Halifax refuse to extend Interest-Only to Enable House Sale and avoid Mortgage Arrears

Pesman66

Having suffered my second stroke in 2 years, I have been unable to work for 8 months and am in the process of having to make some stark financial family decisions. The biggest is that we are selling our house in order to settle our Halifax Mortgage and release sufficient equity to downsize and live mortgage free. 
I
n the meantime, I wanted to ensure I did not go into arrears on the mortgage /9a 10yr fixed @4.9%) whilst desperately trying to manage the impact on my income.
When I called the Halifax in June 2024, I expected some sympathy and help with my situation and my proactive attempt to clear the mortgage. Instead I was told that no options existed (I had asked to go interest only until the house sold) and that I would have to go into arrears before they could consider anything. Proactive planning was not an option.

Despite receiving no help from the Halifax, we put the house on the market and lived off savings for 3 months - making full mortgage payments - whilst I focused on recovering. Fortunately, I was then able to utilise  the Government's "cost of living charter" which forced the Halifax to offer me a 6 months interest-only mortgage option. The intent being to have sold the house and cleared the mortgage before the interest only window ran out.

Unfortunately, our house sale collapsed just before Christmas and we are now back on the market again. Today, we received a letter from Halifax advising that my interest only period was up  and that I would now have to make full payments from 12 February. Ironically they also stated that "If you're worried about being able to afford your new monthly payments, please get in touch".

Obviously, this applied so I rang, explained my situation again and asked if I could remain on interest free until the house was sold. The advisor was helpful and sympathetic but unable to help. She advised that until I had gone into arrears, no options existed and that her hands were tied even though she "fully understood" why I wanted to go avoid going into arrears.

How is this customer-focused?
- I accept I cannot keep my house
- I have a means to repay the mortgage
- I have suffered an unpredicted and life-changing health event
- I have kept up all payments - despite using all my savings and borrowing from family
- I require some logical help that will not leave Halifax out of pocket
- arrears will ruin my credit history, even if a 'plan' is agreed

Why should I have to go into arrears and have my credit record ruined, when it can be avoided? Tellingly, the advisor was frustrated enough to open a complaint for me in the hope someone might see sense and allow the extension. It is very frustrating that, when you have accepted that you will lose your home, and you ask for some help from a Bank you get nothing - unless the government forces them to be helpful. 

BoGoF

Have you explored tbe possibility of a payment holiday?

ACG

Even if they agree to interest only, it will still affect your credit report. You are still making changes to your contract.
The problem is that people say they need interest only when they dont, they also come up with all sorts of lies - I say this as when I worked for a bank, I seen it first hand. 

Pay what you can afford to pay - it does not have to be full/interest only/nothing - it might be something else. Pay what you can. If you pay £90 a month for example and your repayments are £100 a month, it would take you 10 months before you hit 2 months in arrears. Your credit report would show as a status 1 month after month. 

Once you go into arrears, have a conversation with them. 

Having had 2 strokes, I know it easier said than done but stop worrying about it. You have equity in your house to buy for cash by the sounds of it. Your credit report will repair itself in time, your health is far more important. They will give you plenty of time if you speak to them, explain what is happening and what your plan is. But as they have said, they will only do it once they know for sure you have exhausted other options to the point where you have to go into arrears. 

MWT

Pesman66 said:

Why should I have to go into arrears and have my credit record ruined, when it can be avoided?

ACG is 100% right, you are fighting the wrong battle, you need to give up the idea that there is a plan that doesn't involve an impact on your credit history, that part is inevitable at the moment.

Your credit history will repair itself in time and that will not impact on your plan to be mortgage free with a cash purchase.

Creating your own stress right now is the last thing you need...

Pesman66

Thanks for the above. My current plan is that I will aim to pay the interest for as long as I can but with minimal interest in the house, it's looking pretty grim. If I give up worrying about the credit rating then I guess it becomes more straightforward....

Hoenir

Lender's don't have the resources to micro manage delinquent accounts.  Don't take their approach personally. Ultimately it's business. They need to ensure that you do go ahead with selling the property as soon as possible. Rather than provide endless excuses to create a stay of execution. 

Credit history can be rebuilt with time. Not the end of the world by any means.