We have a holiday home without any mortgages or charges against it. It is relatively new, built in the last 10 years. Our PPR has 3 mortgages with 10 years left approx and has 100,000 equity left in it at todays prices. Cash flow is our problem and my question is about raising funding to pay education and living expenses. The living expenses are being pressurised by short term loan repayments. There are no arrears due to anyone at the moment, we have had a very lean Christmas and I would like to turn the heat on for longer. Any suggestions? Thanks
Mortgage - raising funding to pay education and living expenses
- Thread starter jimoc
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Brendan Burgess
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OK
If you have 10 years left on your mortgage, I am guessing that around 75% of the repayments are capital. If you are under cashflow pressure, then you should not be paying off your mortgage. You should try to pay just the interest.
If you have a cheap tracker, the lender will definitely not agree to it.
If you have svr, they might agree to it.
If they don't , you may have to sell the holiday home.
If you have a cheap tracker on your home, it's so important to keep it, that selling the holiday home might be a good idea.
brendan
If you have 10 years left on your mortgage, I am guessing that around 75% of the repayments are capital. If you are under cashflow pressure, then you should not be paying off your mortgage. You should try to pay just the interest.
If you have a cheap tracker, the lender will definitely not agree to it.
If you have svr, they might agree to it.
If they don't , you may have to sell the holiday home.
If you have a cheap tracker on your home, it's so important to keep it, that selling the holiday home might be a good idea.
brendan
MARP would still apply in your case. Ring the helpline of your mortgage provider and advise them of your cash-flow concerns. Given that you have positive equity in the property they are unlikely to insist on a sale of the holiday home (they will not even ask for details of other assets owned at this stage). You probably will not get an IO agreement but should get some mitigation on current payments.
Interest only
Hi Brendan,
So if we go for an interest only solution for a given time how do we go about organising that? Will this have an impact on our credit standing? On working the maths then on what you suggest might be a runner if my morgage is 2.5k now the interest only payment would be 625 and my payments would be freed up for now to allow us 1875. How long would they allow me to do that for? We have a SVR mortgage taken out in 1988/89
Thanks
Hi Brendan,
So if we go for an interest only solution for a given time how do we go about organising that? Will this have an impact on our credit standing? On working the maths then on what you suggest might be a runner if my morgage is 2.5k now the interest only payment would be 625 and my payments would be freed up for now to allow us 1875. How long would they allow me to do that for? We have a SVR mortgage taken out in 1988/89
Thanks
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Highly unlikely that you will be given an IO option if financial profile indicates that you can afford a higher level of repayments. All such requests are now handled under MARP and you will need to contact the providers help line to detail your request. They will most likely ask you to go through income/outgoings as part of this process, so have all this information available before making the call.
The mortgage repayment is the 'big one' but the ones that are screwing me up are the bank loans. Apparently there is no more 'fat' in our incomes for the bank to help. Is there a 'strategic' way out of this cul de sac? Its breaking my heart to be in a position where I actually do not have any access to any money and I am in fact walking around without money. Its scary stuff!
Brendan
What is the best way forward for us? I am aware that people borrow for one thing but use the funds for something else. As we have 'strong assets' and the security of those are gilt edged so to speak could we not get a 10 year mortgage from the bank (not the same provider as the mortgage) clear loans, free up the existing repayments and the difference between the new and the existing gives us the breathing space.
Yes? No? Am I fantasising here?
What is the best way forward for us? I am aware that people borrow for one thing but use the funds for something else. As we have 'strong assets' and the security of those are gilt edged so to speak could we not get a 10 year mortgage from the bank (not the same provider as the mortgage) clear loans, free up the existing repayments and the difference between the new and the existing gives us the breathing space.
Yes? No? Am I fantasising here?
Who makes the decision on granting an IO repayment? Can I walk into my manager of my mortgage provider and say I need to pay IO for now until things pick up or do I need to procedurally go through MARP.
Brendan Burgess
Founder
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- 53,361
I am confused. what are the "bank loans"? how are they screwing you up?
Get onto the bank'S website and follow the MARP instructions or visit your branch.
You seem to be going through a lot of pain to hang onto a holiday home. A holiday home is a luxury. start the process of selling it. This should solve your problems.