/5 of her current income?

The bank will not take your promise to pay her mortgage for her

Tom99

[FONT=Verdana, sans-serif]What is the interest rate your mother is currently paying?

[/FONT] [FONT=Verdana, sans-serif]Can she overpay as and when? If so it might be a better bet then changing to a repayment plan she may not be able to keep up.

[/FONT] [FONT=Verdana, sans-serif]Does your £250 pm include all bills and food? If so maybe you could pay a bit more whilst you are still with her.[/FONT]

-taff

There is another thread regarding this on the Mortgages board.

They were advised to post here for help saving money.

OP. I would post up an SOA. Link here
http://www.stoozing.com/calculator/soa.php

Have you found out when this mortgage ends yet?

sleepless_saver

Has she claimed Support for Mortgage Interest? https://www.gov.uk/support-for-mortgage-interest. This might help her manage financially when you move out though would not solve the basic problems of paying back mortgage and whether house is suitable for her in longer term. (Also from April SMI is in the form of a loan which would need to be repaid normally on sale of property.)

Ally09

I believe it’s 20yrs or so. I’m waiting to get a hold of all her documents this will allow me to get all the facts/dig a little deeper

[Deleted User]

£500 a month for PIP and ESA seem low?
How much is the property worth?
She won't get a remortgage on her level of benefits for 86k.

Ally09

Thank you all for your advice/help I’ve got a few options to explore

C.M.

Is it really essential that she gets a mortgage and owns the house outright? As it stands your mother is on benefits and unlikely to be able to secure or afford a mortgage on her own.

She can effectively 'rent' the house securly for the next 20 or so years, and then move into rented accommodation, maybe a little flat or bungalow

The only 'benefit' I can see of lumbering your poor mum with an unaffordable mortgage while she is on benefits is that you and your siblings wI'll stand to inherit the property or any equity upon your mum's death. However, if she struggles with repayments and your brother isn't in a position to help, say if he loses his job, then your mum's home is at risk.

meer53

Why do you want her to clear the mortgage ? She would never be able to afford the mortgage if it's moved from interest only, plus no lender would offer her one on her income anyway. She will be better off sticking with it and saving as much as she can in the meantime.