25 year mortgage about to end help needed

sidleyllan

OK long explanation.

Our mortgage of 25 years comes to an end towards the end of this year, when we will have to repay approx £100,00.

2 years ago our life endowment policy was ended by Phoenix Insurance (not originally with them but numerous acquisitions they ended up with it).

The reason for ending it - they had had to use money from the pot to service the policy. We complained - they agreed that it had been mis-sold and they refund the difference between a standard life policy (life only) and the money we actually paid into the policy over 23 years with simple interest added. This came to just under £15,000, instead of the £80,000 we were expecting to receive at maturity.

Not happy with that we complained to the FOS, who said we had a case. Their decision was an extra £435 on top of the original offer. They agreed that the policy had been mis-sold & mishandled, but that this was all we were entitled to. We said we were not happy with that as we were going to use that money to pay off the bulk of the mortgage. The ombudsman said he would refer it higher up the chain but the result was the same. He said we could go to court ourselves but the judge would take into account the FOS decision and the likelihood we would not win any substantial increase plus court/ legal costs - we would end up worse off.

After taking free legal advice, we felt gambling and losing more money was too risky so, we decided not to pursue court action.

So, now we have only £15,000 to pay towards the mortgage. However, both my wife and I will soon inherit a substantial amount from our 3 remaining parents (all in their 90's and clinging onto life with their fingertips). I realise that this is described as a "potential asset" in the financial world and not an actual realised asset.

When my father died 11 years ago I inherited 1/2 his share of the house, with my sister the other half, which by todays assessment of the value of the parental house (minimum of £600,00 super quick sale) is approx £150,000 possibly up to £200,00 for my share. This was frozen whilst my mother is alive or wants to continue living there. He did this because my father was worried that my mother would live a long life (she has) and would need to go into a nursing home (she hasn't) and all of the money, if he left it to her, would go in nursing costs leaving my sister and me nothing.

My mother has lived in the house for 65 years and wants to die there. (it's a 4 recep. 8 bedroom house with 1 old lady rattling around there). She has had heart failure for 5 years (along with 3 different types of cancer - tough old boot my mum). Her heart failure was diagnosed in Oct. last year as end stage with 6 - 12 months left to live if she's lucky (she doesn't think she's lucky BTW as she has wanted to die for some time now).

Anyway, my question is how should I approach the bank (HSBC) about the fact I cannot settle the mortgage straight away and I have an asset that is frozen at the moment?


Thanks in anticipation

Sidley

silvercar

There have been threads about what happens when people intend clearing a mortgage from an endowment payout that is only going to mature some months after the mortgage end date. Banks are generally thought to be accommodating in this situation.

Yours is similar, though obviously the exact date is less well defined. Essentially you are waiting for 2 events to occur - the passing of your mother and the subsequent sale of the house.

I would suggest being honest with the lender. Honest but firm. If the lender wanted to, they could take you to court to repossess. They wouldn't want to do that because it doesn't look good for them, is hassle and has costs attached. But if they did take you to court, it would take them a few months to get to an eviction stage, so that gives you a bit more time.

One small point, you don't want your mother to sell up as that would incur a capital gains tax liability for you and your sister on the share you have owned since your father passed away.

sidleyllan

Thanks silvercar,

One thing I forgot to mention, the endowment policy was from our mortgage with Halifax. When our local Halifax closed, we eventually transfered all accounts and mortgage to HSBC. Financial advisor there said don't trust endowment policies, so we went for a repayment mortgage. When my 3 children went to Uni. we had to pay towards their course, so we went to the bank manager who said he could put us on interest only for a short period (that was approx 15 years ago).

Never heard a peep from the bank about having the review, they just let it go at that.

Secondly, my mother has lived in that house 65 years, she nursed her dying mother and then her dying father in that house. My father also died in the house 11 years ago so she's not going to leave.

My sister and I have been trying, since his death, to get her to move to a bungalow (she lives in Bournemouth) where a decent bungalow will set her back as much as her house is worth now. But she is a determined woman.

arielsmelody

You haven't said how old you are? Do you have equity in the house? I'm wondering if you might be able to remortgage over, say 10 years, with idea of paying it off early when you eventually inherit. Or would moving and downsizing be an option?

sidleyllan

Hi Arielsmelody,

I am 58 my wife is 60 years old. Moving and downsizing is an option for later, we still need to live in this house at present. We simply haven't got the time to even think about moving. See below.

Next door neighbours house was bought for £320,000 - 7 years ago, so we have a mortgage just a shade above £100,000 therefore equity will be approx. over 2/3 of the value of the house.

My wife's father is 97 (house bound) and barely hanging on to life as it is. Her mother (90) suffered several major strokes 2 years ago, which has left her bed bound(paralysed), non communicative in hospital (she's too ill to go into nursing home - her needs cannot be met anywhere but hospital). Drs. there told all of us at the time she would be dead within weeks, maybe months, but 2 years later she's still there ( Apart from my father; our parents just don't want to leave this mortal coil). They have wanted to stop treating her (for repeated infections) but my father-in-law refused to consider it, hoping that she would somehow miraculously get better! As you can imagine we are flying around all over the place sorting things out for them and my mother (our lives are on hold) plus- on the nice side - we have to help to look after our 3 adorable grandchildren.

