Interest only mortgages an option?

[Maybee]

I hope i'm posting in the right area. I split with my xh in November and wish to move closer to my family and rent a house with the 3 dc. However the mortgage on this house is high so renting it out would not cover it. My xh went to see the bank to look at the option of an interest only mortgage so he could live here and keep on the house at least until the market improves. However as it is an 88% mortgage the bank won't do this. I paid the deposit on the house so I do need to get it back to eventually buy another house. However we took out equity to get a new kitchen and x bought a plot of land in his name only! that is why our mortgage is at 88% Does anyone know of banks that will give out interest only mortgages even for a year or so? Or of other options?

The banks are very worried about lending on an interest only basis because, obviously, there is no guarantee the capital will be paid off and the higher the loan to value ratio, the less likely they are to want to do it. If your current lender won't do it, then it's really unlikely that you would be able to with another lender but it might be worth talking to a broker.

The only way that I can see that you can do anything is if your ex sells or mortgages the plot of land and pays off some of the capital on the house. If he can get the mortgage down to about 70%, he may be able to get a buy to let mortgage on it and rent it out until the market improves if there is a need for rentals in your neighbourhood. Alternatively, if the house is big enough, he could live there and rent out rooms and use that money to pay the repayment portion of the mortgage. The problem with this is that it might mean you are kept waiting a very long time for any equity.