However, after the financial crash of 2008, it quickly became apparent that these mortgages were too good to be true. Interest-only is now the mortgage that the financial industry has labelled a ticking timebomb, and it's estimated that 600,000 interest-only mortgages are due to expire by 2020.
There have been a number of warnings from industry experts about interest-only mortgages in recent years. Earlier this year, the main UK regulator the Financial Conduct Authority (FCA) said it was “very concerned that a significant number of interest-only customers may not be able to repay the capital at the end of the mortgage and be at risk of losing their homes”.
If you have an interest-only mortgage that is also in negative equity (meaning that the value of your home is worth less than the value of your mortgage), you have an even larger problem to deal with.
But what does all this mean for you? Well the first thing we would ask you to do is consider these four questions.
Government research shows that more than half of all interest-only mortgages where approved without the lender asking for proof of income and outgoings. These are were known as 'self-certified mortgages'; where the banks accepted the customers declaration of their personal income and expenditure without conducting the correct due diligence. In many cases, the banks also sold mortgages without setting out a repayment plan with the customer.
Nothing beats the feeling of buying your first home, a place to start a family and look towards the future. But as your family grows, you may have found your home becoming too small and have realised that you need to move.
Are you one of the tens of thousands of homeowners in the UK who were sold an interest-only mortgage without any real plan for paying it off; such as having an ISA or Investment Bonds?
Finding yourself in a situation where you have to sell your home, due to marriage breakdown for example. The market can be turbulent and if you're home is also in negative equity you may be worried that you'll have to sell at a loss.
If you answered yes to even one of these questions, it's going to be difficult for you to solve the problem on your own. You are likely going to need expert help and advice from specialists that have significant experience negotiating with mortgage lenders to arrange more suitable mortgage terms and shortfall write-offs. That's where Negative Equity UK come in. We are the only specialist negative equity and property debt company operating in the UK that is authorised and regulated by both the Financial Conduct Authority and Chartered Accountancy Regulatory Board.
You could be eligible for a mortgage debt write-off of up to 95% of your negative equity shortfall. This is a common outcome for our clients with interest-only mortgage problems and negative equity. Getting your lender to write-off a significant portion of what you owe them isn't something you can simple ring up their call centre about and request. But it is a professional negotiation that we can conduct on your behalf, and something we do everyday for our clients with banks, building societies and other lenders/debt agencies.
Experience has taught us that negative equity debt on interest-only mortgages is only part of the issue that our clients face. You may also be concerned about the lack of information that is out there about your situation, and indeed its impact on your ability to access credit in the future.
Our goal is to help you move forward in the way that you need too; solving the issues that surround your interest-only mortgage and negative equity debt. We go the extra mile because we want to make a difference. That’s why all our staff are trained to be non-judgemental and to act in a manner that is compassionate and respectful. If you choose to work with us, your dedicated adviser will keep you informed every step of the way and do their upmost to take the stress and worry out of the situation for you.
We’ve helped hundreds of homeowners move on from negative equity and mortgage debt, and we genuinely want to achieve the best possible outcome for every client we work with. Don't wait for your property debt issues to solve themselves. Contact us today for a free initial consultation.