Investment Vehicle - Halifax I/O mortgage...

RubyShoes

Hi all,

Does anyone know how to solve the problem of needing an investment vehicle for a halifax interest only mortgage?

I intend to pay I/O for the next 3 years, before switching to a repayment mortgage.

I am in a position where I need to buy now for stability for my child, however I would like to go I/O to give me a break. I have worked 6 days a week for 3 years now, and would like to go I/O to allow me breathing space, and work 5 days- and then overpay on the mortgage wherever I can.

I will be in a much better position in 3 years, as my income will definately rise (I am a midwife) by a considerable amount to what it is now.

So, therefore I don't wish to have an investment vehicle in place, as I intend to overpay, and switch to a repayment.

What can/should I do to get around this problem?

Thanks,

Ruby x

dunstonh

So, therefore I don't wish to have an investment vehicle in place, as I intend to overpay, and switch to a repayment.

Lenders have been told to lend responsibly and allowing an interest only mortgage with no repayment vehicle is irresponsible.

Halifax appear to have taken the view that if you cannot afford the repayment mortgage now then you cannot use the interest only option as an excuse. Probably as the country is full of people who intend to go repayment at some point but havent or never did and are going to be in trouble later and will no doubt complain that the bank shouldnt have sold them the mortgage in the first place. And before you say you wouldnt do that, the FOS already gets complaints of that nature and in some cases they have been upheld.

Not all lenders insist on a repayment vehicle. So look at a lender that doesnt if you really think you are doing the right thing.

Dan_Collins_2

Take out an ISA and use it as a savings account, try to pay as much in to it as pos and use this as a repayment vehicle.

RubyShoes

Dunstonh - Unfortunately - Halifax are the best lender for me, all circumstances considered. I do need to go with them...

Maybe I will have to take an investment vehicle out... I would if it was essential... but I'd rather not right now.

I can afford a repayment, however I want the flexibility an I/O offers me right now.

Dan - I will look into an ISA option. Do you have any idea what the Halifax will want to see in terms of evidence? Do they need to see regular deposits? Do I have to make regular deposits? Or could I put £1000 once a year in... Will definately look into it.

SpendCurber

I have the exact same question so saw no sense starting a whole new thread!

I am torn between - upping my pensions contributions until I switch to repayment (1 1/2 yrs time) or making deposits into my ISA.

If I chose the ISA route, will they check regularly to make sure I'm still doing this? Will they withdraw my mortgage if I stop?

I've had a look on the internet and I cant really find much information/advice. Halifax have said they cant advise me (for obvious reasons) Please help! I need to confirm my method before getting my full mortgage offer.

Thanks in advance.