Interest only

Marty149

Hi , I’m totally in a mess don’t know which way to turn I’m 50yrs old had a interest only mortgage for last 16 years, 147,00 just buried my head in the sand , I’ve got saving of 60,000 which was for me and my wife to enjoy later life , we’re not huge earners plus we don’t really want to sell our home , just don’t what to do now at the stage where I’m starting to panic for my future!. 

TadleyBaggie

What equity do you have in the house? Unless you have a way of saving the £147K to pay off the mortgage for when the time comes, selling the property is pretty much your only option.

Marty149

House value £350,000 .. be sad if we had let it go , not sure what we would get to replace , getting quite stressed about it , not sure what we can do , feel we’ve messed up , 

danfreestone

Marty149 said:

Hi , I’m totally in a mess don’t know which way to turn I’m 50yrs old had a interest only mortgage for last 16 years, 147,00 just buried my head in the sand , I’ve got saving of 60,000 which was for me and my wife to enjoy later life , we’re not huge earners plus we don’t really want to sell our home , just don’t what to do now at the stage where I’m starting to panic for my future!. 

If it i was me i would look at paying a good 40-50k off and then take out a mortgage for the remaining 100k the good thing is your addressing it now so you can get a 15 year mortgage and for the rest you can get 2 year fixed at around £600 a month or £880 without paying the lump sum. 
It would ensure you can keep your home 

big_saver_5

Could you turn it into a repayment mortgage over 20 years? 

tacpot12

Danfreestone's suggestion is probably the best route if you really want to stay in your house - convert your existing mortgage to a repayment mortgage now and use most of your savings to make the new mortgage affordable. You do have time, but I would not delay on converting the mortgage - you need all the time you have to make the repayments that are due. 

Selling up is a viable strategy, but only if you can buy somewhere for £200K in your area (or any other area you would be happy to live in). If you bought a retirement home before the mortgage was due to be repaid, you would have done the downsizing and moved when you were fit and healthy - many people plan to downsize, but put off doing it for so long that when it becomes necessary, they are too infirm to do so. 

You could switch to a repayment mortgage, and keep downsizing as the backup plan in case you can't clear the mortgage in time. Other things may happen before the end of the mortgage term, such as receiving an inheritance, which might help keep you in your home. Cutting your living costs so you can repay the mortgage at a faster rate might also help. You could post a Statement of Affairs on the Debt Free Wannabe board where you will more advice that you will want about how to trim your  living costs!

Well done for lifting your head out of the sand now while there is still time to do something about it. Make sure your wife understands the situation and get her help to do all that is necessary. 

MWT

Marty149 said:

Hi , I’m totally in a mess don’t know which way to turn I’m 50yrs old had a interest only mortgage for last 16 years, 147,00 just buried my head in the sand , I’ve got saving of 60,000 which was for me and my wife to enjoy later life , we’re not huge earners plus we don’t really want to sell our home , just don’t what to do now at the stage where I’m starting to panic for my future!. 

Look at the positive aspects, you are only 50, still a long way from retirement, and you have a good amount of savings.

These are all good things and you've started asking the right questions while you have time to fix things so you don't have to leave the property.

Converting to a repayment mortgage is an obvious route to consider, and with the expected retirement age slipping back as it has, you should have no problems getting a 15 year term and depending on your pension provisions, 20 or even 25 years could be possible.

Remember that even if you start out with a long term, you can choose to repay a little faster to reduce the term as you are able.

This doesn't feel like a situation to be panicking about, sure, fixing this a while ago would have been better but it is still very fixable now.

dunstonh

Sale is not the only "panic" option if you do nothing.  Equity release would be available but you still have plenty of time to do something about this, as mentioned by those higher up.

MWT

dunstonh said:

Sale is not the only "panic" option if you do nothing.  Equity release would be available but you still have plenty of time to do something about this, as mentioned by those higher up.

Equity release on its own is not going to cover the balance on the interest only mortgage, and you can't take equity release without clearing any other mortgages. In combination with their entire cash savings it might come close, but a lot depends on the age of the youngest life, which may not be the OP...

At 50, there are better options to consider first I'd say...

getmore4less

The two important questions

When does the current mortgage run out?

How much can you afford a month?

Marty149

Hi guys thanks for all comments, I must say losing a bit sleep over it , Our circumstances have changed , between us 34k come in per year , this what I’m concerned about not being able to get a mortgage.

our current interest only mortgage has 14years to go , I so wish I’d never done it!  I’m currently self employed which seems to be a hurdle in its self my wife is in fulltime employment, 

It’s knowing where to start as I’ve just turned blind eye to it over last 15 years .