Building society refusing interest only agrangement

[Shireswoman]

I have been ill for some months and had asked my building society to switch to interest only payments, they refused.
I had to give up my job six months ago due to ill health. Their policy is to give three months grace only.
Last week I received a cancer diagnosis. I will under go six months of treatment.
I will not be able to work, I'm self employed.
Is there some sort of charter for the treatment of cancer patients that I can access?
I am happy to downsize but I don't want people through the house post my operation. Any advice welcome.

I’m sorry you’re going through this OP. Your provider has discretion on switching to interest only and likely isn’t because you are currently unemployed.

I would recommend contacting Macmillan for advice x

I thought all mortgage providers now had to give 6 months interest only, on request?

@BorgQueen that's what I thought but they say no.
I can afford the interest only payment but they are pushing for the house to go on the market. There is good equity in the house plus I am accessing pensions.

It depends on your lender. 75% of lenders signed up to the charter, there’s a list of then online, but it sounds like yours may not be one of them.

Or if they are, you may not meet the criteria which is to do with arrears/new term not finishing before retirement age and a couple of other things

@Mrsttcno1 they didn't sign up to the charter.
I've spoken to a financial adviser and he suggested equity release or changing to a life time mortgage.
The BS has already effected my credit rating.
I haven't told them yet of my new diagnosis as it only happened last week.

Unfortunately if they didn’t sign up to the charter then it is up to them what they will offer, it sounds like that is just a 3 month payment break.

I’d recommend calling Macmillan, they have people who may have other ideas specifically for finances for those with cancer diagnosis.

I’m sure you’ve already thought about this but just incase you haven’t, do you have any critical illness insurance? Lots of policies now will pay out upon diagnosis even if a lower amount so worth checking.

No critical illness cover. My husband has me insured through his employer. It wouldn't meet the outstanding mortgage but would be enough for a home for him and our DD.
Obviously I don't know how I will feel until after my surgery. It's a difficult operation with chemo and possible radiotherapy.
I switched to self employment as I couldn't travel anymore. (that was a bad move, but I couldn't work and came under pressure to resign). I have claimed state sickness pay.

Sorry to hear about your diagnosis 💐

Is there a realistic prospect of you being able to return to paying your previous mortgage payment in the next 6 months- a year?

If not then unfortunately the lender is doing the right thing in supporting you in finding another solution, whether that’s lifetime mortgage or sale and downsize and unfortunately they can’t wait forever for their money and you will just continue to accrue larger and larger arrears.

If yes then explain the situation and your plan to get back on track with payments and they may well grant you an extension.

Without wanting to kick OP while she is down this is a stark warning to other self employed people who rely on their income to pay their mortgages to ensure they pay for insurance to cover loss of earnings or critical illness cover.

If you aren't able to pay whilst drawing pensions too OP you can see why the building society believes you may not be able to make up the shortfall. If you were to downsize would you be able to buy somewhere else outright.

Please do jot go down the equity release route at all!

Not able to buy anything outright. My type of cancer is 50/50. (I hope you unstand I prefer not to say anymore).

First very small pension in today.

I do have company shares but they are not vested until the end of the year.

I'm employed but I can't get critical illness cover annoyingly
I was diagnosed with a condition before I bought a house which I didn't realise was classed as a critical illness so no cover available

I couldn't get cover either. There is no critical illness attached to my life cover.
I'm no longer covered by death in service.
I'm trying to pull pensions early. I'm over 55.

I struggled to get life cover when I became self-employed in my 40s due to a family history of various cancers. I found some eventually but for much less value than my previous death in service benefit and for quite a high price. I had no hope of getting critical illness cover. It's not as easy as saying 'make sure you have it'.

All I can do is try to get my mortgage paid off asap so at least I and my family will have. Roof over our heads if I can't work.

Make sure you claim any benefits you are entitled to.

A lifetime mortgage might not be a bad idea if you can afford the interest payments, that way the debt won’t double every 6-8 years.