Mortgage Problems

[dorisday]

I have a very dear friend, who has lurched through life! She has had two disastrous marriages. She now finds herself at 64 with a mortgage on her house of £95000, lump sum pension pot of around 40000 and two very small pensions. She is already taking her state pension of not very much. She is asking me for advice about how to reduce her mortgage. Can any one offer a glimmer of hope for her. She is working but is desperate to retire.

[andrew1707]

Has she considered moving to a cheaper property?

[dorisday]

It's already a very small house and as far as I am aware, only worth around 180000. She has been very unlucky in life. She has worked hard all her life and it now looks like she is not going to have very much to show for it. Unfortunately picked the wrong sort of men too.

[Old_Geezer]

64 and a £95k mortgage. Not many options I can think of, aside from winning the lottery/pools.

I am of a similar opinion to Andrew. One has to cut one's coat according to one's cloth. Can sympathise regarding the expensive life experiences from the past but the only obvious way to reduce or remove that millstone is to look for properties around the price range she can afford.


Desperate to retire ? Well even not counting interest a payment of £500 a month for example would take almost 16 years to clear. (Almost £8000 a month to clear it within a year.) This is not going to happen quickly enough for a decent retirement age so releasing the value of the property sounds the only rational option.

Or take all the proceeds and rent ?

I've not looked at equity release where the company wants your property after your death: but I understand it is very favourable to the company and not good value for the house owner.

[dorisday]

I have suggested she take herself off to her mortgage company and see if they can help her anyway. Otherwise I think, as you say, she needs to win the lottery or find a lovely rich man!!!!!!

[EDDIE51]

Get her down to the local council and put her name on the housing list for social housing. As she is a pensioner she qualifies as a 'vulnerable person' and is a priority case. The fact that she has a mortgage is not relevant to getting social housing. She has to say that as a pensioner she can not afford the mortgage(which is true) and she needs to retire due to deteriorating health.
You have to know how the 'system' works and use it to your advantage.
For the record my Mother was in the exact same position and got social housing within 6 months. My brother who is the senior housing finance manager for a large London borough arranged it all and made sure it was 100 % legal .

[hc4361]

Not every has a close family member who has a good position in the housing authority, Eddie.

A good friend of mine was in her early 60s and still working when she had bowel cancer. Of course she had to retire and struggled with her mortgage. The council wasn't prepared to help her. She had to sell up and rent privately

[EDDIE51]

^^ She should have not paid the mortgage on the grounds could not afford it and got an eviction notice. Once she had that the council would have been compelled by law to rehouse her as an emergency. As I said you have to know the system and how to make it work to your advantage.

[Hypognosis]

@dorisday

I don't wuite understand why but every reply, so far, has assumed you meant the mortgage is £95,000 still owing. Excuse me for seeing ambiguity where there may be none but can you confirm that this is the case? (As opposed to your friend mentioning this figure because that was how much it was when she started it).

Also, please tell us that it is not an endowment mortgage? (bygone things?)

[Buenchico]

>>>It's already a very small house and as far as I am aware, only worth around 180000

A small house (such as the one I live in) around here [in a very pleasant part of the lovely county of Suffolk] costs around £100,000. Perhaps your friend has links to a cheaper part of the country than where she now is, so that she could move home, while still being close to friends or family, thus solving her financial problems?

Otherwise talking to the lender might be worth a try. A friend of mine managed to extend her mortgage (thus lowering her monthly payments) twice after she'd reached retirement age, so it's certainly a possibility.

[granny grump]

All previous answers are relevant. Is the mortgage on interest only She should speak to her mortgage provider. Some and I stress some would consider an arrangement whereby she continues to pay the and mortgage and they would recoup the mortgage from her estate when she died. Also speak to CAB and any housing charities in her area

[dorisday]

Thank you for all your answers. I am seeing her this evening, I did not realise until very recently what problems she had!!!!! So we will be having a real good chat. I will find out if her mortgage is interest only and whether it was 95000 at the start and has gone down a bit. She lives in Norfolk, which is quite cheap for housing anyway. I think a visit to her lender or CAB is her next best step. I will see what she has to say tonight.

[auntie-bertie]

Take in a lodger?