Pensioner's interest only mortgage term ending with outstanding balance

Keep_pedalling

I think the best bet is to speak to a mortgage broker. 

mjm3346

Once the term has ended if there is any amount outstanding I would expect a big rise in charges for the unauthorised borrowing so it wouldn't necessarily be in their interest to go for a quick repossession.

ACG

mjm3346 said:

Once the term has ended if there is any amount outstanding I would expect a big rise in charges for the unauthorised borrowing so it wouldn't necessarily be in their interest to go for a quick repossession.

Will there? 
Normally mortgage lenders just allow it to carry on and dont add fees so long as an acceptable payment plan is put in place. 

ACG

MWT said:

ACG said:

Chances are an equity release/lifetime mortgage would need to raise enough for SMI + £19k. 

That is my understanding as well, both would have to be cleared at the same time as the Equity Release was taken.

Should be some cheaper routes to get it than '£1800 for a valuation' ...

There will be costs involved for the advice but that can usually come out of the amount released, I certainly wouldn't proceed with anyone asking for that sort of money up front. 

The other thing to keep in mind is that while they are unlikely to succeed with a repossession, there can be legal costs added to the loan and of course a higher interest rate once they are in default at the end of the term, so it may still be in their best interest to figure out a way to resolve this sooner rather than later.

This assumes the FCA rejects the complaint. I really dont see that happening. 
If the FCA agree the customer is making a reasonable attempt to clear the balance then the judgement would be in the favour of the customer (I think, I wouldnt want to bet my house on it though). At which point it becomes legally binding on the lender, so no legal costs would be added. 

MWT

ACG said:

MWT said:

ACG said:

Chances are an equity release/lifetime mortgage would need to raise enough for SMI + £19k. 

That is my understanding as well, both would have to be cleared at the same time as the Equity Release was taken.

Should be some cheaper routes to get it than '£1800 for a valuation' ...

There will be costs involved for the advice but that can usually come out of the amount released, I certainly wouldn't proceed with anyone asking for that sort of money up front. 

The other thing to keep in mind is that while they are unlikely to succeed with a repossession, there can be legal costs added to the loan and of course a higher interest rate once they are in default at the end of the term, so it may still be in their best interest to figure out a way to resolve this sooner rather than later.

This assumes the FCA rejects the complaint. I really dont see that happening. 
If the FCA agree the customer is making a reasonable attempt to clear the balance then the judgement would be in the favour of the customer (I think, I wouldnt want to bet my house on it though). At which point it becomes legally binding on the lender, so no legal costs would be added. 

That is certainly possible, but either way, the interest rate is still likely to increase even if they manage to avoid legal fees...

ACG

Possibly. But one of the TCF outcomes is no unreasonable post sale barriers... Forcing someone on SVR if you can offer  lower rate might be deemed a barrier? 
Also £18k over 3 years at 4% is £530 pm. At 7% its only £20pm more, so not too much extra.