Lifetime Mortgage or Downsize

I’m so sorry I took a while to reply but it’s so lovely that you have all replied about this awful time for me . My mother has been ill so on top of dealing with this I’ve had that too . My husband had got into debt with setting up a business abroad with promises from potential clients & investing that never materialised. He was convinced it would work so spent on flights hotels taxis getting around convinced the money was coming in ! It is a form of gambling in my eyes . I had thought of leaving . But he has got a minimum wage job now . The house is worth about £675k . So enough if sold to buy a smaller property. We have spoken to equity release & they have agreed to lend us enough to pay existing mortgage & debt . We have also spoke to our existing mortgage company who are aware and are giving us more time to sort things . I don’t think they just toss you out on the streets like the old days but work with you to find solutions this is probably due to the new mental health protection that seems to be talked about so much these days . We have looked at our credit rating which is bad now & also the credit card debts are in my husband s name . I have personally never got in to debt even when I was a single mother bringing up 3 children . The whole situation had been very hard to deal with and I appreciate your advice so much . Thankyou 😥

I'm so sorry to hear that you have this problem, it must be terribly worrying for you. May I suggest you get some reliable financial advice from an adviser before you make any further moves. Your husband doesn't sound very reliable tbh and you need to get some sound advise from elsewhere. Good luck and I hope it all works out well.

Well we're making assumptions here but to still have such a huge mortgage in their sixties hints to me that the house is worth a great deal more than that.

Once they're of pensionable age (which OP is) there will be pension credit available.

It maybe seem unkind I agree, but there you go- if they finish up on benefits people will be far more unkind I suspect.

if they have lived in the house for 25 years and still have a £120,000 mortgage, depending on where they live, and what kind of house they have, they should have a reasonable amount of equity in the house.

However, if they have been in the house for 25 years and still have a £120,000 mortgage, it occurs to me that this is not the first time they have had to borrow to pay off debts. Yes, they could have built an extension or undertaken building works, but my instinct is that the OP's DH constantly running up debt is the main cause of the problem.

In most situations like this the problem is gambling. Whatever the cause, for this couple to have a secure aand stable future. The OP's DH has to stop doing whatever he does that hemorrhages money.

We don’t know what the downsize might be though - could be a flat. I certainly don’t assume they’re sitting on a big pile of money.

The OP does say We have 2 options to sell & downsize ( there is enough equity to do this ) Germanshepherdsmum.
However, the market is not good at the moment and they have reduced the price already.

We don’t know that they are sitting on a big pile of money. After the mortgage and the husband’s debts have been repaid there may not be a lot left - we don’t know what the house is worth. And as the husband has ‘work issues’, that may mean he’s actually workshy and may not get much by way of pensions. There is no suggestion that the OP has lived beyond her means. I find your post very unkind.

This makes very sad reading. To have lived beyond your means in this way is reaping the rewards, especially OPs tolerance of husband's feckless behaviour.
At 66 OP is now state pension age, but doesn't say if she is still earning or not.
Some sort of help may still be available. I wish I could feel sorry for OP, but somehow I don't, they are still sitting on a big pile of money there and may have pensions to come.

Auction the house, take half of what’s left and run, your DH is a huge problem

It is quite hard to get a mortgage here in the first place. They won’t give to people who they think will not be able to pay, especially not if they are over 50. Sometimes the annoying ‘nanny state’ stuff we have is actually to our advantage.

She's living in cloud cuckoo land.
Nothing will change unless she makes it happen.
I think matters will be taken out of her hands sooner rather than later though, it's very sad ☹️

I think the reason the OP hasn't come back is because we are giving her the same unpalatable advice that probably everyone else has given her - that until her husband curtails his reckless spending, there is no way forward.

We quite often get new posters who have various problems and come to GN looking for a 'get out of jail free' card, and who post once and do not come back for the simple reason that if only a 'get out of jail free' card will solve your problems, you can be absolutely sure that it doesn't exist.

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.

They move house, they borrow on equity, they haven't paid principal - merely interest. A better question might be "what is your equity now?

Please, please be very very careful about Lifetime/Equity!

My advice would be to sit down with your DH, go through everything with a fine tooth comb and stop using the credit cards.

Work out what the absolute minimum you can accept on your home, contact the mortgage company and the CC companies and be very honest about your finances.

Please get them sorted Asap however hard it is, now us the time to do this, before it is too late (I speak from a place of kindness and bitter personal experience!)

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.

Why? If people have mortgages extending past retirement it is because they have chosen to move house or borrow against the equity in their house and know that this will take their mortgage past retirement age.

I get fed up with banks and lenders always being blamed when individuals make bad financial decisions. In this case the cause for this large mortgag is whatever the husband does that runs up these enormous debts. The monthly interest he is paying on his credit card debt is probably enough, that without it they could have paid the mortgage.

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

The two main reasons the market has died is because of the long promised interest rates cuts that keep being delayed and will make mortgages cheaper and the election. The market has been inactive since March.

Our house has been on the market most of this year and we had viewers between January and March, but then the market just died even with a price cut. That was long before the football and school holidays

We have been studying the market in both our area and the area we want to move to, and nothing is selling and nothing new is coming onto the market except houses whose sales have fallen few

Sorry but couldn’t have helped you with your divorce - used a solicitor for mine.

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.

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?

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.

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.

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!

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.

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.

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.

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.