shortfall at end of interest only mortgage

jimmy55

Hi, I am 62yo and my interest only mortgage of 43K came to an end in July last year. Due to financial problems 10 years ago I no longer had the endowment policies in place which I had intended to pay off the mortgage. I had assumed that there would be no problem carrying on interest only until I retired at 66 and was able to downsize. How wrong I was! Although my credit rating is now excellent, my age and lack of interest only mortgages means I am struggling to find a mortgage / loan to repay the lender. I am self employed with a fairly low income as my wife and I have 4 independently living parents between 80 and 95 plus 2 kids at home. The house is conservatively worth £350K so there is plenty of equity.
I have made some payments reducing the sum to about £38K and have about £11K which I can use to part pay off the outstanding sum plus the possibility of a pension pot of about £20K but I am loath to cash in my pension pot if I can avoid.
A lifetime mortgage would have been ideal but a further complication is that my wife is only 49 and renders us ineligible. One more complication is that there are 2 charges against the property from historic credit card debts of £17K
I would welcome any suggestions, I just need something to bridge the 6 years to retirement when I could downsize, release equity, or have potentially benefitted from inheritance.! Cheers, Jim

silvercar

Have you discussed this with your lender?

jimmy55

Yes, they are pretty unhelpful moving forward ( despite being a mortgage customer for 35 years ). I dont come anywhere near their 'stress tests' for a new mortgage and they dont offer any more interest only products and although they are delaying any actions, the pressure is growing. I have drawn a blank with L & C and Stepchange.

Thrugelmir

jimmy55 wrote: »

Yes, they are pretty unhelpful moving forward ( despite being a mortgage customer for 35 years ).

While lenders have a duty of care. They cannot find a solution where none exists. Downsizing seems the most appropriate course of action. Clearing your debts in the process.

Muscle750

Why cant you downsize now? Your not the only one whose gonna get caught by this ticking time bomb

jimmy55

I could downsize now, but with the age of my family its not the right time. As I said in the OP I am really looking for other possible interest only options for 5 years. I fully appreciate they are not obliged to help me as lending criteria is a whole different world to 25 years ago.

Amst

Ask your kids to contribute to the outstanding balance in return for equity in the future downsize.

Lysimache

By age of family, what do you mean? Are your children not of working age?

jimmy55

One is 15 and the other 18yo apprentice so probably not much potential there!

Lysimache

Ah, I see what you mean by a few years it's easier to downsize.

silvercar

jimmy55 wrote: »

Yes, they are pretty unhelpful moving forward ( despite being a mortgage customer for 35 years ). I dont come anywhere near their 'stress tests' for a new mortgage and they dont offer any more interest only products and although they are delaying any actions, the pressure is growing. I have drawn a blank with L & C and Stepchange.

I would keep making your case that you only need a few more years on interest only and then you will definitely be selling up.

Lenders really don't like repossessing, if you dig your heels in, they also have limited options. You don't want a new product, you want to continue paying interest only. You want a change in end date not a change in product. I realise they don't really do this, but their options are as limited as yours.