Mortgage term ending

TeacherPmaths

Dear all,

I am not sure where to start! I am trying to help my parents concerning their mortgage. Please no judgement as I do not think my parents are particularly finally savvy hence the mess that they are currently in.

My mum is in her 60s and my dad in his 70s. Their mortgage term has ended this month, but they are not in the position to pay off the remaining 130,000 balance left on the account. It is not possible for either myself or my siblings to take over the mortgage, therefore I think that they are going to have to sell the property. How much time do we have in order to organise the selling of the property?

Also, I would like to do some investigating as my parents bought their property in the 1980s for 30,000 and assure me that they have never remortgaged or taken out a loan against the property. So I am baffled as to how there is so much owing on the account. Admittedly, they have been on interest only for about 10 years. They have also previously defaulted on their payments which has resulted in their mortgage being transferred to 3 different providers over the last 30+ years. They are currently with Engage Credit.

Any advice of how to help them would be much appreciated.

Thanks in advance.

Hoenir

TeacherPmaths said:

 How much time do we have in order to organise the selling of the property?

Mortgage lenders operate under a duty of care. Best suggestion is to open and maintain a transparent dialogue. As the lender is within their contractual rights to impose charges and penalties on delinquent accounts. 

Your parents probably feel recitent in explaining financial events of the past. Reached the stage of what will be will be. 

pramsay13

What was the plan to pay off the balance at the end of the term?
Where will they stay if they sell this house?
Have the mortgage company given you options?

BarelySentientAI

TeacherPmaths said:

So I am baffled as to how there is so much owing on the account. Admittedly, they have been on interest only for about 10 years. They have also previously defaulted on their payments which has resulted in their mortgage being transferred to 3 different providers over the last 30+ years.

That would probably explain quite a bit of it.

TeacherPmaths said:

Any advice of how to help them would be much appreciated.

Speak to the lender.  They don't really want the hassle of dealing with repossession and losing money on a rapid sale if you're actively working on it - but of course that goodwill can run out if it looks like you're not making progress (deliberately or otherwise).

MWT

How much do you think the property is currently worth?

TeacherPmaths

pramsay13 said:

What was the plan to pay off the balance at the end of the term?
Where will they stay if they sell this house?
Have the mortgage company given you options?

The trouble is, I don't know how they managed to supposedly owe more than they borrowed. The property will sell for 400,000 to 450,000 so that will pay off the debt. You are correct that we are still investigating where is affordable for my parents to move to (they are currently in London). I am trying to convince them to move to Spain to be closer to me!

The mortgage company have only suggested that a family member takes over the debt, this is not an option for us at present.

TeacherPmaths

MWT said:

How much do you think the property is currently worth?

The property will sell for 400,000 to 450,000 so that will pay off the debt. 

MWT

TeacherPmaths said:

MWT said:

How much do you think the property is currently worth?

The property will sell for 400,000 to 450,000 so that will pay off the debt. 

With that sort of valuation they should be able to downsize and clear the debt as you say.

They will also have options to clear or at least come close to clearing the debt with options like equity release, but I would strongly suggest that they look seriously at down-sizing for the answer.

If they have only just reached the end of the mortgage term then as long as they keep the lender informed about the progress of their sale they are likely to get a decent period of time to get it sold without too many issues. 

The mistake would be to bury their heads in the sand, ignore the lenders letters and not get on with the sale...

 

Newbie_John

Only mortgage company will know.
Over the past 30 years even small fees, missed payments could have added up..

MWT

TeacherPmaths said:

Also, I would like to do some investigating as my parents bought their property in the 1980s for 30,000 and assure me that they have never remortgaged or taken out a loan against the property. So I am baffled as to how there is so much owing on the account. Admittedly, they have been on interest only for about 10 years. They have also previously defaulted on their payments which has resulted in their mortgage being transferred to 3 different providers over the last 30+ years. They are currently with Engage Credit.

Certainly worth digging into the history and if they have kept the annual statements it shouldn't be hard to discover what has happened...

dunstonh

How much time do we have in order to organise the selling of the property?

They must stay engaged with the lender otherwise the lender will push for repossession earlier rather than later.  If the lender knows the property is up for sale, they will usually give utpo 12 months.

Also, I would like to do some investigating as my parents bought their property in the 1980s for 30,000 and assure me that they have never remortgaged or taken out a loan against the property.

I have seen people say that before out of embarrassment.    On a few occasions, the husband did it without the wife knowing and couldn't admit it in front the rest of the family.   Some just plain forgot.

Also, realistically, mortgages in the 80s didn't exceed 25 years.  So, it would have ended a decade or more ago if they hadn't changed the mortgage terms.

They have also previously defaulted on their payments which has resulted in their mortgage being transferred to 3 different providers over the last 30+ years. They are currently with Engage Credit.

Sounds like they either borrowed more or extended the term or both each time they moved.   Defaults would push the debt up.