can i get an interest only mortgage without extra payments?

Question

building society wanted me to take out pension o other investment for interest only mortgage,my place worth 115k i want borrow 95k interest only then sell up and rent in ten years time can i do it and who with,,,,some lenders want high rates cos im usinmoney for paying off debt

Answer 1

you can get an interst only mortgage at standard rates contact leeds building society

Answer 2

As you may have noticed, with the Northern Rock issue and everyone very concerned re: 'sub-prime' lending, I'm not surprised that they want to know how you are going to repay the £95k ..

If you have kept up with your payments, your existing Building Society might be willing to extend your existing Mortgage & convert (most of) it into Interest Only ..

Even so, unless you have a Pension that's going to pay out a Tax Free Lump Sum of £95k (or have an ISA with 95k in it) - or have other assets you could sell (eg. buy-to-let property) most lenders will be very reluctant to agree Interest Only Mortgage beyond LTV of about 75% ..

So for a 115k value property you SHOULD be able to convince your existing lender to convert 75% (£86k) to Interest Only ... leaving the rest (9k) as a normal Repayment Mortgage...

The other choice is to get some-one to sign as Guarantor, or (if you are older than about 55 & really can't afford the repayments) to consider pre-selling the house to an Insurance Company = these are known as "Equity Release Schemes" .. or (as I call them) Equity Release Scams .. they are usually a VERY POOR DEAL .. you essentially wave good bye to the house now and either get half (or less) of it's market value AND pay rent until you die or you get no money at all but live rent free (you still have to insure & maintain the property & pay Council Tax etc)

Answer 3

Simple question. And the simple answer is yes. Do not take out savings plan to pay back the loan as this is not your plan. However be advised that if your plan changes you may have to pay more to save over a shorter period. If your building society will not lend you the money without a policy to back it up then try another. It is not bad advice to have an interest only mortgage but you have to be careful. Speak to a mortgage broker and ask their advice. They will charge you for arranging a mortgage but this should not be for more than £300.

Good Luck