Falling short with an interest-only mortgage
Q WE are in our 60s and have an interest-only mortgage with a term that ends in six months. Our lender says we cannot renew. What options do we have as we cannot afford to pay the outstanding lump sum? A THIS will depend on your circumstances, such as how much you owe and your financial situation.
If you meet affordability criteria you may be able to take out a loan with another lender as many have extended the age limit on their mortgages.
Speak to an independent mortgage broker who can advise you on the lenders you may qualify with.
You may be able to take out a retirement interestonly mortgage or consider equity release – but do ensure you thoroughly check out this option so you understand the effect it will have on your long-term finances. It’s not the right move for everyone. Q I HAVE had my free Pension Wise session but it hasn’t helped me to make a decision on what to do with my pension savings. I’m wondering if I should put some smaller pensions into one pot, take lump sums or opt for an annuity. Is there anywhere else I can turn for advice?
A
PENSION Wise only offers general guidance and information on the options available, they don’t give tailored advice to individuals, like an independent financial adviser can.
Without knowing your full personal circumstances and needs during retirement, no one can advise you on what is the best option.
You could go through your finances and work out what you will need during retirement to pay regular bills and manage financially, then you can decide which options may be best for your various pension pots. Or you could seek help from an IFA. You can find an IFA in your local area via vouchedfor.co.uk or unbiased.co.uk. Q I’VE just begun renting my first flat and wondered what protection I might need to take out to cover my regular bills as I live on my own. Which would you recommend – critical illness or income protection? I cannot afford both. A I WOULD recommend you consider income protection first as this will pay out after any deferred period on the policy if you’re unable to work due to illness or injury. You may want to consider redundancy cover too. QHAVE
new rules come into force regarding help for those in debt? I thought I’d read something about freezing interest and charges, but I’m not sure who this can help and when. ATHE
Government’s ‘breathing space’ initiative that comes into force next year will be a 60-day period which will see interest charges and enforcement action from creditors halted for those with problem debt. During the 60-day period people will get professional advice to help them to find a long-term solution.