Interest only mortgage

[BrilloPad]

I am interest only : capital will be paid off by a business deal.

It does not affect my credit rating atall.

[gingerjedi]

We've still got 18 months on quite a good tracker deal so we'll be sticking with that by the looks of it, just thought that IO would free up some cash for a bit seeing as rates are so poor etc etc.

Now I've had first hand experience of just how tight lenders are being I predict a blood bath on a biblical scale, it's going to be Armageddon out there when all those poor permies redundancy payments run out and the harsh reality kicks in.

Rates may be bad at the moment but the IT market is big and diverse so I expect to get something at some point to at least tide me over, I can’t imagine for one minute that would be the same for an ash tray fitter from the Honda plant.

[ASB]

Finally got round to calling Nationwide, the guy on the phone told me we would need at least £150k equity in the property to be considered. Our house is worth £170k so by my calculations that's an LTV of about 12%, why on earth would I want to switch to IO if I only had a mortgage of £20k???

We have an LTV of 59% which I thought was bloody good, god help the masses when the tulip really hits the fan.

Do your sums to work out if it's worth switcihng to somebody else. I have just signed up for First Direct at Base + 2.39 (ouch but it's the best I can do). It's an LTV of just under 75%. 75% is the max.

Basic problem #1: Nationwide don't do interest only. (As you have discovered this they will consider it under certain circumstances).

Basic problem #2: you will have to get through the underwriting state and loads of people are bloody strict. With an LTV of < 60% Woolwich have a variety of deals with a loadend front end rate for a 2 year term (depending on arrangement fee) and base + 1.49 for life. Though this is likely to be more expensive than your current Nationwide mortgage.

Instead of trying to get Nationwide to switch it to interest only can't you ask them to extend the term?

[TykeMerc]

Finally got round to calling Nationwide, the guy on the phone told me we would need at least £150k equity in the property to be considered. Our house is worth £170k so by my calculations that's an LTV of about 12%, why on earth would I want to switch to IO if I only had a mortgage of £20k???

We have an LTV of 59% which I thought was bloody good, god help the masses when the tulip really hits the fan.

£150k equity?? That's rather a lot.

I had an interest only mortgage 10+ years back, but of course the banks hadn't been burned badly like they have recently.

It just goes to show how many mortgage products have ceased to exist.

[gingerjedi]

Finally got round to calling Nationwide, the guy on the phone told me we would need at least £150k equity in the property to be considered. Our house is worth £170k so by my calculations that's an LTV of about 12%, why on earth would I want to switch to IO if I only had a mortgage of £20k???

We have an LTV of 59% which I thought was bloody good, god help the masses when the tulip really hits the fan.

[DaveB]

Would switching from repayment to an interest only mortgage ruin my credit rating? I'm benched from today so looking to reduce all outgoings until further notice.

Should have no effect on your credit rating as long as you keep up the payments. Missed payments on anything are what screws your credit rating.

If you're current lender wonty play ball consider going for an offset mortgae with a different lender. First Direct have good deals on atm if you are looking for <80% of the property value. It is essentially an interest only mortgage, but they will quote you for repayments over a specified term if you ask them. That way you can offset any personal savings you have against the mortgage as well, further reducing the interest payments.

[gingerjedi]

Don't forget to claim your contribution-based Jobseeker's Allowance which is 60.50 pounds a week for six months. Get a P45 from your accountant or previous employer. This will also allow you NI credits for the period out out of work. Even if you do not qualify for JSA you can still get NI credits and this is certainly worthwhile if the recession drags on.
If you have under 6K savings you can claim benefits-based JSA, council tax rebate and interest payments for your mortgage, but you cannot get housing benefits until 13 weeks after your claim goes in. The drawback is that you have to sign on every two weeks and show that you are actively seeking work.

I made the mistake of hanging it out last time I was benched, if I'd known it would be 5 months I'd have gotten a P45 straight away. I'll be emailing the accountant by the end of the week if nothing turns up.

I can't believe I'm considering roles on half what I started out on 6 years ago when I was wet behind the ears.

[Cyberman]

You even come across smug on the dole.

Smug because I am drawing my pension from June and will not be drawing the dole while most others on here may well be due to HMG incompetence.

[DimPrawn]

Don't forget to claim your contribution-based Jobseeker's Allowance which is 60.50 pounds a week for six months. Get a P45 from your accountant or previous employer. This will also allow you NI credits for the period out out of work. Even if you do not qualify for JSA you can still get NI credits and this is certainly worthwhile if the recession drags on.
If you have under 6K savings you can claim benefits-based JSA, council tax rebate and interest payments for your mortgage, but you cannot get housing benefits until 13 weeks after your claim goes in. The drawback is that you have to sign on every two weeks and show that you are actively seeking work.

You even come across smug on the dole.

[Cyberman]

Would switching from repayment to an interest only mortgage ruin my credit rating? I'm benched from today so looking to reduce all outgoings until further notice.

Don't forget to claim your contribution-based Jobseeker's Allowance which is 60.50 pounds a week for six months. Get a P45 from your accountant or previous employer. This will also allow you NI credits for the period out out of work. Even if you do not qualify for JSA you can still get NI credits and this is certainly worthwhile if the recession drags on.
If you have under 6K savings you can claim benefits-based JSA, council tax rebate and interest payments for your mortgage, but you cannot get housing benefits until 13 weeks after your claim goes in. The drawback is that you have to sign on every two weeks and show that you are actively seeking work.

[TheBigD]

I looked at doing somthing similar a few months ago as the mrs is on maternity leave. The bank said NOW WAY to interest only. We have about 35% equity in the house (even at current prices), so it looks like many of the lenders are playing hardball!

[ASB]

Would switching from repayment to an interest only mortgage ruin my credit rating? I'm benched from today so looking to reduce all outgoings until further notice.

It shouldn't, but depends on you lender. They will normally charge you a small fee though.

[gingerjedi]

Would switching from repayment to an interest only mortgage ruin my credit rating? I'm benched from today so looking to reduce all outgoings until further notice.