Hello CAG

Please give me some help and advice.

My interest only mortgage will end next month .

I have asked for a five year extension.

I have been discussing this with my mortgage provider and it does not look good.

I am pretty nervous and anxious.

I am not quite sure how to go about negotiating with them.

As its interest only they want the entire loan back.

Due to illnesses over the last 10 years my plans to save to repay the mortgage at the end of term went out of the window.

then went into arrears and it was touch and go for a year.

I was able to make regular payments and caught up on my arrears.

I was then able to make over payments which totted up to a small but a pretty good amount.

But its like – that’s all academic now

The lender now wants the full mortgage back, which is impossible for me.

I have a small amount of lump sum but not a serious amount.

This is where I need help and advice.

1. I can provide proof of income but the income in itself is not great.

However its enough to enable me to meet the payments regularly and my outgoings are low.

2. The lender wants SA103 for the last three years from HMRC.

I am arranging this.

I am unsure how these documents will look and how the lender would use them to assess my capability to make repayments.

3. My intention is to take on a repayment mortgage for say another 5 years and then sell my property. I do not wish to sell it now

4. I can increase my repayments by taking on a tenant.

(I can go really crazy by taking on more tenants but i do not know how the lender will react to this)

5. Will I be assessed as a new client or will they take my past good record into account.?

6. During my illness I took on a loan and picked up a CCJ and as a result, a second charge on my property which is still on my record. I am assuming that this will have an adverse effect on my application for an extension.

i shall be most grateful for any advice on how to deal with this other then sell up and move on

thank you very much

Burmafriday

Thread moved to the appropriate forum.

Regards

Andy

Regards

Andy

mortgage extending arrears and respossession.pdf

Hi

sorry the form the lender wants is SA302

not 103.

best/BF

Hi Andy

thanks so much

yes i was already there and have been sifting thru reams of HMRC forms and guidelines

the last few days......

its pretty simple for me as i do not have complicated or big income. my condition does not enable me to

do long hours and work like a nutter like i did before. i can just do enough to pay bills.

i was finding it really difficult to complete the forms and how to make correct deductions

but now the coin seemed to hv dropped and i appear to hv sorted that issue.

the key thing is the lender will want to see "affordability." thats the issue

i do not know if my tax returns will show affordability

i do not have an accountant or know anyone who can help in that regard.

clearly i can afford the re-payments as i have been paying them throughout the period.

this is what i now propose to do :

1. a financial statement for each year for the last 3 years to accompany the tax returns

2. a forecast for the next year showing a higher repayment per month

to include interest + Principal.

3. I can try and carry out a forecast for the next to more years.

One good thing - I had a chat with my daughter and she said she will contribute .

Now, that will really help. But the thing is i do not know if i should mention it because

i do not want the lender to force them to sign any paperwork.

and of course, if i can get a tenant that would really improve my ability to repay more.

again, i do not know if i should mention this.,

Does CAG have any guides regarding mortgages and "affordability"?

Does CAG, have any sample formats of proposals for lenders concerning repayments?

All the best/BF

It would be unwise to bring your Daughter into this or mention her to your Mortgage provider.

In the upload I have provided it explains that mortgages should be extended to suit its customers needs..up to a max of 7 years.

Being an existing customer and having maintained payments for 24 years and 11 months should be taken into consideration.

Andy

Dear Andy

thanks for your message.

sorry for my late response - i picked up some new chunk of work which kept me seriously busy.

i appreciate your advice regarding keeping my daughter out. i shall do that.

yes i have gone through the doc in the upload and i checked it a few times.

The doc does not cover my situation much because mine is interest only.

(BTW - I took it out for 10 years) it mentioned that the lenders grant a six year

period as a buffer for repayment if they carry out a possession.

Theres no mention of the lender extending the mortgage for up to seven years.

Has this sort of facility have been granted to your knowledge?

i went on the Money Advice site and carried out a mortgage affordability check using

their calculator ... suffice it to say - i failed miserably.

having been on that site, i do not think my ideas in my earlier post #6 will work.

