Walking away from my home 1 February at 3:16AM in Bankruptcy & living with it 8 replies 974 views

pevonia

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.

fatbelly

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

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. 

fatbelly

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

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

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

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

Where were you planning on living in your original plan of selling the flat to pay off the mortgage?

ToxtethO'Grady

i would suggest you contact Stepchange Financial Solutions Team who are mortgage advisors and will discuss your options with your mortgage.