End of Mortgage term but nowhere near paid

Jas004

Bit of advice please. Apprehensive about calling Mortgage company and need heads up before taking the plunge. For various reasons we have been on an interest only mortgage. As my husband is 65 next year, I will be 51, the mortgage term will be up but is no where nwar ready for being paid off. What will happen when the time arrives?

Thrugelmir

The mortgage lender has written to you on several occasions over the past few years to ask you how you intend to clear the debt. If you fail to take any action. Then the lender can ultimately seek repossession of the property. As you'll be in breach of the terms and conditions you agreed to when taking out the mortgage. The lender can also charge you the costs of administering the default and levy a penal rate of interest. 

Please don't stick your heads in the sand like ostriches. Engage with the lender. Consider your future plans. Is it possible to switch the mortgage onto a repayment basis? 

enthusiasticsaver

I agree with Thrugelmir.  If the mortgage term finishes next year the lender can insist on repayment either by you selling or repossession so don't ignore it.  Some lenders will lend past retirement age now but ultimately what is your plan for repayment? 

Jas004

They haven't written to us to ask us to repay. Only sent statements. So basically we are liable for the full mortgage repayment? Despite my age of (what will be 51) can I not arrange a new one with them soley on my salary?

MovingForwards

How much is owing?
Are you / your husband working
What's your income? And your husband's?
Any debts?
Any credit history issues? Eg late / missed payments, defaults, CCJs, IVA etc

How many children and ages?

You've put very limited information up and no one can offer any real suggestions.

MWT

What is the house worth, how much is required to redeem the mortgage?

How had you planned to repay the outstanding amount? ... a lump-sum from a pension perhaps?

... or did you really have no plan at all to cover the amount owed?

It may not be too late to sort this out even now, but it has certainly been left longer than it should have been if your husband is approaching 65...

... but to answer your question as asked, when the time runs out the lender expects to be paid in full, so lets see if there is anything that can be suggested to help you deal with that...

Thrugelmir

Jas004 said:

They haven't written to us to ask us to repay.

Under the guidance of the FCA. All lenders had to write to borrowers holding interest only loans to remind them that the mortgage debt needed to be settled. Lenders also asked  that borrowers inform them how they intended to do so. All borrowers have therefore had time to consider their options. Those that did nothing. Will find their options somewhat limited. As there's no responsibility on the lender themselves to find a solution. The default solution is obviously to sell the property. 

MWT

Jas004 said:

They haven't written to us to ask us to repay. Only sent statements. So basically we are liable for the full mortgage repayment? Despite my age of (what will be 51) can I not arrange a new one with them soley on my salary?

I'm sure this is all worrying and stressful and possibly needlessly so but we just don't have enough details from you to help...

If you are uncomfortable sharing your salary, your husbands pension details, outstanding mortgage amount etc. on here, approach a mortgage broker and see if they think it will be possible to arrange a new repayment mortgage for the amount you still owe on your current mortgage.

It is possible that you could arrange that with your current lender, but best to make sure you have alternatives as there is no guarantee that you will meet your lenders current requirements even if they are willing to remortgage.

Jas004

Thanks I will look in to the possibility of remortgaging

MWT

Do use a good broker though, don't just depend on the mortgage calculators on the High St lenders websites.

clueless_but_curious

There is always the option of selling up and getting a static caravan