Cannot pay interest only mortgage final balance

couldsavemore_2

Hi , We are in a right mess. Our Interest only part of the mortgage finishes in march (15000) and there is no way we can pay it .we are obviously worried sick about it . Plan to ring BS today and tackle the issue . Has any one any advice .Our house is worth roughly 280,000.
the rest of the mortgage will be paid of in March. We do have other debts. Husband is retired but on a decent pension I am self employed , have been for the last year, so I don't think we will be eligable to borrow any money

jackieblack

The obvious thing would be to ask your lender to extend your mortgage term and convert the ‘interest only’ balance to a ‘repayment’ basis.
Alternative solutions would be to try and remortgage/borrow the £15000 from another lender, or to sell up and downsize.

How did you plan to repay this amount when you took the mortgage originally? eg is this due to a shortfall in an endowment maturity?

couldsavemore_2

This was a top up to do house improvements in 2007 just before the recession.Because it was 'Only 15000' we planned and could afford to save to pay back . since then due to recession I lost a well paid job, have done lots of lower paid ones in the meantime and now am self employed . During this time my husband has had cancer twice plus a complication resulting with me not working for long periods of time. Hence never manged to save the money. All the rest of the mortgage was repayment ( no idea why this part was interest only can only guess we thought it a good idea at the time )We can't move, or it would have to be last resort. I'm going to ring lender this morning and hope they have options but i'm really worried in case they haven't.

elsien

Is the level of your other debts likely to impact on affordability?

getmore4less

What is your current payment?
What are your other debts?
What income is there?

You need a plan/proposal that will deal with them both

Have you got a budget/SOA?
http://www.stoozing.com/calculator/soa.php

Keep_pedalling

The obvious answer is to downsize clear the mortgage and as much of your other debt as you can.

Keep_pedalling

From Dec 2016

Hi , I would like to join in please , will sort out out a target in the next few days . Need to start 2017 with complete control over our finances.

What went wrong?

couldsavemore_2

I should imagine 2nd round of Cancer , and a severe case of burying head in sand again. If only ...

couldsavemore_2

moving has to be last resort. For one would take to long and we live in a small house now. also run a business from home which could be extra hassle.
However if thats what we have to do then we would do it. Just hoping there is another way.
Thank you for all the replies. We are going to ring lenders in a moment . will post how that goes , may help someone else .
then what ever they say will knuckle down and sort these finances.
Thank fully my business is doing well so at least we have money coming in.

couldsavemore_2

Spoken to Lender . They may offer us a repayment Mortgage to cover the £15000. Need to ring back after i have done my end of year accounts.They advised me to ring Step change who have been very helpful. Have give me a few options to look at. Gone through our budget and expenditure with them, seems we have quite a bit of disposable income to go towards it.
Feeling better than I did this morning, I was in a panic. So glad I rang them.
Will be looking at all ways to save money in every area that we can.

getmore4less

Gone through our budget and expenditure with them, seems we have quite a bit of disposable income to go towards it.

Has your debt been going down?


move over to debtfreewanabee

https://forums.moneysavingexpert.com/forumdisplay.php?f=76

get a full SOA done based on what you spent in 2018

as well as guestimate of one for 2019

Before you deal with them again you need a very good understanding of your finances.