Lifetime Mortgage or Downsize

I would still try and downsize, not sure I could rely on my husband’s advice given his history.

If you haven’t been paying your current mortgage due to ‘his work issues’, how would paying the interest on a lifetime mortgage be any different? I think your husband is looking for an easy to pay off the current mortgage and all his debts - which presumably he will continue to run up. I think your mortgage lender will soon make the decision about selling for you, at the best price it can obtain - its only concern will be to recover the sum you owe.

Three months isn’t long to get an offer on a house in the current market, and potential buyers will see three reductions in that time as a sign of desperation. However I expect the decision will soon be taken out of your hands by your lender. Have you spoken to them? If not, do so straight away,

It’s not clear whether you have taken advice as regards what you could borrow on a lifetime mortgage or what the interest payments would be - remember they would continue for the life of the mortgage, after you’ve both retired, and there would almost certainly be a penalty to pay if you were to downsize and pay off the mortgage early.

It’s never a good idea to borrow to pay off debts, and I fear your husband will just carry on racking them up if he feels relief from pressure by taking out a lifetime mortgage.

There’s no easy answer to this - if you downsize what do you do when the debts mount up again and another lifetime mortgage is unaffordable? Take out equity release and watch the equity being eaten up by compound interest? Your husband is the problem and you’re not going to change him.

To be honest, I’m surprised your lender isn’t already seeking re-possession, if you’ve really missed 3 months payments and as GSM says they’ll only be interested in getting enough to satisfy the outstanding mortgage, although if they recoup more, you’d be entitled to the difference. Have you tried to re-mortgage over a longer term (doable if your pensions will cover the payments) although you’d probably be limited to your existing lender and at a higher rate.

Maybe the answer is to sell and just rent, using any profit (once the mortgage is paid off) as savings to use towards a long term rental. This could also be an advantage should your DH’s financial woes make it impossible for you to stay with him. However, a private landlord could seek to evict far more promptly if rent isn’t paid on time.

I’m assuming your DH is still working and should really be trying to clear his debt - is this debt on joint cards or loans, for which you would also be liable? Has he taken his (tax free) lump sum from his pension yet? Would that pay off his debts?

I’m afraid, unless your husband can get off his backside and address his debts, I’m sorry to say that the immediate future and your retirement look non too rosy.

Your main problem is your husband. He had got you into a situation where you are behind with your mortgage payments and he has run up a substantial personal debt. What has this money been spent on? Gambling seems an obvious explanation, although it may be an expensive taste in wine, cars, holidays, or clothes among other things.

No matter what his weakness, until that is faced up to and dealt with, there is no satisfactory way forward. I think you also need to speak to a lawyer about your own financial situation. Whatever happens to the pair of you, you must make sure that your own financial interests are protected so that if your husband continues to rack up debt, you do not end up pennyless on the streets.

the enxt question is what is your house worth? You say you have a £120,000 mortgage. Is the house worth £200,000 or, for example £450,000.

In the first case the mortgage lender may well press for a quick sale, regardless of the houses real worth because they will want to get as much of their money back as possible before it exceeds the value of the house. In the second case, they may well be prepared to let you wait out the current lull in house sales end and the market picks up.

Our house is for sale at the moment - and has been for 6 months. Our house is considered highly desireable, but quite, simply, at the moment there are no buyers in the market. The election and the promise of a drop in interest rates in the next few months mean that buyers are holding back. Lowering the price will not help you - in fact it does you a disservice. There are no buyers around and dropping the price will not conjure them up. You need to sit down with your mortgage lender and discuss the best way forward.

However the first thing you need to do is deal with the cause of your husbands debt problems. Until that happens, if you get out of this problem his debts are only going to cause you more problems and having defaulted on this mortgage, you are going to find it very difficult to get another.

I take it that your husband has run up a considerable debt of £30k because of his work issues.

If you cannot sell your house the conventional way, have you consider putting your house in a property auction, and putting the lowest price you can let it go as the reserve price?

If that does not work, then the lifetime mortgage/equity release may be your last option.

You and your husband need to make a quick decision. It seems to me that your mortgage leader will be issuing a repossession order soon and you are at risk of losing your house and becoming homeless.

If you decide on equity release and pay off your mortgage and your husband’s debts that will make you feel much less anxious.
However what would you do if you needed to buy a newer car, had to start paying someone to look after the garden, carry out maintenance etc. could you afford that?
What if your husband started borrowing again?
It did happen to someone I know. They sold the house, went into rental accommodation, paid his debts and were set to live happily ever after.
He did it again! Spending money on totally unnecessary things.
They had to go through a debt management scheme. They will be working way over pension age to keep a roof over their heads.
As GSD has advised go and talk to your lender and tell them you need time. So hard but you need a realistic plan. Lots of us face the same sadness at leaving a beloved home but sometimes it can work out very well.
Good luck.

66 is very young to be taking out Equity release. Although your husband says you will pay the interest, I suspect that, given his debt history that is unlikely, and that the future date when you need to roll up interest will come sooner than you expect.

Let me be optimistic and say that you manage the interest payments for 4 years. You will be 70. You could live into your 90s. Depending on mortgage rates, I am assuming 5.5%, but the rate will vary, up and down, within 15 years, all the current value of your house will have been consumed by interest and, live to 85 and need care, more likely than not - and you will be dependent on your local authority for care.

