Interest only mortgage coming to an end

L

LawFully

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Along with my ex partner, I have 18 months left on an interest only tracker mortgage that was passed to Pepper from Bank of Scotland. We havent missed any payments and have paid between 10 and 15k per year off the capital each year for the past 3 years.

The house is the primary residence of my ex partner and is worth about 250k

By the time the loan is due the remaining balance should be about 120k (we will pay another 20k off the existing capital in the next 18 months)

We can’t pay the balance off when its due unless it is discounted by about 30%-with savings,some good will from relatives and maybe a small loan.

We are luckily in a position to be able to continue the payments of about 15k per annum.

Does anyone know what we might expect as a reply from Pepper if we approach them and ask to discount or extend the loan so that we can clear it over the next 5 or 6 years? We are both in our 60’s and I dont want to have to sell the home. Are they likely to offer us reasonable terms?
 
You will not have to sell the home.
You will not get a discount - but you may as well ask, just in case it's owned by a fund who wants out.

They might tell you that the loan is unsustainable but what can they do? If they start legal action, you would have the loan well paid off by the time they get near the courts.

Just write to them and tell them that you will pay the loan off over the next 6 years. However, if they would accept a settlement of €80k, you may be able to borrow it from family.

They will just let it go on and might give you a call or two.

Both your names will appear as defaulters on the Central Credit Register but that won't matter too much if you don't intend to borrow any more money.

Brendan
 
Thanks Brendan, I did see in a previous post that Pepper had made an offer of 15% out of the blue to another member here who was also coming to the end of their loan period.Have you heard of any other cases of this?
 
Brendan Burgess said:
You will not get a discount - but you may as well ask, just in case it's owned by a fund who wants out.

They might tell you that the loan is unsustainable but what can they do? If they start legal action, you would have the loan well paid off by the time they get near the courts.

Just write to them and tell them that you will pay the loan off over the next 6 years. However, if they would accept a settlement of €80k, you may be able to borrow it from family.

They will just let it go on and might give you a call or two.
Click to expand...

As expected our offer wasn't accepted.

We will try to extend the term through their resolution process, but if they consider it to be unsustainable ( as Brendan mentioned above) can we just keep paying into the same account when the current term expires? Would we be informed of changes to the interest rate in order to keep the interest amount correct and are there any other issues that we may face apart from being on the Central Credit Register?

Would 6 years be sufficient to complete the loan and avoid a repossession if they issued legal proceedings when the term ends?
 
IANAL

In my view, as long as you are paying off the capital, it's very unlikely they'll get an order for repossession.

Keep firing money at the capital, pull in your horns, cut down spending, do overtime, get a second job, whatever - just throw everything you can at it. You don't want to be retired and still be paying.
 
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