Mortgage help!

Youreds89

My parents are in a bit of a mess with there mortgage, they are both 50 and have been paying interest only for the last few years. they owe around 110,000 pound. they both have terrible credit so for them to get a mortgage on repayment would be ridiculous amounts per month as the banks will not touch them at all. they currently pay 400 pound per month interest only, I'm worried they are going to loose the house due to there age I have consolidated most of there day to day debt, credit cards ect. the only thing I can think of is for now is to keep paying the interest over the next few years, whilst in the meantime them give me 100 pounds per week to put a side then possibly save up a little deposit to put forward to try and get a bank mortgage? or possibly keep taking this money over the next 10 years and saving it myself to pay off the house? is there another way guys I don't want to see them in trouble but its really worrying me. HELP

flashg67

I had interest only until recently but rather than save towards paying it off, I set up a standing order to pay off an extra £100 per month to Nationwide. With 110k outstanding, it'll take some time to start making a difference, but it will bring down what they owe over time, until they can remortgage, or build up equity to look at selling & downsizing?

ACG

They can overpay on their current mortgage presumably? That £100 a month will have a bigger effect than giving it to you if they overpay their mortgage (assuming their mortgage is a higher rate than the savings rate).

Gary_smith

If you don't mind me asking, what's the approx value of the house? There are many options available to your parents but a lot may depend on the level of equity they have in the property.
Gary

Youreds89

I!!!8217;ll have to look into this I!!!8217;m pretty sure there locked in with no extra payments allowed there mortgage company seems to be an absolute con, it!!!8217;s southern pacific mortgages which I believe has either gone bancrupt and the have took over the previous company or this one has to another company. Either way one has been passed on to the other. My plan was to take that 100 each week for a year to build up some sort of deposit to then Aproach the bank with a little deposit for them to then get a repayment mortgage, thanks for the replies guys if you have more information please help ! Cheers

Youreds89

Hi Gary the house I would say is worth around £130,000 with 109,000 owing

silvercar

As they get older, getting a new mortgage will be harder. The term will need to be shorter and the mortgage repayment, so the monthly repayments will be much higher.

They really need to sit down and work out where they will live when the mortgage ends. When is this?

Youreds89

They have 15 years to get it paid off . So 65 would be ideal.

John-K_3

£400 per month for the interest, but that will decrease as they pay off the principal, which is £109,000,or a little over £6,000 per year, or £500per month.

That adds up to £900, but the reducing interest means that £828 would be about right. Can they afford that per month? A couple of years of that, and their credit will likely look better, they will have more equity, and can likely remortgage onto a lower rate.

Youreds89

Thanks for the message John, at the moment yes it’s 400 a month for just interest but as over the next year they are going to save an extra 100 a week to go to the bank at the end of it with a possibly have a bit of a deposit to get a better repayment mortgage. I’m hoping with the help from me they will have £10,000 at the end of the year which they will need a repayment mortgage at 51 years old of £99,000 I’m hoping the repayments on this would be around 650-750 a month and get this smashed off. On the other hand I did think about getting a property evaluation to have some possible equity. This possibly would help them get a better loan if there is suffiant equity. At this moment in time I think saving as hard as possible while paying he interest would be the best option.