Interest Only Mortgage coming to an end

diggingdude

Need to sell, mum needs to accept this as a penalty for past mistakes

jacquie3167

tacpot12 wrote: »

What was his mother's plan as to how she was going to repay the mortgage at the end of the term?

He says he has no idea what her plans were on how she was going to pay it off. He has tried asking her these questions but she doesn't seem to grasp what he means. He is finding it very frustrating and he doesn't know who advised her on this arrangement. He was not living with or near her at the time so this is all new to him. No family member has admitted helping her with this and she says she cannot remember who accompanied her in order to get the mortgage in the first place.

getmore4less

there has been some serious head in sand.

when he joined the mortgage it would have been obvious the payment was not enough to pay the mortgage off,

16years ago it would have been over £1000pm.

What rate is the mortgage?

another option is the son gets himself a rich partner to buy into the place.

jacquie3167

AnotherJoe wrote: »

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?



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.

I totally understand where you are coming from and believe me I have also made the same comments myself. Thanks for your advice though, it is really appreciated.

getmore4less

Whats the back history before 16 years ago when this place was mortgaged for £200k when she was around 60

enthusiasticsaver

The property will either need to be sold or they can wait until son is 55 and look into equity release. I am amazed she got an interest only mortgage but most lenders won't touch them now. Does the mum have other assets? Can at least part of it be put on to repayment or they start making overpayments to reduce capital?

foxy-stoat

jacquie3167 wrote: »

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.

Tenants in Common with equal shares or Joint Tenants?

It matters not that the Mum is reluctant to sell if she cannot afford to keep it in 7 years time.

There enough there to sell and down value the house when the time comes.

AnotherJoe

BTW, just occurred to me there are several factors in favour of downsizing now not in 6 years time.
1. They can do it at leisure. Especially if its an awkward place to sell. Better that than mortgage co breathing down your neck.
2. Mum is getting older and older people being unwilling to move is a known factor. At closer to age 80 it may be much harder for her to move, she may not be in a good mental state, all sorts of medical issues may intervene.Statistically the odds will be much higher it will be harder for her to move, aged 80 than 74 lets say.
3. Combination of 1 &2, lets say mum is getting a bit absent minded and stubborn, doesn't understand why she has to move (if shes like that now what will she be like in 7 years time) , mortgage co is insistent, now you have a real nightmare* possibly involving legal action

4. It will be easier for him to get a mortgage now, if one is needed to "top up" the purchase, than in 6 years time.




* there was case reported here a few months back, someone in this position, being taken to court to force a sale because "independent stubborn mum" (aka dementia but daughter was in denial) didn't see why she had to move and was refusing.

getmore4less

LPA needs to be in place for both ASAP or there could be a catch 22,

Can't sell because one has lost capacity.
Have to sell because the mortgage company want their money.

What's the max they can afford per month and what does the long term income look like for the son?

even with a good extension on the term it's going to need over £1kpm or some lump sums from somewhere.

silvercar

If they put it all in son's name, he may be able to get a mortgage to the age of 70 or possibly older. That would lower the repayments.