I am also wondering why you are going into retirement with a £120,000 mortgage. I think there is far more behind your problems than just money - and I think that your current large mortgage as well as the current debt is to do with what your husband is wasting money on, and as I said above, the main thing you need to do is deal with his excessive spending.

Dealing with his spending and financially protecting yourself should be your first priority.

Your husband is very much the problem. He is talking nonsense. You need to be stronger and take the reins

You are in the utmost danger of the mortgage company repossessing your home and you will be out on your ear, with some nasty debts

I definitely second the post above about getting your home into an auction to sell quickly, you don`t have time to ponder the what ifs and maybes. Sell up asap and look for a small home

You really don`t have time on your side

Downsize, and deal firmly with hubby's spending habits.

We downsized when I was 40 with 3 children in tow as OH was unable to work full time for health reasons. The relief of being debt free was enormous.

Two points: If you haven't been paying the mortgage your house will be repossessed by the lender. They will sell the house to recoup only that which they are owed once you've essentially been evicted from the property.

If you haven't been paying the mortgage, I don't see how you will be able to borrow further funds against your home. I can't imagine any lender would allow this.

I think your husband might be offering unrealistic solutions and I suggest you sell the property as quickly as possible before your hand is forced.

I would suggest the OP checks her credit rating and her husband’s. I suspect she will have a shock due to the missed mortgage payments and will find it very difficult to obtain another mortgage or any sort of credit other than at an exorbitant rate of interest. The only option then will be to downsize with no mortgage.

Some very good advice has been given here but once again the OP hasn't returned to clarify points and answer questions.

I do, however, wish her well and hope she can soon come to a decision to ease her mind.

I am also wondering why you are going into retirement with a £120,000 mortgage

Yes, having lived in the house for 25 years too. Are they endowment mortgages?

We took out two endowment mortgages (house and extension) as advised by a financial adviser. They were the popular choice at the time but failed to meet their target. Combined they were far less than your present debt, however.

You love the house but acknowledge it is too large and unsuitable for your needs now so the best option is to sell. I certainly wouldn't want to be taking on equity release/lifetime mortgage. The housing market is sluggish at the moment 🤞 it will pick up soon.

Can your DH look for other or additional work? He has a while to go before retirement and he needs to tackle his debts. How has he managed to accumulate that much? I'd be wary of his advice on financial matters.

My advice would be to take your half of what's left after paying off the mortgage company and find your own place.

I couldn't cope with an OH who racked up such debt at retirement.

The housing market will be slow for 2 main reasons. It's the start of the school holidays and the Euros football matches.

When we sold our house in Suffolk we didn't think about either of those things but nobody was thinking about moving unless they really had to, for work for example.

I don't understand why people are so attached to their houses to the extent that they won't move, even if a move would be beneficial.

I expect it’s an interest only mortgage and the sum borrowed is still outstanding Calli. Probably not backed by an endowment policy as they fell out of favour years ago because they weren’t performing sufficiently well to pay off the mortgage. Very popular back in the 80s.

How weird that it takes so long to sell when there is a shortage of housing. It takes about 2- 3 weeks on average here and real estate agents constantly phone and email us asking if we want to sell. Very annoying. We live in a nice area but nothing that special. Another difference is mortgages, most here would have paid them off by the age of 50 or earlier. Just seems to be normal. Perhaps with the price of houses so high now mortgages will hang around a bit longer. How on earth can people ever retire if they still have to pay mortgages? Seems wrong - banks are ripping people off by the sound of it.

Banks don’t make people take out mortgages or tell them that they must have a mortgage term which goes on into their 60s or beyond. Plenty take out an interest only loan with no thought of how they will eventually repay the capital sum.

Germanshepherdsmum

I expect it’s an interest only mortgage and the sum borrowed is still outstanding Calli. Probably not backed by an endowment policy as they fell out of favour years ago because they weren’t performing sufficiently well to pay off the mortgage. Very popular back in the 80s.

Yes, that is probably right, Germanshepherdsmum. It was just a thought.

The housing market will be slow for 2 main reasons. It's the start of the school holidays and the Euros football matches

It's been sluggish for a while Dinahmo.
It's part of the Truss Effect I think.

Germanshepherdsmum

Banks don’t make people take out mortgages or tell them that they must have a mortgage term which goes on into their 60s or beyond. Plenty take out an interest only loan with no thought of how they will eventually repay the capital sum.

Good point GSM!

It’s been very slow for a long time, prices being reduced but still no buyers. A lot of it is down to high mortgage rates due to the wretched Truss.

How on earth can people ever retire if they still have to pay mortgages? Seems wrong - banks are ripping people off by the sound of it.

It's linked to the interest rate set by the Bank of England. We also have Building Societies so there is more competition here. Your interest rate is currently lower I think.

What an awful dilemma. You must put head before heart here and get sound financial advice pronto! CAB could help with that. In the meantime paying the mortgage MUST be a priority and cutting up your husband’s credit cards, if you haven’t done this already….
What work issues? Is he or isn’t he working?

After our divorce, we shared our assets 60/40 I got the large family home and some savings. I sold the house, moved to a smaller house with a manageable garden. Despite my qualifications, I had not worked, and hence no prospects of a decent pension, so the Court ordered that he pay me alimony. which my Solicitor, forgot to have inflation-proofed. Where was GSM when I needed her 20 years ago ?
OP - downsizing is your answer.