Mortgage Doctor

A: If you are beginning to struggle with your monthly commitments, you should always speak to your provider to keep them informed of your circumstances. This will allow them to work through any options that may be available to support you. If your current mortgage is on a capital repayment basis, one solution could be to switch to interest only, which would reduce your monthly payment. However, remember that you are not repaying any of the capital off your mortgage balance whilst you are paying interest only. Borrowers that pay interest only for anything other than a short period should have a repayment vehicle in place, such as an ISA ,endowment policy or some other type of investment plan, to repay the mortgage loan at the end of the mortgage term. Free, impartial guidance is also available from a number of other organisations, such as the Citizens Advice Bureau.

Q: Our current deal is due for renewal, but our circumstances have changed since we last applied for a mortgage. My wife is newly self-employed, and doesn’t have much in the way of accounts to show to lenders. Any advice on the deals we could get would be much appreciated.
P.K., Hetton-le-Hole

A: It is not unusual for individual circumstances to change but you are right to flag this early on in the remortgage process.
There are mortgages available to self employed customers, however, as with all mortgages, your overall financial circumstances would need to be taken into account before a decision can be made. With the increased rate of change in the mortgage market it’s important to spend some proper time doing your research.
Don’t just stick to comparison websites. Some deals are only available direct from the banks themselves, so it’s a good idea to check out deals with the major banks and building societies directly. It is also worth investigating to see if lenders are offering exclusive mortgage deals online. You may also want to contact an independent mortgage specialist who can advise you on the whole of the market as advice can be crucial when looking to remortgage. Bear in mind that they may charge you for their time but their advice could be crucial when looking to remortgage.

Q: My sister and I took out a joint mortgage to buy a house four years ago. After a year I moved in with my partner and we found a lodger to take over my room and contribute to the mortgage. Now the lodger has moved out and my sister wants me to start paying half the repayments again but live in the house on her own. I want to sell, but she doesn’t. Can she do this?
M.H., London

A: This is a difficult situation, particularly as it involves a close family member.
If the mortgage for the property is still in joint names then there remains a joint responsibility. A decision needs to be made regarding the future of the mortgage and ultimately, the decision will need to be mutually acceptable between both parties. It seems that, broadly speaking, there are three options available.
1) sell the house and distribute the funds between the two parties as agreed
2) transfer the house into your sister’s name. Your sister would be responsible for the ongoing mortgage payments and you would receive your share of the capital
3) continue to jointly contribute to the mortgage.
It may be worthwhile sitting down to discuss these options in more detail and to seek legal advice.


Q: My parents want to sell their home and move closer to me. They have no mortgage on their existing property and have it on the market, but there have been no offers yet. They’ve found somewhere they’d like to move to, but they don’t know whether they should wait until their house has an offer on it before they make an offer themselves. What’s the etiquette here?
L.T., Suffolk

A: The estate agent selling the property your parents wish to buy may not accept an offer from someone who hasn’t yet sold their own property. It may be worth discussing this in more detail with the estate agent to get a better idea of the options.
It may be possible for your parents to  raise sufficient funds to buy the new property before selling, but this carries longer term risks, particularly if they struggle to sell their current property. Your parents should seek advice from a mortgage adviser who can help find out more about their needs and help find a mortgage that is best suited to their circumstances. They may also want to contact an independent mortgage specialist who can advise them on the whole of the market. Bear in mind that advisers may charge you for their time but their advice could be crucial in making the right decision for your parents.

Q: I have a mortgage which costs £800 a month. Over the past 18 months I’ve had to reduce my working hours and I can’t pay the mortgage until I go back to work full time. I’m worried that I won’t be able to pay my mortgage. Do you have any advice?
M.J., Swansea

A: It is worth continuing to talk to your lender as it is always best to discuss financial difficulties directly with your lender in the first instance and remain in regular contact with them. In addition, you may wish to seek advice from the Citizens Advice Bureau who can give you free, impartial guidance.

Cyrille Salle De Chou is head of mortgage acquisition at Halifax.
To hear more from the Halifax Mortgages team, click here

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Date: 18th, June, 2009	Author: Ben Wilkie

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