Q. I am thinking of downsizing my property due to the fact that I have been on an interest only mortgage for way to long and as the years advance worry that ultimately I don’t have any vehicle in place to pay off the loan when the mortgage expires. Do you think I am doing the right thing?

A. This very topic is on the minds of many people right now and a product of the financial chaos that self cert mortgages has produced from the hey days back in 2007 when Lenders were happy to lend any amount to any individual regardless of whether they could afford it or not as no proof of salary was required.

Mark Hayward, president of the NAEA, said:  “Downsizing was once something done to free up funds of homeowners approaching retirement. It is now an option being taken by homeowners of all ages who can no longer afford to pay the mortgage. “

In a time of economic uncertainty, downsizing can make a lot of sense, especially for anyone who has an unused spare bedroom, or whose children have flown the nest. On the other hand, if you really wanted to stay and you have one or more spare bedrooms why not utilise that space and rent out the rooms to lodgers – the rent received could go towards reducing the size of your mortgage. Many home owners that still need to retain the same size of property but need to reduce their mortgage are choosing to move out a little further to reduce the cost of the mortgage, the further out of Town obviously the cheaper the properties become, of course this will impact traveling to work but maybe the weight of a large mortgage being lifted will be worth the extra journey time? Ultimately the mortgage will need to be paid off at the end of the term and something needs to be in place to secure this otherwise moving really is your only option. Some Solo Homeowners choose to transfer the ownership over to a joint mortgage with a son or daughter, or maybe another family member this again will give your further options but the Lender will require proof that the joint applicant is able to meet the repayments and a legal transfer will also be needed to ensure their name goes on the deeds too. Of course if this is done the term could also possibly be extended as they will likely qualify to repay over a longer period. Being a home owner is serious business and taking responsibility is crucial. Speak to your current lender or ask your Estate Agent if they can recommend a financial advisor, they can approach all the financial institutions on the high street and are not tied to one product like a Bank or Building society will be, they may have some other options that are worth considering too.