Interest only mortgage

[Mynameisntkaren]

Please don't judge.
Have interest only mortgage of £180000
House value £370000
If we downsize to pay off mortgage, for example pay off mortgage leaving approximately £195000 equity, is it feasible to get a mortgage for approximately £70000 to buy next house to add to the equity to look at property around the £260000 price.
We have 4 years left on IOM, but will be getting large pension which originally was to pay off but this isn't for 9 years.
I just want to know if this is possible.
Worried sick doesn't even begin to describe it. Have mame changed btw 😥😥😥

I know we need to talk to mortgage company asap. But there are serious reasons why we haven't yet that I don't want to say.
I just wanted to know if it is feasible or not. I can't sleep at night worrying about it. My husband earns approximately £55000 but I no longer work. Any advice?

The equity can pay off the loan.

New mortgage application depends on mortgage company

You would be better at paying off £195-70 so £125 to keep you existing mortgage going - but look at fees - would a new one be better terms?

Sorry bit confused. Bottom line I suppose is. If we sell and pay off loan we won't have enough to buy another house so is it feasible to think we could possibly get another mortgage to add to equity to buy new property?

Can you port your existing loan while using some of the equity to pay it down?

His old are you, close to retirement age? How long would you be looking at having the new mortgage for?

Sorry Pheonix, I don't understand your question.

We are both 57

I am just hoping the mortgage company will allow us take on a new mortgage once interest only has been paid off, if that makes sense??

You'll probably get some of kind mortgage but it would only be over 10 years or less and so the repayments will be higher and you definitely wouldn't get an interest only

Thank you, I know it's a lot of ifs and buts, however if it was possible it would be a huge weight of my mind.

porting a mortgage means using/transferring your old mortgage across to your new purchase as part of your new mortgage
Whether this is allowable with interest only I do not know www.moneysavingexpert.com/news/2018/01/interest-only-mortgage-timebomb-act-now-/#:~:text=With%20an%20interest-only%20mortgage%2C%20you%20only%20pay%20the,below%20for%20help%20on%20what%20you%20can%20do.
However the above might be useful or go directly to the FCA website & see info
banks have a lot to answer for
Alternatively it might be worth talking to a mortgage advisor & your loan company

As what mumwon said. I’m not an advisor or anything, but recently enquired about porting my mortgage.

I’m thinking:
You sell current house.
Existing mortgage is converted to repayment, reduced by sale of house then applied to new house. Same term etc.

When you are ready it might be worth contacting existing company first to see what they can offer.

Thanks, we are in this mess due to a dodgy mortgage advisor and having major family issues. Totally our fault for not realising that pension would not mature until after mortgage finished.
So need to speak to mortgage company. I just hope that we can do something. We want to downsize regardless as children hopefully will be leaving home in the next few years. Also want to move to new area, with better transport etc.
I just want a way to get this sorted.
Looking at rough ideas of paying back mortgage of say £60000 over 10 years is doable.

I don't understand why you are worried - it's a smaller mortgage than your current one, it's well within the income criteria and (presumably) can be repaid from the tax free lump sum from the pension??

Sorry, X-posted.

Ask a broker. The normal max mortgage amount is 4 x salary, which would be £220k. But that would be for someone with 25 years of working left. Your dh only has 10 (and by the time you get round to selling may be much less - so action sooner rather than later) which will obviously limit the amount you can borrow. On the face of it a £70k mortgage would seem reasonable. But if you leave it till your dh is 62 you might struggle to get anyone to lend that amount over 5 years.

If you sell your house your old mortgage obviously has to be paid off because it is secured on that specific property. Any new mortgage application will be based on your current circumstances. A 70k mortgage with a 55k annual income looks very affordable on the surface, but obviously the sticking point might be your age and the term. Years ago mortgages tended to have a maximum age of 65 but that was when employers could force you to retire at that age. Maybe these days they are willing to go past that age if your intention were to continue to work. Is your husband the same age as you? Is he planning to retire?

Dh same age as me, planning to retire at 67. Has good pension

Santander and quite a few other providers will give a mortgage to 70/75 as long as you can prove a pension income. Have a look at the Money Saving Expert Forum. There is a talk forum with lots of subjects. One is a mortgage section. You can post there and there are lots of expert brokers there to advise. A broker will know what lenders will look on this situation favourably.

Thank you, I've been looking on a few mortgage companies this afternoon and it does seem possible.
We really need to speak to someone. Feel a bit more hopeful we will be able to sort this out.

Find yourself a good mortgage broker and speak to them
We had an interest only mortgage being of a similar age to yourselves we changed to a repayment mortgage over 10 years

www.fca.org.uk/consumers/mortgage-advice

register.fca.org.uk/s/

Why not just start paying off the capital?
Have a look at the second spreadsheet in the OP of this thread
www.mumsnet.com/Talk/legal_money_matters/1987219-SPREADSHEETS-for-Debt-Control-Budgeting-Mortgages-etc

Thats definitely possible OP, speak to a decent broker.