Support for Mortgage Interest and lifetime mortgage/equity release

sambda

I am getting no consistent advice re: my situation with SMI and remortgaging.

I currently have an interest-only mortgage which becomes due next year.  I am currently on JSA and will not be able to pay back the capital.  So, I am taking out a lifetime mortgage with roll-on interest. This will allow me to pay off the first mortgage from the equity release.  I have no dependants, so don't care if I have nothing to leave when I die.

Now, can I move my existing SMI balance to the new mortgage?  Some places say yes, some say no, some make a distinction between JSA and UC in this regard.  I know the SMI will keep attracting interest (there won't be any new SMI on the new mortage as it has no month-to-month payable interest) but I won't need to pay it off unless I move (which I don't intend to) and it seems silly to pay the £7000 back if I don't have to.

huckster

I think you need to get in touch with contact number noted on the SMI agreement you took out.  

I don't think you can move existing SMI balance to new mortgage. But I could not point you to any information which supports this. 

Yamor

What do you mean by "move my existing SMI balance to the new mortgage"?

The SMI is not part of the existing mortgage, nor will it be added to any new mortgage.

It is a separate charge taken out on the property, and that charge would remain even following your remortgage.

huckster

I think they mean that the SMI had the current mortgage companies details and SMI were paying current mortgage company. Therefore as they will not be having SMI payments made to new mortgage company in this case, there is a balance still owing with interest still being added.

The question therefore is whether the SMI would have to come to an end as it is no longer paying any mortgage company and the amount becomes due.

 Or whether SMI are simply told that the mortgage the SMI is based on has come to an end but property not being sold, therefore SMI just stop payment to mortgage company and just update the SMI records. And the balance plus interest remains outstanding until property sold. 

Which is why I have said they need to contact SMI to check the actions that are required, as the SMI team will want to ensure that they complete all the necessary actions.

Doggyalua

  Can I take equity out of an interest only mortgage to do house repairs 

sheramber

Doggyalua said:

  Can I take equity out of an interest only mortgage to do house repairs 

Start your own thread as it gets confusing when you tag on somebody else’s