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  • Debt & Negative Equity

    Buy to Let mortgage term expiring - options?



    I have a buy to let property which has given me a good income for years. 

    Unfortunately the term finished 5 months ago and the mortgage company refused to extend the term due to a bad financial time I had for a few months over a year ago when in a few properties left, my 18 year old and 19 year old were out of work, my husband had left me and I was supporting and caring for my Mum who has dementia.  It was a tough time and I nearly lost my home. 

    Back on track now, children got good jobs, Mum's got carers and I am up to date with the mortgages. 

    I only have one month to go until the flat will be repossessed, I had to let the tenant go 5 months ago to sell empty. 

    I don't have much capital in the flat and yet I received a good income from it.  I have had to drop the price and I am worried as I only have one month left.  Any ideas anyone, I cannot afford to lose this income!

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    I am sorry to hear of your plight.

    I can suggest three options for your consideration:

    1.  If you contact the PT Brokers Team on 0333 363 6507, and explain your situation, they may be able to match you with a lender with less strict criteria.

    This would be a like-for-like remortgage, but if you do not have a lower enough LTV, then it might be impossible to do this.

    2.  Contact Landlord Debt Advisory on 0161 222 4311 and they may be able to negotiate on your behalf to give you more time to find a re-mortgage or to sell the property.

    3.  Contact the Financial Ombudsman on 0800 023 4 567 and ask for their assistance.  They may be able to delay the repossession a bit longer.

    If none of these work, then your final option is to sell to a cash buyer before the repossession, but you will need to sell at a discount of around 15%.  I know a reputable professional property buyer who helps in these situations and can put you in touch with him if you email me at vanessawarwick (at) icloud.com.

    As I am sure you are aware, if the property is repossessed, it will be sold as at a "fire sale" price and any shortfall on repaying the mortgage will be liable to be paid by you as an unsecured debt.  That is why selling to a cash buyer and controlling the sale is better than allowing the property to be repossessed.  If you get a guaranteed sale, and there is a bit of a shortfall on the mortgage redemption, you may be able to negotiate a debt write off.  This is something Landlord Debt Advisory can assist with as well.

    I hope that helps and please report back here how you get on.  Good luck!

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    My situation at the moment..... I had to get rid of my long term tenant as the estate agents said it would easier to sell without a tenant.  Unfortunately the market is flat at the moment and I have dropped in price but it is still not selling.  More people wanting to rent than buy.  So I contacted the PT Brokers Team regarding remortgaging but I was told that mortgage companies like to see it tenanted for at least a month.  There is also a brokers fee of over £800, money which I don't have as I have had no rental income for 5 months which has left me without any spare cash.  This is for buy to let mortgages and has to be paid when the mortgage is signed and cannot be added to the mortgage amount.  Oh my, it seems like a never ending spiral of rules and regulations which doesn't help small property investors trying to make an income out of buy to let.

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    There for the grace of god

    i would imagine you are on interest only otherwise you would have a small balance ?

    if there was ever a good reason to have capital and repayment you have highlighted it today

    best of luck

    Dl

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Yes, all my mortgages are interest only including my home Sad   Ouch!

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    Hello Louise,

    If you'd like to get in touch (direct message, text, call) I'll see what might be available to you mortgage wise.

    If would also be good to see your credit report to check how/if that has been impacted.

    Regards

    John

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    You can contact me via Direct Message, or 07788 219647 or call the team on 01206 654444 for personalised quote and advice


    Hi Louise,

    That sounds that a cumulative bad time I'm sorry to hear your mother,  it's really awful, I have it with grandparents on both sides of my family.

    If you have enough equity in your property, you may be able to refinance with an adverse credit mortgage lender. There are not many about and the mortgage rates are not great but there are options available via a good mortgage adviser.

    Other options may include, selling it on the open market? or to your children?

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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


    _________________________________________________________________________


    If you cannot afford to lose the income then you need to find a way to remortgage it. If you sell it then there is CGT to pay and if you are dropping the price I suspect that the eventual cash you release will not replace the income you have lost in the short term.

    I think you need to see if you can get another mortgage, find a friend to co-invest and so get a half way house, reduce the mortgage size to make it easier.

    One idea we often use when we are dealing with challenging situations is to see if the residential home can be used to swap borrowings onto a cheaper rate. Some lenders will take BTL income into account when assessing affordability. The tax deductibility will be unaffected as it is not based on security address (I am a tax advisor as well as a broker).

    Please contact me (stuart@johnsonsca.com or 0203 907 7022) if you wish to discuss in more detail.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022