Can I avoid selling my home to clear interest-only mortgage?
I AM 68 and over the past ten years all my family has passed away, including my parents and both my brothers.
I’ve used my savings for funeral and estate expenses and I’m left with an interest-only mortgage of £80,000 on a property worth £100,000.
The mortgage has five years left to run. Santander, my lender, will extend it only to age 75, at which time I’d have to sell my home as I have no savings.
I have pensions from the Royal Navy and Royal Mail as well as my state pension, giving me a total income of around £19,000 a year after tax.
My mortgage payment is £320 per month, which I can afford. I could probably pay up to £450 to £500 if the product was right. G. W., Burnley, Lancs. You’re not alone in facing the problem of time running out on an interest-only mortgage with no means of repaying the capital. It is estimated that up to 40,000 interest-only mortgages will mature every year between now and 2031.
A YouGov poll in 2015 suggested that around half have no linked repayment vehicle. Yet the lenders who helped put people into this position seem strangely reluctant to address the problem.
Santander says that when you approached, you asked for a lifetime mortgage, which it does not offer. It does work with Legal & General on lifetime mortgages, but you didn’t qualify because of a lack of equity.
But what struck me was that you were still on the standard variable interest rate of 4.74 pc. once I pointed this out, Santander offered a much better five-year deal at 3.69 pc, which will cut your monthly interest payments to £235.
This will give you more flexibility to start tackling the capital owed on your loan — and I suggest you pay as much as you can afford each month.
I also took this problem to David Hollingworth, at mortgage specialist London & Country. He says that many lenders are becoming more flexible around maximum ages.
Family Building Society looks at borrowers on an individual basis and may consider a mortgage up to the age of 89.
And Hodge Lifetime has developed a mortgage aimed at borrowers as old as 95. So age is not necessarily the problem.
However, your lack of equity is. For example, Hodge will consider interest-only to a maximum of 60 pc of the property value.
The other point is that this is a rapidly changing market and equity release lenders in particular are attempting to come up with solutions.
It may demand some flexibility from regulators, but I am hopeful that over the next few years there will be new products aimed at helping thousands like you remain in their homes. I OPENED accounts for my grandchildren with National Savings & Investments and put a few pounds away for them over a number of years.
Due to a major family breakup, I have been refused access to the children and they have left the country. I contacted NS&I explaining the situation and was advised to fill in forms indicating details of the guardian (which I am not) and the parents (with whom I no longer have contact).
I have now been advised that I can’t close these accounts unless I provide this information, which is impossible. Mrs M. K., Essex. WHAT a sad case and I’m afraid I have further bad news, because I can’t see any way to retrieve the money.
I contacted NS&I, which says its terms and conditions state that once a grandparent has provided a guardian for an account then that person will have overall responsibility until the child reaches 16.
This means you will not be able to close the account or retrieve any funds you have put into it.
In the case of children’s bonds, all correspondence relating to the bond, including the investment record and anniversary statements, will be sent to the nominated parent or guardian.
I suggest you keep records of these accounts because one day, when they are grown up and can make their own decisions, your grandchildren may decide to seek you out.
You will then be able to present them with a gift to show that, while you may have been separated, they were still very much in your thoughts. ON JULY 16 last year, I received a message from Amazon saying there had been a request for a password change on my account.
It said to ignore the message if the request was not from me, so I ignored it.
I then received notification of 26 transactions amounting to £1,100 in total. I tried to log in to my account, but was forced to change the password.
There was no record of the sales on my account, but 26 transactions had been made using my Lloyds credit card.
The fraud has been sorted out, but I still can’t use my Amazon account because a message keeps telling me I owe money. Mrs S. W., Southampton. Amazon tells me your account was closed when you reported the fraud. And it turns out you’ve been a victim of a computer system that’s too clever by half.
When you opened your new account, Amazon’s systems recognised you were the same person and linked the accounts. So once again you found yourself locked out.
What isn’t clear is why it took so long to sort out what should have been a simple issue.
However, Amazon contacted you within an hour of my raising the complaint and your account is finally up and running.