RIO mortgage

interest_only123

Posted on another thread and some suggested a RIO mortgage broker may be able to advise.....

Hi. Mum & Dad moved 'north' a little while ago and an exploring moving back down 'south'. Unfortunately, they need about £70k. Suprisingly, despite approaching their 80s, they can get a £40k mortgage over 10 years. They are, therefore, £30k short. We are not really in a position to help them.

They are against equity release.

I was thinking of an interest only mortgage? But wanted a bit of advice before suggesting it if possible.

My thinking is,...

- they are not taking any equity out of the property (they're probably keeping it about the same considering the ncreased house price minus mortgage)

- their repayments on interest only mortgage would be less than the £40k on a repayment mortgage allowing them to save something towards the capital repayment at the end of the term.

Questions arise like...

- What is the qualifying criteria for an interest only mortgage at their age?

- Given they qualify for a £40k repayment mortgage, would they qualify for a £70k interest only mortgage?

- they could save money over the 10 years to pay back the majority (possibly not all) of the capital but what happens if they don't have all if the capital to pay off the mortgage after 10 years?

Thanks

MSE_ForumTeam5

Please can we continue this in the original thread?