I understand that many mortgage lenders are in the process of writing to borrowers who are only paying interest on their mortgages and not currently chipping away at the capital.
The letters are asking clients to review their plans on how they intend to repay their capital. Many clients have old endowment policies which may or may not be on target to repay the outstanding mortgage, some will be selling the properties and downsizing, thus using the equity to repay the loan and about 10% of the 2.6 million in question who need to repay their loans before 2043…..well they don’t seem to have a plan at all!
To my knowledge no lender has as yet come out and said what they are actually going to do with clients who have no means to repay the loan at the end of the term, or even published a list of possible options – most have said they will deal with each case on an individual basis.
As I see it, lenders have a number of roads down which to go:
One thing clients must not do is nothing!
I would urge any borrower who is only paying interest to contact their lender and have the conversation about a repayment strategy. Different lenders have very different rules, so I would urge anyone whose existing lender can’t help them not to panic, but to contact an Independent Mortgage Adviser who can look at switching their mortgage to another lender who may be able to make the figures work.
If you have a questions, please email team@mortgagerequired.com or telephone 01628 50747.
14 days ago
Selling up? It’s important to make your house as appealing as possible to potential buyers. Good decorating can help with first impressions, and increase the perceived value of your property.
25 Aug 2023
With the cost of living affecting so many of us, we have made a list of budget-friendly activities and ideas for you.
21 Jul 2023
Moving soon? It's never too early to get organised! Be prepared and avoid unwanted stress by checking out our list of tips to get you ready for moving day.
27 Jun 2023
Inflation simply put, is the increase in the price of something over time. The Office for National Statistics (ONS) tracks the prices of hundreds of everyday items and these items are updated to reflect shopping trends.
20 Jun 2023
We are often asked if it's good advice to consolidate “unsecured” debt (credit cards and loans etc) into your mortgage, the answer is, sometimes.
16 Jun 2023
When you’re looking to buy a home, and you own a car, you ideally want to know the rules on parking in the area. Parking rules can be confusing, even for the most experienced of drivers! This is why we have written this blog to help you.
6 Jun 2023
There are several potential sources you can consider when it comes to getting together a deposit to buy a property. Providing proof of the source of your deposit is a key requirement in the application process and will need to be given to both the lender and the solicitor.