In the meantime I am chasing HMRC still for a UTR as it has not arrived yet.

my only "credits/plus points" so far are

a. i only defaulted and feel behind when i was extremely ill.

b. i then not only caught up my arrears but made significant over payment on the interest

c. since i caught up my arrears, i have never defaulted again

and i have been overpaying for the last 3 years.

( when i used the figures of the last year in the mortgage affordability calculator, it should i could not afford it !!!)

so i am seriously stuck as to how i can negotiate with the lender to give me an extension and change the

type of mortgage to a repayment.

i can clearly pay more than the interest only amount as i have done so for the last 3 years.

is there any advice or guidance you or any one on CAG can give me on how i can approach my lender?

look forward to hearing from you

all the best/BF

you can earn up to £7500 from having a lodger (not a tenant, they are different). You are supposed to tell the mortgage co about this but as the law regarding lodgers is very different they cant really refuse, unlike subletting.

hi Ericsbrother

thank you for this information. thats really useful.

Based on your advice i checked this out and its very do-able and possible.

In the meantime, my dilemma is how to present this to my lender so that they will be agreeable to

1. extend the mortgage

2. change to repayment

3. allow lodger

any help and assistance you can give me in this will be gratefully received.

i think i know what to do but just seem to be missing some direction. I guess I just need a bit of re-assurance.

all the best/BF

Hi

My problem is there is good equity in the property as it is worth far more than my the amount outstanding in my mortgage.

So i am concerned that the lender may force me to sell.

I am just concerned that the lender can take the view that I took on interest only mortgage so i am not a victims and i have to live with the consequences of my decisions.

i know that its my responsibility to keep a repayment vehicle in place. I did have something in place but

due to my serious illness which lasted about four years, that went as i had to repay the arrears and of course,

i have not been able to catch up and make good my repayment scheme.

thats why i am finding it really difficult to present my case to the lender and so i was asking if anyone can advise the best approach.

thank you

BF

a lot of what they will accept is dependant upon your age as that will impact upon your income at the tail end of the mortgage.

You dont have to stick with this company though, you can get a mortgage from anyone who offers one suitable to your circumstances. You then pay off the interest only one and start the new one on the new terms that will be agreed so you wont ned to be begging this lot for mercy.

Hi Ericsbrother

thank you for your message.

i do see and understand your explanation. Its a good idea.

My reasons for trying to stick with this lender are

a. i am 61,

b. got a CCJ (which i am in a process of having it removed)

i figure i have a better chance with existing lender as i overcame my arrears and was able to make over payments

but then i guess they too will look at my current circumstance as well .... so i might as well check out other lenders.

thank you again.

all the best/BF

burmafriday hi there did you recieve my message

Hi me again we are in the same situation , but our interest mortgage finishes in 4 years time im off to see my mp on fri can i ask when you took out your mortgage were you fast tracked by a broker self cert as i was reading on a website that this could have been mis-sold ?

burmafriday hi there did you recieve my message

You cant send private messages as a newbie.

Hi Georgina Karen

i took it out in 2007. yes it was fast track and done through broker.

I was doing really well in those days and i was able to prove my income.

yes i was thinking of checking my arrangement too including the charges they imposed on

me when i was in arrears.

Well at least you have time. As i am actually going through this issue, my advice to you would be

to put every penny you can away so you have some lump sum saved up at the end of the term to

offer the lender. Seriously, put every penny away and save like made for the next 4 years.

and if you can, think of moving to a repayment now or as soon as possible and even get rates from different

lenders. (I cannot do this as i cannot prove my income now.)

i shall be most interested to know how you got on especially with your MP - so pls let me know

Good Luck. God Bless,

All the best

BF.

Hi Georgina Karen

you asked if i were fast tracked by a broker and mentioned that it could have been miss-sold.

i did not pick up on that earlier, but will you pls advise why you think that, what you are doing about it and

possibly send me a link?

thank you very much

Burmafriday