Mortgage help/advice 28 February at 3:23PM in Mortgages & Endowments 8 replies 281 views

MO927

Hi Guys not sure if this is the right place to post this but ill try anyway lol. Im needing some advice/help as im in a real pickle with my mortgage. Im on an interest only mortgage with 9 years left to run on it. We were put onto this by a broker as the best option for us at the time. We were never advised or offered an endowment or policy to run along side the mortgage and with the mortgage company not willing to let us switch to repayment its left us with the prospect of losing our home in 9 years ? I dont know what to do what way to turn or options etc.

Peterrr

I have very little knowledge of such things, but there is a possibility your broker failed to provide adequate advice (in respect of not mentioning an endowment/savings vehicle). I suggest you reach out to your mortgage provider (all lenders will have a specialist team to help borrowers in difficulty) or Citizens Advice Bureau. Good luck

MO927

Thanks for the reply ! I did consult the mortgage lender but they were unwilling to help in any way, just asked me if i had a way of paying the balance at the end of the term, wouldnt consider switching me to a repayment or anything ?

ACG

I dont think endowments were around 9 years ago, in any event they are investments so a mortgage broker would not have been allowed to recommend them anyway.

Who is the lender? They may not allow you to go on to repayment, but you may potentially be able to overpay each month and bring the balance down that way. If they do not allow that, the only other option is to open up a savings account of some description and put money in there each month. In 9 years you should hopefully have a big enough balance to clear it or at least the vast majority. If there is a small balance, you could potentially take out a small loan if needed or use a pension or something to pay off the remainder. 

Just divide the balance by the number of months left (12 months * 9 years = 108 months), that will give you an idea of how much you need to be overpaying/saving each month. 

dimbo61

Oh come on.
You can make over payments every month.
You must have known when you signed up to your Interest only mortgage that you weren't paying any of the capital off.
When the statement arrived at your home every year you did Open it ?
Did it say you still owed £XXX,XXX !
You can set up a direct debit to make an overpayment each month when you get paid.
Not sure how old you are or retirement plans but start by making regular overpayments.

MO927

dimbo61 said:

Oh come on.
You can make over payments every month.
You must have known when you signed up to your Interest only mortgage that you weren't paying any of the capital off.
When the statement arrived at your home every year you did Open it ?
Did it say you still owed £XXX,XXX !
You can set up a direct debit to make an overpayment each month when you get paid.
Not sure how old you are or retirement plans but start by making regular overpayments.

I wasnt originally put onto an interest only mortgage it was after our 1st 3 year deal was up. I was 24 when I got the mortgage and not clued up on financial aspects of a mortgage so no I didnt know what I was signing up for !! Current mortgage is with Kensington mortgages ? Not the most pleasent of conpanies to deal with. Overpayments with the high balance remaining wouldnt be realistic I dont think.

JMA74

Have you explored remortgaging awsy from kensington?   Your interest rate there must be quite high

getmore4less

what's the
rate
amount
income
house value

ACG

MO927 said:

dimbo61 said:

Oh come on.
You can make over payments every month.
You must have known when you signed up to your Interest only mortgage that you weren't paying any of the capital off.
When the statement arrived at your home every year you did Open it ?
Did it say you still owed £XXX,XXX !
You can set up a direct debit to make an overpayment each month when you get paid.
Not sure how old you are or retirement plans but start by making regular overpayments.

I wasnt originally put onto an interest only mortgage it was after our 1st 3 year deal was up. I was 24 when I got the mortgage and not clued up on financial aspects of a mortgage so no I didnt know what I was signing up for !! Current mortgage is with Kensington mortgages ? Not the most pleasent of conpanies to deal with. Overpayments with the high balance remaining wouldnt be realistic I dont think.

If you can not afford to overpay an interest only mortgage, how would you manage to pay a repayment mortgage? 
Even if you can not afford to overpay by the amount you need, you should really be trying to put a dent into it. The longer you leave it, the harder it will be to catch up. The last thing you want to do is get 9 years down the line and be wondering how you are going to clear the balance. 

It is easier to find a way to fix a £50k outstanding balance than it is a £150k balance (as an example). 

If you are thinking of making a complaint for compensation you have to be able to prove a number of things:
- You did not know it was interest only - the broker may have paperwork to say otherwise. There is also the argument of annual statements. 
- You did not want/need an interest only mortgage - but if you can not afford a repayment mortgage now, could you have 9 years ago? 
- There were better alternatives - again, if you could not afford repayment then it is hard to prove there were better products.

There is no magic solution, you need to overpay or save. If you can not do that, you are going to be in the same position in 9 years time.