Interest Only Mortgage & Remortgage HELP!

zeb86

Hi guys, I'm looking for some advice in regards to my mothers situation. Unfortunately she has been on an interest only mortgage for the past 20 years. Now there's 4 years left on the mortgage Lloyds (who she has the mortgage with) now want that money back. Obviously she's unable to pay it all back, its not a massive amount, in comparison to the current worth of the property, but it's around 90k. She is trying to remortgage the property, but coming's up against issues due to her age and affordability. There was a suggestion I could go onto the mortgage to help, however this would mean I would be unable to buy my own property in the future, (which I'm hoping to in the next 3ish years) or would it?
She has decided she doesn't want to go own the equity release route, as we understand you will ultimately lose your home.
She has a loan which will end in 2 years, which would free up money and therefore she will be able to cover the cost of the remortgage, however she is worried if she does not act now, she will lose the ability to remortgage altogether due to her age (she will be 72). Would that make any difference?
Is there any suggestions or advice? I would really appreciate it!
Thanks 

[Deleted User]

She doesn't want to equity release. Fair enough, but what does she actually want?

Does she just want to keep doing interest only forever and then leave the equity to you when she dies?  Does she want to repay the debt to give you a larger inheritance? 

Retirement interest only might be an option.  That would just keep a small payment each month to pay the interest and the debt doesn't increase.  
Does she have spare money each month to go to repayment?  Does she even want to spend more money to clear the debt when its not going to benefit her in any way? 

With equity release she will not lose her home.  You will lose your inheritance.  That's a big difference. 

MovingForwards

You say it's about £90k to pay the IO mortgage off.
What's the estimated current value?
What's her monthly income?

If you go on the mortgage you will lose your FTB status and also have to pay the stamp duty additional home % too (when you buy your own home)

Edit to add the bit is brackets.

AnotherJoe

Are you sure Lloyd's want the money back now when the mortgage has four years to run?
is it possible they asked what her plans were to repay it when the mortgage ends in four years? 

When you say another loan which ends in two years will free up money and allow her to pay do you mean monthly payments? Or will it somehow provide £90k?
and lastly, yes don't get Yourself  on her mortgage that will mess up your FTB status and be very costly and more to the point likely prevent you taking out another mortgage anyway. 

Edit: could she downsize? Sell up and buy something smaller with the equity ?

molly22

I have an IO mortgage with 8 years left.... is the mortgage company really likely to ask for payment before the end of the mortgage term???

MovingForwards

molly22 said:

I have an IO mortgage with 8 years left.... is the mortgage company really likely to ask for payment before the end of the mortgage term???

No, 99.99% of people will be fine.

It's probable OP has misread or been misinformed about the contents of the letter, and it's not being called in now.

Only if there's a huge breach of the mortgage terms would a lender call in the mortgage loan.

csgohan4

remortgage will depend on affordability and age, 

while unpalatable as it is, downsizing maybe an option they will have to consider if not keen on equity release and not able to remortgage or raise funds

Do not go onto the mortgage, as above the FTB is very valuable unless you know what your getting yourself into