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    • Abi0301
    • By Abi0301 20th May 19, 10:26 PM
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    Abi0301
    Helping parent avoid losing house at the end of Interest Only mortgage
    • #1
    • 20th May 19, 10:26 PM
    Helping parent avoid losing house at the end of Interest Only mortgage 20th May 19 at 10:26 PM
    Hi everyone,

    I wondered if anyone can help me as we are really starting to pull our hair out. I am searching for help/answers to help my mum. Her Interest only mortgage is ending in a couple of months and as my dad passed away last year she is in a position where her income alone won't allow her to apply for another interest-only mortgage.

    I have offered to go on a new mortgage and help her apply however after speaking with a mortgage broker we have been told that even with me on the mortgage because I have my own financial responsibilities such as rent and a credit card that it wouldn't raise enough. My husband has also said he will go on the mortgage if need be but without both of us living in the house, the mortgage broker said that it is unlikely we will get a mortgage without us both living there.

    With a repayment mortgage, the payments are coming in at 1500 a month which my mum would not be able to repay and which is over 3 times what she currently pays. She has an amazing credit score and has never missed a payment. She has just been left in a situation since my dad's death where she can't get a mortgage alone to cover the repayment of the original loan.

    Has anyone been through a similar situation or can point us in the right direction. My mum's house is currently up for sale and we are hoping that it will sell in the next couple of months but if it doesn't we want to avoid her losing her house and the equity that she has in it.

    ADD: House is worth just above £400k and mortgage owed is £226k. My mum is 57
    Last edited by Abi0301; 20-05-2019 at 10:36 PM. Reason: Add info
Page 1
    • Ms Chocaholic
    • By Ms Chocaholic 20th May 19, 10:30 PM
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    Ms Chocaholic
    • #2
    • 20th May 19, 10:30 PM
    • #2
    • 20th May 19, 10:30 PM
    How much is owing on the mortgage and how much is the house worth?
    Thrifty Till 50 Then Spend Till The End

    You can please some of the people some of the time, all of the people some of the time, some of the people all of the time but you can never please all of the people all of the time
    • Abi0301
    • By Abi0301 20th May 19, 10:31 PM
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    Abi0301
    • #3
    • 20th May 19, 10:31 PM
    • #3
    • 20th May 19, 10:31 PM
    House is work £400k and £226k left on the mortgage.
    • Ms Chocaholic
    • By Ms Chocaholic 20th May 19, 10:32 PM
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    Ms Chocaholic
    • #4
    • 20th May 19, 10:32 PM
    • #4
    • 20th May 19, 10:32 PM
    How old is your mum?
    Did your dad not have any life insurance?
    Thrifty Till 50 Then Spend Till The End

    You can please some of the people some of the time, all of the people some of the time, some of the people all of the time but you can never please all of the people all of the time
    • Abi0301
    • By Abi0301 20th May 19, 10:33 PM
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    Abi0301
    • #5
    • 20th May 19, 10:33 PM
    • #5
    • 20th May 19, 10:33 PM
    Mum is 57 and no he didn't unfortunately.
    • elsien
    • By elsien 20th May 19, 10:39 PM
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    elsien
    • #6
    • 20th May 19, 10:39 PM
    • #6
    • 20th May 19, 10:39 PM
    What was the original plan for repaying the amount owing at the end of the mortgage period? Did they set anything up at all?

    It's not about the credit score - any new lender will be wanting to know how the outstanding amounts will be paid off which is why the interest only at her age is probably a non-starter.
    What term have you been looking at doing the mortgage over?
    Last edited by elsien; 20-05-2019 at 10:42 PM.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • Abi0301
    • By Abi0301 20th May 19, 10:40 PM
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    Abi0301
    • #7
    • 20th May 19, 10:40 PM
    • #7
    • 20th May 19, 10:40 PM
    When they originally got that mortgage the plan was always to sell the house however with my dad dying unexpectedly over a year ago, selling the house was the last thing we were focused on at that time. The house is now on the market but I am just trying to get as much information as possible.

