interest only mortgage or stay with capital and interest

ruthb1

Hi,

we are really struggelling at the moment finacially, we have a mortgage of £1300.00 per month two kids bills to pay and holiday to pay for by the end of feb i am in a right state at the moment worrying about this and where i am going to get the money from . I havent got a good credit history either. so the thought of applying for a loan or credit card is out of the window. I was wondering would you advise getting an interest only mortgage for a short term just while we get out of this situation to reduce the monthly payments , my wages are due to increase soon as i have increased my hours due to needing more money. Dio you know whether i would be penalised by the B/s for this havent got a clue sorry, i havent defaulted on the mortgage thats a bonus . any advice would be greatly appreciated.


thanks


ruth

wardlaw

Hi Ruth

If you are struggling financially, there is nothing wrong in switching from capital and interest to interest only ,, in the short term. as its a means by which you could manage your mortgage more easily,reduce the financial worry which you can do withiout especially as you have 2 lovely children to look after, and ultimately keep a roof over your head

You dont have to realise that in an interest only mortgage you dont repay any capital However, you do mention the fact that you are expecting a pay rise in the future which might compensate for the financial problems at present and hopefully enable to switch back to an capital and interest mortgage You could however, if you still find it a struggle ,to partly switch your mortgage to capital and interest and interest only. The actual percentage split, can be any amount depending what you are comfortable with

In addition, try and get your present lender to give you a better rate of interest, or consider rew-mortgaging to another lender via an independent moprtgage broker who charges no fees, assuming you do not have any redemption penalties, that is

With regard to swiching to Interest Only, your lender will not penalise you as such, but they will probably charge an Administration charge, which you can find within their "Tariff" brochure You might be able to find it on line via their web site


I hope this is of assistance

John Wardlaw
Independent Mortgage Broker
Business Development Manager

ruthb1

thanks john,

another question, can your lender refuse this at any time?

wardlaw

Hi There

In reality they can, however they are bound by the FSA rules to treat their customers fairly TCF with regard to all situations, including yours TCF is actually a major issue and some brokers and mortgage networks at present,
They have had the FSA around as they have not paid proper attention to to TCF requirements I have been taught to treat customers fairly amongst another 100 things !!!

John

ruthb1

So what do you suggest i say to them , just that i want to change my mortgage to interest only and will then they ask me why i want to do this, should i say that it is becuase i am struggelling financially etc, also would they put a time limit on it or is that up to me to ask for


thanks


ruth

jonesMUFCforever

ruthb1 wrote: »

Hi,

we are really struggelling at the moment finacially, we have a mortgage of £1300.00 per month two kids bills to pay and holiday to pay for by the end of feb i am in a right state at the moment worrying about this and where i am going to get the money from . I havent got a good credit history either. so the thought of applying for a loan or credit card is out of the window. I was wondering would you advise getting an interest only mortgage for a short term just while we get out of this situation to reduce the monthly payments , my wages are due to increase soon as i have increased my hours due to needing more money. Dio you know whether i would be penalised by the B/s for this havent got a clue sorry, i havent defaulted on the mortgage thats a bonus . any advice would be greatly appreciated.


thanks


ruth

Have I missed something here but you say that you are struggling but you have an outstanding bill for a holiday!
Sorry if I sound cruel but the mess is of your own doing.

chappers

think she means a payment holiday on her mortgage

ruthb1

well, the holiday was booked last year, and its a family holiday that we havent had in 3 years as my partner has been seriously ill, yes it is of my own doing, but i am just trying to provide a bit of normailty for my family is that so terrible. i know it is the wrong thing to do now in hinsight but i do not want to let my kids down as they are so lookingmforward to it. yes i could cancell it but i have already paid £1000 and to loose that amount of money seems silly. i know we do these stupid things and i know in the long term i am the one who is going to pay for this , i just wanted a little bit of advice thanks anyway

poet123

Could you not take a mortgage payment holiday? our provider allows up to 12 months,which at 1300 pcm would I assume make a big difference.

jonesMUFCforever

ruthb1 wrote: »

well, the holiday was booked last year, and its a family holiday that we havent had in 3 years as my partner has been seriously ill, yes it is of my own doing, but i am just trying to provide a bit of normailty for my family is that so terrible. i know it is the wrong thing to do now in hinsight but i do not want to let my kids down as they are so lookingmforward to it. yes i could cancell it but i have already paid £1000 and to loose that amount of money seems silly. i know we do these stupid things and i know in the long term i am the one who is going to pay for this , i just wanted a little bit of advice thanks anyway

Sorry but this changes nothing.

You didn't have the money then you don't have it now - changing to an interest only loan is a soft option.
You will soon become accustomed to paying the lower monthly repayment and it will soon be forgotten to start capital repayments again - because something else will always crop up - it always does - its called life.

jonesMUFCforever

chappers wrote: »

think she means a payment holiday on her mortgage

Oh no she doesn't :rotfl: