End of Interest Only Period.

L

Louise058

New Member
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First time poster here. Apologies but I'm sure this topic has been covered before on this forum but I just can't find it.

My Interest only mortgage (tracker rate) 20 year mortgage term expires in just over 2 years time. The original lender was BOSI (now managed by Pepper). I can't find any reference in original docs to what happens after the term is up? Can anyone advise or direct me in correct direction.
Thanks.
 
Brendan Burgess said:
Hi Louise

The loan was for 20 years.
When the term is up, you repay the loan in full.

Brendan
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Like Louise I also have one of these mortgages although mine runs for a few years more.

Certainly it was my understanding that when the term is up the loan becomes repayable in full. However I am not clear where this idea comes from. It certainly does not seem to be anywhere in the mortgage documentation.
 
How do you know it's for 20 years?

A loan for 20 years is repayable at the end of 20 years.

It was not a loan for 30 years. It was not a loan for 10 years. It was not an indefinite loan.

Brendan
 
Even if it's not stated explicitly (which I would find odd) isn't it implicit in a loan agreement that at the end of the term you pay it back?

Edit: post crossed with Brendan's.
 
peemac said:
I presume it's the same as their UK business
https://www.bankofscotland.co.uk/mortgages/existing-customers/interest-only-mortgages/mortgage-term-ended.html.
And from the Irish times regarding the Irish interest only loans https://www.irishtimes.com/business...extent-of-risky-interest-only-loans-1.3653279
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Well if they are relying on the terms of UK contracts and newspaper articles I think they may have a problem.

Specifically the article says, ‘borrowers are contracted to pay the principal at the end of the term of the loan’. Well I have read the contract, ( the one I signed not some UK contract) and I do not see anything to that effect.
 
cremeegg said:
Well if they are relying on the terms of UK contracts and newspaper articles I think they may have a problem.

Specifically the article says, ‘borrowers are contracted to pay the principal at the end of the term of the loan’. Well I have read the contract, ( the one I signed not some UK contract) and I do not see anything to that effect.
Click to expand...
Interesting, I have one of these also. You considering perhaps not paying it off in one lump sum, or rolling over/renegotiating terms?
 
Brendan Burgess said:
Cremegg

When you took out a 20 year mortgage 20 years ago , what did you think it meant?

Brendan
Click to expand...
I thought it meant that I would have to repay the loan in full after the 20 years.

However the OP's question, 'what happens after the term is up' hardly comes down to what I, or she, thought.

It comes down to what is in the contract, and that, as far as I can see is silent.

mustang01 said:
Interesting, I have one of these also. You considering perhaps not paying it off in one lump sum, or rolling over/renegotiating terms?
Click to expand...

Yes, the OP raises an interesting question. What exactly are the possibilities around this. I have read the contract and to my surprise it does not make it clear.
 
Louise058 said:
I can't find any reference in original docs to what happens after the term is up?
Click to expand...
You might not have all the original documentation.

Write the following letter:

Dear sir or madam

My mortgage account number is 12345.

Please supply copies all documentation in your possession relating to this account, including all statements issued by all providers, and all documents relating to the loan origination.

Regards
Click to expand...


Address it to:

Pepper Asset Servicing
4310 Atlantic Avenue
Westpark Business Campus
Shannon, County Clare


When you get a response share the relevant wording here and you should get good advice.
 
cremeegg said:
Well I have read the contract, ( the one I signed not some UK contract) and I do not see anything to that effect.
Click to expand...
Out of curiosity, what does the contract say?

To me if the contract was silent I would also assume that I had to make a bullet payment at the end of the 20 years. But a very obvious question is why that was not made explicit in the mortgage contract in the first place.
 
Have a 'standard' Ulsterbank Mortgage contract (not interest only)
It states in section 12. 'Non Compliance with the commitments linked to the loan'

We expect you to:
[...]
* make and keep to arrangements for repaying the capital outstanding at the end of any interest-only part of this mortgage;
* maintain regular payments on the mortgage
[..]
Click to expand...
I'd look for similar wording.
 
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