    I am currently looking into different types of mortgages such as buy to rent ect that perhaps my husband and I could take out. Unfortunately, it would be our first mortgage meaning that we would lose our first-time buyers perks but at this point, I want to do what I can to help my mum.
    • Kentish Dave
    • By Kentish Dave 20th May 19, 10:54 PM
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    Kentish Dave
    • #8
    • 20th May 19, 10:54 PM
    • #8
    • 20th May 19, 10:54 PM
    If you would still be happy to sell but just need more time to do it sensibly then speak to the bank, explain the situation, including the bereavement, and ask for an extension.

    Itís an awful lot of money for you to borrow to keep things as they are, and if the plan was always to move is that not still the best option? Banks will tend to try to be understanding in situations like this, and they are definitely not about to start legal proceedings immediately the term ends, but itís always better to talk to them ahead of time.
    • AnotherJoe
    • By AnotherJoe 21st May 19, 7:17 AM
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    AnotherJoe
    • #9
    • 21st May 19, 7:17 AM
    • #9
    • 21st May 19, 7:17 AM
    They won't kick your mum out the day after the term ends. Let the lender know the house is for sale (I imagine they will already have corresponded with your mother about the ending of the mortgage) and proceed with the original plan, to sell the house.
    I am slightly confused at the mixed messages in the title and text, you say you don't want her to lose the house but it's up for sale and that was always the intent ?
    Your mum can move into rented or downsize into something smaller, it may be harsh to say but don't let the financial decisions she and her husband took quite knowingly years back - no life insurance, io mortgage with no plan to repay other than sell, derail you and mess up your financial Future.
    They were effectively renting cheaply for a long time and in the meantime accumulated the equity in the house as houses prices rose. So she's still done better than renting, when she wouldn't even have the equity.
    Last edited by AnotherJoe; 21-05-2019 at 7:19 AM.
    • ACG
    • By ACG 21st May 19, 7:37 AM
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    ACG
    Could mum not take the circa £175k and get a small mortgage and use that to buy something on a repayment mortgage?

    There will obviously be significant sacrifices but £200k would buy something half decent in most of the country even if it is maybe a flat.

    She could potentially do equity release. Some of those allow you to pay the interest each month so indirectly work like an interest only mortgage.

    You could ask the lender for a 12 month extension and explain what has happened recently to them?

    Maybe also try another broker. One broker saying something is not possible does not mean it is not possible. I do not know what all brokers are like at the minute but we are snowed under. This would be one of those cases that needs a lot of work and speaking to manual underwriting lenders, it could be if the broker was busy he/she was not prepared to put the time in to make it work. There were some recent announcements by the FCA regarding mortgage prisoners and lenders now being allowed to use your past to help with a future mortgage, but it was very recent and has probably not filtered through yet. If you can get 12 months, there may be some announcements from lenders.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • dunstonh
    • By dunstonh 21st May 19, 7:57 AM
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    dunstonh
    She is old enough to be in the range of some equity release lenders. That way she can keep the house
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • foxy-stoat
    • By foxy-stoat 21st May 19, 8:16 AM
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    foxy-stoat
    Just sell it and buy somewhere cheaper.
    • AnotherJoe
    • By AnotherJoe 21st May 19, 8:59 AM
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    AnotherJoe
    She is old enough to be in the range of some equity release lenders. That way she can keep the house
    Originally posted by dunstonh

    Possibly an option but does she need to be in what presumably was teh original larger family house, with all the maintenance demands on it, now shes single?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • MEM62
    • By MEM62 21st May 19, 9:46 AM
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    MEM62
    OP, Do you live and work in the same area? If so is living with you mum something that everyone could live with? If that is possible then perhaps you can enter into joint ownership with your mother.
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