Mortgage ending in April 2024

Anna2924

Hi All,

Really hoping you can help or guide me where I need to go.

My mum is terminal (no date of when). She gets an income from PIP etc on the highest amount she can get.

She owes £42k on her Interest only mortgage which ends in April 2024. Its with Santander.

House is worth approx £225k

She doesn't have that money neither do I.

She want to stay in the house until well you know the inevitable happens

What are our options?

Hoenir

Speak to the lender and explain the situation. They are obliged to operate with a duty of care. 

Anna2924

Thank you thats our next step. Could they force us to sell though?

MWT

Anna2924 said:

Thank you thats our next step. Could they force us to sell though?

Yes, that is possible, they are entitled to do so if they are not paid what is owed on the due date, but they will not want the poor publicity that goes along with the situation you describe.

Do please excuse the somewhat blunt nature of the next point, but it is necessary in the circumstances you describe.

A terminal diagnosis would usually come with some indication of likely time line and that will be important when talking to the lender...

If you are seeking forbearance for a matter of weeks or a a few months at most then it is likely that such a reasonable request would be accommodated.

If it is much more than that then it may not be so easy to reach an agreement...

The lender would have written to her more than once to check she knew the loan was due to be repaid, do you know what she has previously told them her plans were about that?

Another option to consider is that if her diagnosis is not lending itself to the sort of time-line that the lender finds acceptable, it could be possible to look at equity release with improved terms due to the diagnosis, and repay the mortgage that way...

Hoenir

Anna2924 said:

Thank you thats our next step. Could they force us to sell though?

Worth pointing out. Lenders have had to contact borrowers on interest only mortgages asking them how they intending to settle the debt for some time. With a matter of only months to run until the mortgage is due to be redeemed. The lender may require substantive evidence in order to arrive at a decision as to the flexibility they'll allow. 

Anna2924

Thanks so its a brain tumor but its all symptom based they cant give us a timescale. We were told 2 years ago that in 18 months she may start getting significant symptoms but she hasn't. She's also refusing to have another scan. Yeah shes been getting letters but has put her head in the sand. I have LPA and want to make it as less stressful as I can for her

amnblog

I imagine Santander will give Mum some space to continue the mortgage once they understand her situation.

Are you also living in the property? If so, you will need a permanent solution to this issue.

Anna2924

I stay a with her at night. Wondering if my partner and I could get a mortgage for the amount owed?

MWT

Anna2924 said:

I have LPA and want to make it as less stressful as I can for her

Thanks for the added details and sorry to have had to ask.

If it was me I'd be looking seriously at equity release which with a declaration of the medical condition could give access to the sort of funds that would let her clear the mortgage with no payments to be made on an ongoing basis, just interest rolled up.

All of that is of course subject to the property being suitable and of course her age.

That feels like the least stress route as it is not going to be a simple conversation with the current lender given that there is no useable prognosis from what you have said, and no monitoring of the progress of her condition.

If you decide to go down that route I'd start with a conversation with StepChange Financial Solutions as they offer free advice. There are many other advisors available, but the others will tend to have fees ranging from a few hundred to a few thousand.