Mortgage coming to end, how to pay back.

DigDag

Hi.

I'm in my middle 60's, have a mortgage of under £30,000 on a 4 bedroom house, so lots of equity.  House is worth probably more than £250-300,000. My mortgage loan is coming to an end in 2 months, with nothing in place to pay it off [because of circumstances] except for the equity. At the moment. I have a couple loans with my mortgage. 

I have recently had a letter from my lender [Lloyds Bank] to contact them to discuss my mortgage. Apparently one of my loans has to be paid off earlier than the rest of my mortgage. But Lloyds have been good about it as I've just had a total knee replacement.

Is there any way [cheapest] I can get the money to pay off the mortgage when it matures, so I can stay in the house for a year or two until I get things straight.

Is there a way I can get the money to pay off my mortgage against the equity?

Is equity release an option for a year or two until I sell my house?  Although I'm not sure I want to go down that root.

I am willing to sell the house, but would rather not for a couple years.

Just wondering what my options are, I have not spoken to my bank yet. But prepared is prepared.

Thanks in advance

Brie

I would be looking at getting another mortgage if I were you.  Do you have any income available?  Mid 60s suggests some pension may be in payment or you are still working?

When we moved and remortgaged when I was 60 we got the term extended until I am 70 so it's just a matter of finding a bank to allow this - assuming Lloyds won't automatically roll you over to SVT.  May be a good idea to have an informal chat with them to test the waters?

Maybe you could look at getting the loans included in the total to get a lower interest rate.  I know lots of people don't recommend doing that with debt buy you're not a 30 yo with a 85% mortgage and no equity anywhere.

K_S

@digdag Depending on what income you have and your age, the most straightforward option may be to remortgage to a capital repayment mortgage. Unless you don't have other options, an equity-release might be overkill for the scenario outlined in your post.  

MWT

K_S said:

... an equity-release might be overkill for the scenario outlined in your post.  

Agreed, overkill and expensive in most cases when a sale of the property is anticipated in a couple of years time...

dimbo61

So the first place to start is with your current lender.
If your still working or getting a pension they maybe able to extend the term for a few years till your 70/75/80.
Check on the lenders website Max lending age ?
If no joy with them then find a broker 

DigDag

Thanks for the replies everyone. I have been keeping a close eye on the thread, and mulling over what's been said.
I will have to phone my bank and throw myself at their mercy. I have a little more confidence  after reading these posts. Although I am worried about 'computer says no' now it's not in the hands of humans nowadays.
I have had problems with credit in the past, but my bank gives me a score of OK in their app.

To elaborate, I will be retirement age next march with nothing other than the state pension. Due to health reason things haven't turned out how I had hoped.

My mortgage payments at the moment are less than £50 a month, and I have no arrears.
As I have no dependants I would like to cash in on some of my equity, but not equity release.

Keep_pedalling

Why put off downsizing any longer? Does it really matter if you do it now or in a couple of years time?

In your position I would not rule out ER at some point, being asset rich and cash poor is not a great position to be in in retirement and you can’t take it with you.

MWT

DigDag said:

My mortgage payments at the moment are less than £50 a month, and I have no arrears.
As I have no dependants I would like to cash in on some of my equity, but not equity release.

For simplicity and cost reasons the first step should usually be to down-size , and then some time later if'/when needed then consider equity release. (try to make sure that whatever you buy next is suitable for equity release)

Do you wish to delay the down-sizing because you want to move to a different area after retirement?

GentleGiant01

MWT said:

DigDag said:

My mortgage payments at the moment are less than £50 a month, and I have no arrears.
As I have no dependants I would like to cash in on some of my equity, but not equity release.

For simplicity and cost reasons the first step should usually be to down-size , and then some time later if'/when needed then consider equity release. (try to make sure that whatever you buy next is suitable for equity release)

Do you wish to delay the down-sizing because you want to move to a different area after retirement?

I suspect this sounds like it may be the case. 

OP, if this is the case, it sounds like selling up now and moving / finishing work early might be an option if your bank won’t allow you to keep your mortgage going for the next year. 

GentleGiant01

Thinking on what I would do in your situation…I would be tempted to buy a small bungalow somewhere circa £80k - £100k to live in and then either use the remaining equity from your house sale to either buy an annuity or purchase 1/2 BTL houses / flats. But I would absolutely need to speak to a financial expert to work out what the best option for your circumstances are, especially as rental properties can be a lot of work / risk. 

sammyjammy

GentleGiant01 said:

Thinking on what I would do in your situation…I would be tempted to buy a small bungalow somewhere circa £80k - £100k to live in and then either use the remaining equity from your house sale to either buy an annuity or purchase 1/2 BTL houses / flats. But I would absolutely need to speak to a financial expert to work out what the best option for your circumstances are, especially as rental properties can be a lot of work / risk. 

Where d o you expect the OP to be able to buy a bungalow for that kind of price?