Short Term Loan Secured of Home - Is it Possible?

EndofMortgage

Is there any financing solutions that will allow me and my wife to live in our house for another 2 to 3 years? We can afford to do it and our home has a market value 3.5 times greater than the proposed loan but nothing seems possible. A bridging loan will only last one year and has high fixed costs. If renewed for a second year all fixed costs have to be paid again. An equity release is at the opposite end of the scale with it only being suitable for a long term solution. We live in a large 7 bedroomed house by ourselves so will definitely want to downsize but not for another 2 to 3 years. We are retired with a small pension pot but no income to support a new traditional mortgage but as stated above there is significant equity in the property plus we have enough cash savings to make interest payments and live on for 3 or more years.   

Background

With my wife we took out a 12 year Offset mortgage with the Woolwich which is now owned by Barclays. The 12 years has just finished and the mortgage amount is paid off but there is an outstanding loan amount on the offset account. We have savings to pay off some of the balance but Barclays will not entertain the idea of a new loan even when told that we would pay higher interest rate. Barclays have actually been incredibly unsympathetic. My mum died two months ago at the same time as I first spoke to Barclays and I told them about the depression I was suffering but I was told we had to put the property on the market straight away. My recent conversation with the bank was earlier this week I brought up the subject of the Coronvirus saying I didn’t think it was fair or reasonable to have strangers come into out home at this trime but still I receive a “form letter” today with no reference to any of my concerns. There are many other problems with Barclays but because I have thought they were my only solution I haven’t complained about their many failures.

If there isn't a product available and I want to negotiate with or fight with Barclays should I employ a financial adiser or a lawyer to help me communicate with them? As I've said they have not been responsive or sympathetic to my situation so far    

MovingForwards

How much is the outstanding loan?

What's your monthly income?

Could you take in a couple of lodgers? 

Thrugelmir

Your assessment of affordability and that of the lender is totally different I suspect.  Bottom line is that you would have been aware that the debt was repayable and should have planned accordingly. The lender operates under regulatory supervision. Lending policies are set to reflect this. 
With a small pension income doesn't sound if borrowing a sizable sum is an option. Savings aren't factored into the equation as are easily spent. 
Your best hope is to obtain a temporary stay of execution to sell the property on your terms rather than a forced sale by the lender. Which would incur additional costs. 

amnblog

Have you have you had advice on the Equity Release options, you may be surprised.

EndofMortgage

Thank you for the quick replies. Unfortunately it seems what we want is not something that is available and that is the deeply frustrating and depressing thing.  Although the Woolwich/Barclays mortgage was for 12 years we have lived in our home for over 20 years and wanted to do so for another 2 or 3 years so our daughter can finish university and our son settles down before we undertake the disruptive process of downsizing but we do have to downsize for many various reasons.

We are far from being considered poor in that that the house is valued at around £1.4 million and the outstanding offset loan amount is £400K and we have more than sufficient additional cash reserves to survive for up to another 5 years or so but we don’t have enough cash to pay the £400K that is remaining in the loan section of our Woolwich/Barclays Openplan offset mortgage. I am over 65 and don’t work and my wife is a teaching assistant on a low income so a traditional mortgage isn’t possible for anywhere near the amount required.

 When the term of the mortgage was approaching I believed we could get a bridging loan for 2 to 3 years and put the house on the market next year but it seems only one year bridging loans are possible.  In hindsight I should have done more research sooner but with £1million equity I genuinely thought it would be easy.

 I have explored these options

-          Ask Barclays for a new 3 year loan or extension on existing one

-          Get a one year bridging loan and when it expires get another one

-          Use an equity release plan

-          Get a secured homeowner loan

 Option one is by far the best one but Barclays won’t change their position. They did offer to allow us a one year extension but we had to put the property on the market immediately. I even asked (in writing and verbally) if that could wait until the Corona virus scare was over as I didn’t want a string of strangers in our home but this plea was ignored. They seem to only want to do one thing and that is get us off their books ASAP.

Thrugelmir

One further option. Could you not use your savings to reduce the £400k balance owed. Then apply for a much smaller mortgage?  You might then meet criteria. 
Or are your savings just sufficient to service the current interest charges that are being levied. 
Corona isn't a scare it's very real. There'll be be profound impacts on the lending industry as a consequence. With at higher risk groups influencing underwriting criteria. Losses of an income is potentially going to have a widespread material impact. 

xylophone

You can put the property on the market - at the moment you may well not get many viewers  - this may suit you?
Or had you considered an auction?