Walking away from my home

I’m on interest only mortgage. My plan 20 years ago was to sell and pay what I owe to the mortgage provider. However, few months ago we have been told the block I live in has the same material as the Grenville tower and needs to be fixed. We have been told this may take up to 3years to sort. Mortgage matured in just over a year and I retire same time. I will only have state pension. I therefore see no other way out but to walk away and become homeless. Any advice appreciated.

Comments

  • fatbelly
    fatbelly Posts: 20,472 Forumite
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    Well definitely don't do that.

    Accommodation is the most important thing. If you're saying that once the cladding is sorted then the value will rise then sit there until it does and tell the lender what you're doing and why. If you can't pay all the mortgage, then you make a part payment.

    Will you receive Pension Credit? If so you can claim Support for Mortgage Interest.

    Can you give some figures? How much is the balance of the mortgage? How much is the property worth now? How much will it be worth once the work is done? Do you have debts that you are worrying about? 


  • silvercar
    silvercar Posts: 46,954 Ambassador
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    This situation may play in your favour. The lender isn't going to want to have to repossess and sell the property while it is not mortgageable. Contact the lender and ask to extend the mortgage by a few years. 
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • fatbelly
    fatbelly Posts: 20,472 Forumite
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    Walking away and making yourself intentionally homeless is the worst possible plan

    There are some reasons here from Shelter why this is such a bad idea

    https://england.shelter.org.uk/housing_advice/repossession/voluntary_repossession_and_handing_back_the_keys

    Are you being forced to retire at 66? I didn't think that was legal.

    https://www.ageuk.org.uk/information-advice/work-learning/retirement/retirement-age/

    Why have you posted this on the bankruptcy board?
  • pevonia
    pevonia Posts: 41 Forumite
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    Hi, thank for your advice. No I’m not being forced this is my retirement age. I don’t know if I will get pension credit as I’ve paid in 46 years of NI - in saying that I don’t really know what it is . My mortgage at the moment is £800 will rise once interest rates rise today. I also have a factor which is £200 every month so on my state pension I cannot afford this. 
    At the moment the property is in negative as no one will buy. It’s hard to say in 3 years what it will be worth. 
    Would the benefit agency pay that amount in interest for me £800 is a lot . Once again thanks for any advice. 
  • fatbelly
    fatbelly Posts: 20,472 Forumite
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    One thing you could do is get a pension forecast - may be worth keeping working for a bit until things are clearer

    https://www.gov.uk/future-pension-centre


  • MEM62
    MEM62 Posts: 4,746 Forumite
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    pevonia said:
    No I’m not being forced this is my retirement age.  
    So you can keep working if you wish.  I expect it would be worth your while doing so at least to the point where the flat is saleable and you have options    

    pevonia said:
    At the moment the property is in negative as no one will buy. It’s hard to say in 3 years what it will be worth. 
    It would be worth answering Fatbelly's questions, in which case more meaningful advice can be offered. 

    Have you not paid into a private or workplace pension?   
  • kimwp
    kimwp Posts: 1,774 Forumite
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    Where were you planning on living in your original plan of selling the flat to pay off the mortgage?
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • i would suggest you contact Stepchange Financial Solutions Team who are mortgage advisors and will discuss your options with your mortgage.
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