Posted on 27 March 2010 by brizboi
I borrowed £25000 on a 10 year interest only mortgage with Egg to buy under the rtb paying a deposit of £30000, the property was dicounted to £55000. I'm 65 in October & due to repay £25000 by then. I'm wondering how to do this and my options the property value is around £145000 now the mortgagor told me they wouldn't extend the term beyond my 65th birthday so I'm assuming I will have to sell, and buy something else I'm not working due to ill health and get pension credit who, atm are paying the interest for me, I have just under £10000 in savings.
If Egg have confirmed that you can not extend the term of your mortgage and you have not got a repayment vehicle in place, then you do not have many choices. You have got to repay the mortgage and the question is how do you raise the funds to do this?
If you sell the property, will the equity you release circa £120,000, be sufficient to purchase a new property for cash and meet the associated costs?
You may be able to refinance the loan. Considering your present situation I do not think it likely that a High Street lender will grant you a mortgage, but it may be possible to raise the amount you require through an Equity Release mortgage. These loans are only repayable when the property is sold, on your death or earlier if you move and the interest is added to the outstanding mortgage debt.
Finally, do you have any family who could come to your aid? Whilst it can be embarrassing to ask for financial help from friends or relatives, you have to put this in perspective when the alternative could be losing your home.
I recommend that you speak to an organisation like Age Concern and to an independent mortgage broker whilst you still have time to resolve your dilemma.
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