Interest Only Mortgage coming to an end

getmore4less

If the son is 53 with 7 years left then the mum is probably going to be around 80 then.

where they dishing out mortgage 16y mortgages to 64 year olds 11 years ago?to

jacquie3167

ACG wrote: »

He/his mother or both could overpay on the mortgage.
Quick calculations show he would need to overpay by around £2k a month which I am guessing is not an option?

His mother could do an equity release mortgage - although it would depend on the equity in the house.

What is the long term plan? In 16 years, his mother could pass away? I am guessing in 16 years she will be pushing 90. She may go in to a care home. Both of which would mean the mortgage would need redeeming and probably the house being sold.

Thanks for your help and advice.
1) Yes the £2K per month is not an option.
2) He has been told that the equity release cannot be done as he is the youngest on the mortgage and therefore he needs to be 55 years old (The mortgage is in both his and mum's name).
3) There is only 7 years left on the mortgage and his mum is reluctant to sell. Mum is in her early 70's.

jacquie3167

thriftylass wrote: »

Probably best to speak to the mortgage provider? Was the mortgage taken out before April 2014 (not sure if just a takeover counts).

https://www.moneyadviceservice.org.uk/en/articles/ways-of-repaying-an-interest-only-mortgage#re-mortgaging

Thanks for your help.
The existing mortgage lender says the new mortgage payment amount will be approx £2k per month which he cannot afford.

jacquie3167

getmore4less wrote: »

Sounds like he just started paying the mortgage and did not take it over.

That is a significant difference please clarify.

options
Start paying off capital,
Make sure it is on a good rate.

Is the mother still there, how old is she?

what's the house worth

Thanks for your help.
He was added to the mortgage as he found out that mum was having difficulty paying. So now a joint mortgage. Mum is in her 70's.

Thrugelmir

What's the property worth?

AnotherJoe

jacquie3167 wrote: »

2) He has been told that the equity release cannot be done as he is the youngest on the mortgage and therefore he needs to be 55 years old (The mortgage is in both his and mum's name).

Your friend cannot be telling you the whole story. If the mortgage is also in his name whats his excuse as the the equally guilty party to taking out an IO mortgage with its consequences, when he took it out 9 years ago?

jacquie3167 wrote: »

3) There is only 7 years left on the mortgage and his mum is reluctant to sell. Mum is in her early 70's.

You might as well say "mum is reluctant to pay the rent". Its not really an argument.

Her 60 year old self (and careless son) took out a 16 year mortgage and passed the responsibility for paying it off to their older selves.

Seems as if downsizing is the likely solution here. Or wait until he is 55+ and then ER, though that will likely destroy any equity in the property over the subsequent years.

He's got 7 years. He can wait for 6 lets say. In the meantime save so he can build up equity for the house he/they downsize into.

jacquie3167

foxy-stoat wrote: »

Did he not find out about the mortgage when he took over it? He must of had to sign something ( had read something ).

Thanks for you help.
He says he knew it was an interest only mortgage but had no idea it was only for 16 years. He says he thought it was a 25 year mortgage. When he changed the direct debit for the mortgage to come from his account instead of his mum's account, he was advised that there was only 7 years left on the mortgage. When he asked his mum about it she said that the only way she could get the mortgage was if it was an Interest Only mortgage. She says she has not been paying into any other schemes in order for the balance to be paid off after the 16 years are up.

jacquie3167

AnotherJoe wrote: »

I'm presuming as per post 4, by "take over" OP simply means "started paying his mothers mortgage"[/QUOTE

Thanks for your help.

He was added to the mortgage so it is now a joint mortgage with him and his mum.

jacquie3167

Thrugelmir wrote: »

What's the property worth?

Thanks for your help.

A valuation was done approx 4 years ago and it was worth £650k

jacquie3167

davidmcn wrote: »

Possibly, though that would suggest mum still owns the house (and lives there?) so the question "will he need to sell up" doesn't make sense.

Thanks for your help.

The house is in both names.
He lives with mum in the house.
Mum does not want to sell the home but he is worried that they will eventually lose it if they cannot sort something out in the next 7 years.