Switching to interest-only advice needed

finessejoe

Hi Peeps,
am going through a tough patch.
Have already taken in 2 lodgers and am considering switching my mortgage (only a year old) to interest-only. I know this isn't ideal, but I would hoping to switch back to repayment as soon as poss.

I'm one of those "sub-prime" people!!!
Self-employed, self-certified, skint etc etc
We're gonna have to sit this credit-crunch out as we have no other option...
so just trying to tighten our belts and reduce outgoings as far as possible..

My mortgage is with Mortgage Express (Bradford & Bingley I think??)...
As I have never had any contact with them before (apart from my monthly £1200 direct debit!!!) I was looking for advice on how to go about requesting a change to interest-only. (if they'll let me!!???)

Shall I write a letter or call??
Any advice of any type would be greatly appreciated.

nspnick

I'd give them a call. They may want to see some kind of repayment in place rather than jsut interest only. Also they may be a bit busy today with all teh Bradford and Bingley stuff going on.

kate705

hi,
good luck to you, i have considered this myself but would do it as a last resort. Do you ever go on the DFW board? Have you tried saving money instead of changing the mortgage? The people over on DFW are really good at advice and cutting back, the consensus seems to be not to go interest only if at all possible. Why don't you go on that board for help...

kate x

debtuptoeyeballs

Hi there
I have an interest-only mortgage and my repayment vehicle is sale of house, as opposed to an ISA or endowment etc. This is 1 of the valid options for Standard Life anyway - I don't know anything about Mortgage Express. Or you could set up an ISA if this is necessary to allow you to switch to IO.
Hope you find a solution

poppy10_2

debtuptoeyeballs wrote: »

Hi there
I have an interest-only mortgage and my repayment vehicle is sale of house

Isn't that just renting then?

stuart30

poppy10 wrote: »

Isn't that just renting then?

No with renting you dont get the chance of a nice big fat cheque when you do sell.:D

firesidemaid

with 2 lodgers i am assuming that at least half your mortgage is covered by them - so you have already halved your payment.

has your income decreased recently or do you have other debts to service? ie. why do you now want to reduce your mortgage payments?

can you reduce your outgoings or increase your income instead?

also, depending on how many years your mortgage is over, moving to IO might not knock that much off your payments.

also, whilst you are paying off some capital each month, your interest payments will actually be coming down every month - and therefore more capital is paid off leading to lower interest etc etc. it is one of those 'good' viscious circles!

beingjdc

stuart30 wrote: »

No with renting you dont get the chance of a nice big fat cheque when you do sell.:D

So it's renting and gambling, fair play.

debtuptoeyeballs

beingjdc wrote: »

So it's renting and gambling, fair play.

Well...yes, it is renting - from myself - but I bought at a good enough time and I have no intention of moving for at least 5yrs, if ever. Sometimes interest-only is the best option for people, even if only for a few years. Would certainly be gambling in the short term

finessejoe

Thanks guys :T

From all your replies and from what i've read elsewhere,
I'm coming to the conclusion I should not go to IO.

I think I should save switching to IO for a rainy day
ie. when my interest goes through the roof at the end of my fixed term next year

Think I'm going to keep trying to tighten the belt on my expenditure,
having just done a spreadsheet have identified plenty of ways -
(about £800 worth actually!!)