The Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review of 2014 saw the implementation of tougher lending criteria, particularly when it came to affordability and the criteria for interest-only borrowing. High street lender Santander has recently announced that it may have a solution for people ending an interest-only term who are unable to repay the outstanding capital.
The company says it will prevent people from having to sell their home to downsize, or worse, face repossession. If eligible, its mortgage would revert to an interest-only basis and reduce the monthly payments, meaning borrowers could retain the property.
Experts have, however, warned that deals of this nature should be viewed as a final option. Children’s potential inheritance is effectively being forfeited, so the implications should be fully discussed with families to make sure all parties understand.
Back in the ‘80s and ‘90s, interest-only mortgages were incredibly popular, as the monthly payments were considerably lower. However, they meant that unless an additional savings policy or pension was being paid into, the amount borrowed was still repayable at the end of the term.
The shortfalls have arisen where borrowers failed to save the money, or they chose a stock market-linked endowment that did not perform as anticipated, leaving a shortfall on the balance due. Santander feels that by offering those affected and eligible a lifetime mortgage, it may save some families from having to sell their homes or even face eviction.
Professionals who attend the appropriate CeMAP courses and achieve the required level of qualification are best placed to deliver the most suitable advice, tailored to each individual’s circumstances.