Like many of this generation, Mr and Mrs S had an interest-only mortgage. They were increasingly worrying about hitting the “brick wall” – reaching the end of the mortgage term. They’d always planned to downsize when the time came, but they enjoyed where they were living and didn’t want to have to go. They are still in their mid-50s, have lots of friends nearby and with the kids off their hands, have more time to do some of the things to the house that they always meant to – Mr S has created a water feature and is landscaping the garden and they have installed a new ensuite. They might want to downsize when they are “old” but right now they would really like to enjoy their home – the fruits of their labours after 25 years of being flat-out working parents.
Although the mortgage wasn’t huge, they couldn’t see any way to pay it off in the seven years they had left.
A friend suggested they give us a call about the land at the side of the house.
We assessed the area and found that it wasn’t big enough to build on. However, we noticed that the house at the end of their garden had a large plot and with a small part of that added, the scheme would be viable. We worked out what could be done and approached the young couple in the house behind, who were over the moon at having the opportunity to release some cash too.
It involved quite a bit of legal work, and it was a bit more complex with several parties involved, but the end result was that both Mr and Mrs S and the young couple received a significant sum.
They decided to use the money to substantially reduce their mortgage. Their lender agreed to convert the loan to a repayment mortgage and worked out that for less the original payment, they could be mortgage-free in five years – well before Mr S’s planned retirement date.
Mr and Mrs S. can now look forward to the future knowing they can stay in their home and no longer worry about what will happen to them when they can’t work any more.
As a group, we can usually offer a number of different solutions to this situation. If you have a looming end-date for your interest-only mortgage, get in touch and we’ll do our best to find one that suits you.