Recently, in the last month or so, he has agreed that if she gets another infection that they will not treat her with IV antibiotics again. We have been informed today that she has another infection.

So, I'm really looking for a simple solution to this problem at the moment. Something along the lines of giving us an extension on our mortgage until our lives have calmed down. We really don't want to go through the process of re-mortgaging etc as we barely have time to breath as it is.

I was wondering if we laid all this before the bank, they might show us mercy?



Thanks again

usefulmale

Sorry but how you refer to your elderly parents is both mercenary and deeply unpleasant.

Thrugelmir

Speak to the lender ASAP. Be armed with figures of your current financial circumstances. Then they can make an informed decision. Unlikely they'll work on what may happen in the future.

Did you use the £15k of proceeds to reduce your mortage balance?

Have you been overpaying the mortgage for the past 2 years?

ValiantSon

sidleyllan wrote: »

Thanks silvercar,

One thing I forgot to mention, the endowment policy was from our mortgage with Halifax. When our local Halifax closed, we eventually transfered all accounts and mortgage to HSBC. Financial advisor there said don't trust endowment policies, so we went for a repayment mortgage. When my 3 children went to Uni. we had to pay towards their course, so we went to the bank manager who said he could put us on interest only for a short period (that was approx 15 years ago).

Never heard a peep from the bank about having the review, they just let it go at that.

I assume you are accepting responsibility for not reviewing your own finances and remortgaging with a repayment mortgage. This wasn't the bank's responsibility.

My honest answer is that you probably need to remortgage for a short term to cover the debt. If you should end up with an inheritance during the term of the new mortgage then you can repay the full debt early.

sidleyllan

thanks thrugelmir,

Did you use the £15k of proceeds to reduce your mortage balance?

We went to our nearest branch of HSBC (15 miles away) for an appointment with a Financial advisor, for some reason she said it would be better to split the amount and put it in an separate ISAs for my wife and myself rather than draw down the mortgage? I made sure that we could transfer the monies out of the ISAs when we needed to though.
I do not really understand the logic in it?

Thanks valiantson,

I assume you are accepting responsibility for not reviewing your own finances and remortgaging with a repayment mortgage. This wasn't the bank's responsibility.

No, I quite understand that, but having read some other threads on issues of moving from repayment mortgage to interest only, some people have suggested that the bank has, a sort of, duty of care - if that's the right way of putting it. They have suggested to other peeps that this may give you leverage re. sympathetic response not a financial one ie. claiming mis-selling or poor management.

We had an arrangement with our original Life insurance company (see my previous post) to annually review our monthly payments so that we were always paying in enough so that at maturity we would get the lump sum of £80,000. When it came to Phoenix taking over they only increased instalments in line with inflation. Hence our complaint to the FOS, but there is always the small print and our complaint got nowhere.

So we thought that the need to go back to repayment mortgage was optional as we would be able to pay it off at maturity even if we had to remortgage for the remaining £20,000.

@ usefulmale

Sorry but how you refer to your elderly parents is both mercenary and deeply unpleasant.

Where do I start with this one?
Have you have been in the position of looking after miserable, cantankerous, belligerent and violent elderly parents. You get sympathy fatigue. Both my wife and myself have been reduced to tears, because it is only in the last 3 to 4 years they have become like this. I suppose great age like this changes people dramatically.
Throwing things at you; shouting at you when your only trying to help. We have arranged cleaners, carers and gardeners etc only for them to last a few days because they can't stand working for them!

My mother has £120,000 in the bank and won't put the heating on. Pipes burst and I have to go down in the middle of the night to fix it because she won't pay for a plumber. My father-in-law, who has £60,000 in the bank, has since his wife of 70 years ( I know it is a very long time to be with someone and he must miss her terribly) is now in hospital in a coma- he drinks half a bottle of whiskey every night, becomes violent and urinates all over the place. We have to clean the mess up. Local people have offered to take him to the hospital, every day. He could easily afford a taxi, but no he only wants us to take him there and that is a 700 mile round trip for us.

We wish they would spend the money on themselves to make their last moments on this earth pleasant. I was going to say happy but nothing, sadly, can make them happy any longer.

So when you are running yourself ragged travelling to different parts of the country every day, whilst still trying to hold down full time jobs (losing a lot of money - unpaid leave) Dealing with parents who don't want you there but need you there, maybe then you might understand.

And yes, I'm sorry, sometimes at our lowest ebb (when we've travelled 1,200 miles in 1 day and what we have tried to do for them isn't right or by the time we get home they've cancelled it) we have in the last few months both said "I wish they would hurry up and die" because I'm not sure how long we can last doing this.

With this mortgage problem of ours, we really do not have the time (or energy) to deal with it. But I'm going to have to and I would like advice on what to say or suggest to the bank. Sometimes, I know, I'm clutching at straws, but if I don't ask I won't find out.
At least other people here understand and are trying to help and for that I am very grateful.

Rant over.

Peelerfart

Sidley,

You really didn't have to explain yourself about your elderlys

To anyone.

Good luck

sidleyllan

Thank you peelerfart.