Struggling and need some advice if anyone can think of anything?

elsien

If you think your care needs financial assessment is wrong, have you challenged it?
if your care needs are predominantly health related, would you qualify for CHC funding? 

Can you afford your dogs if you can’t afford to pay for care costs?(dog owner here so I do fully understand the implications of that question).

[Deleted User]

TheAble said:

Lover_of_Lycra said:

TheAble said:

One possible idea is to ask the bank if you can go interest only on that £60k.

And then what? Even if the mortgage lender agreed to this, which I doubt, the capital will eventually need to be repaid. 

Upon death the house is sold and the bank takes back their 60k out of the proceeds.

The mortgage term ends in 6 years and 8 months.  Lenders don't simply give people interest only mortgages when there no means other than selling the property to recover the outstanding capital due nor do lenders allow people to go past the end of the mortgage term indefinitely.  

Galloglass

I am now physically disabled,

I am claiming all I am entitled to

Are you in receipt of personal independence payment (PIP) - a benefit and income which helps people deal with living with a disability. Your local advice charity may be able to help. Surprised it was not mentioned when discussing your future care needs.

As regards the house, lots of people have the view that "my home is my pension" but when push comes to shove, they are loathed to draw on that pension - and get rid of the mortgage millstone. You've got some time to assess your housing needs and a chat with Age Concern might help with crystallizing what you can do in the next stage. 

TheAble

Lover_of_Lycra said:

TheAble said:

Lover_of_Lycra said:

TheAble said:

One possible idea is to ask the bank if you can go interest only on that £60k.

And then what? Even if the mortgage lender agreed to this, which I doubt, the capital will eventually need to be repaid. 

Upon death the house is sold and the bank takes back their 60k out of the proceeds.

The mortgage term ends in 6 years and 8 months.  Lenders don't simply give people interest only mortgages when there no means other than selling the property to recover the outstanding capital due nor do lenders allow people to go past the end of the mortgage term indefinitely.  

I'm not saying you're wrong, but it doesn't hurt to ask. Surely it's more hassle and cost for a lender to repossess the property, get the money back just to re-lend it again to some other borrower? As long as there's sufficient equity in the property I would have thought it would make more commercial sense to allow the owner to keep living there and just pay the interest. But perhaps rules are stricter nowadays.

[Deleted User]

TheAble said:

Lover_of_Lycra said:

TheAble said:

Lover_of_Lycra said:

TheAble said:

One possible idea is to ask the bank if you can go interest only on that £60k.

And then what? Even if the mortgage lender agreed to this, which I doubt, the capital will eventually need to be repaid. 

Upon death the house is sold and the bank takes back their 60k out of the proceeds.

The mortgage term ends in 6 years and 8 months.  Lenders don't simply give people interest only mortgages when there no means other than selling the property to recover the outstanding capital due nor do lenders allow people to go past the end of the mortgage term indefinitely.  

I'm not saying you're wrong, but it doesn't hurt to ask. Surely it's more hassle and cost for a lender to repossess the property, get the money back just to re-lend it again to some other borrower? As long as there's sufficient equity in the property I would have thought it would make more commercial sense to allow the owner to keep living there and just pay the interest. But perhaps rules are stricter nowadays.

It makes commercial sense for the lender to start repossession proceedings once the mortgage term ends as all the lender is interested in is getting the capital back. This means selling the property for whatever will repay the mortgage which could be significantly lower than the owner selling the property themselves and the lender will look to recover the repossession costs from the owner too. Plenty of people who took interest only mortgages in the 90’s and early 2000’s, who have no capital repayment vehicle in place, are finding this out now that their mortgage terms are coming to an end. There are a number of threads from such individuals on the Mortgages & Endowments board. 

TheAble

What's the point of getting the capital back just to re-lend it again, at presumably a similar level of interest? Why not just leave it lent? 

monetxchange

Mortgage lending is extremely hard at the moment and I can't see they'll be queuing up to lend to a de facto retired person who has no income prospects in the future, no savings and no pension. All of OP's money issues seem to have escalated by holding on to this house by all means possible and I'm not sure that's in their best interest going forward.

[Deleted User]

TheAble said:

What's the point of getting the capital back just to re-lend it again, at presumably a similar level of interest? Why not just leave it lent? 

It might not be at a similar level and it could be to a less risky customer or maybe the lender won't lend it out at all. Additionally, the lender doesn't want to be getting tangled up waiting for probate to get the money back they should have received years, possibly decades ago. 

There isn't a bottomless pit of cash.  We've already started to see some credit card issuers reduce the credit limits of cards of those not using a lot of their available credit and/or who they see as higher risk customers.  It stands to reason that a mortgage lender would want their capital back by the end of the agreed mortgage term rather than holding out indefinitely for it.

TheAble

Alright - I take your point!

susleggott

The type of mortgage where you can stay and pay interest only for life does exist - that’s a Retirement Interest Only mortgage and suited to exactly this kind of scenario. The borrower does need to have income to keep up payments though and often a lifetime mortgage (equity release) gives more peace of mind because they can stop making interest repayments if they can’t afford them. 

OP, why were you advised to avoid equity release? It sounds like it could possibly help you clear the capital balance and enable you to keep living at the house.