Ok so it looks like we may rent out our property but it won't cover mortgage

Trollfever

Cut your losses and run.

papermoney

Thanks for the replies.
Obviously I would love to sell and cut my losses but the property is not selling. The agent informs me that they are not selling any properties.
I could reduce it even more but I only have 15k to make up the short fall and costs - solicitors, redemption etc.
I bought for £133k just over a year ago. House was on at 150k but I got it knocked down as it was in a state.
Mortgage is 134K
I pay £883 a month
It's on the market for 129k.
I could reduce to £125k and try and get more money off the other houses equity but a similar house is up for 124,950 and the agent says it is having no interest.

What would happen if it got repossessed? The thing is - I can afford to keep paying at the moment - my wages do cover it but i go on maternity leave soon and it would be a struggle but I could do it. Just easier if I don't have to find the whole lot.

clutton_2

if you are going onto maternity leave and having to support a huge loss on a second house, as well as looking after a new baby - you are mad to even consider renting it out - dont just read the advice that YOU want to see on here - please take note of lynzpower in particular

if this is your second property could you sell the other one more easily ?

if there is such a huge difference between rent and mortgage NR will definitely not give you permission to rent - why would they sanction a liability - for that it what it is

papermoney

I can't sell the second property. The property we are trying to sell is smaller of the two and with the extending family we need to live in it. Saying that it is also on the market and also getting no interest.
The one we are wanting to sell is the more sellable one - according to the agents because of the area and school catchment area etc.
I know renting is not ideal but TBH i'm not sure what else I can do.
If I sell at 125k I still need to find nearly 20k to cover the short fall. There's nothing to say that if I do advertise it at around 125k there will be offers around that price and not receive offers well below the asking price. If I were a buyer i'd not offer the asking price.

poppysarah

44 months of paying £450 a month on top of the rent (excluding repairs, gas checks, damage etc etc) is 20k.

justpurchased

Can you release any equity from your other house so you can sell the second cheaper. Even though not ideal if you rent you will be loosing a fair amount each year like the poster above stated. If you hand the keys back you will be looking at owing NR a fortune.
A house will sell at the right price but you have to be looking a reasonable drop.

papermoney

Any shortfall will come from the equilty of the second property - we have looked into this and we can borrow another 20k on it.

neas

WHy have you got two properties anyways if you didnt BTL one?

Two people owned a house then moved into one when they came together?

Or bouht new house before selling old? (doubt its this)]


Just intrigued

justpurchased

papermoney wrote: »

Any shortfall will come from the equilty of the second property - we have looked into this and we can borrow another 20k on it.

Not Recomending but i would look to get shut of the second property and be prepared to drop it by the £20K and except you have your fingures burnt.
It just going to get harder and harder to get a mortgage on the second property if prices carry on falling.
And i presume £20K on your mortgage is cheaper than £400+ a month.

Microstar_2

Two thoughts:

a. It will cost you more than just the mortgage 'subsidy', there are additional costs to renting including agents fees (assuming you want one), voids, and of course maintenance (which is not cheap these days).

b. Notwithstanding the above, I can't see NR agreeing anyway.

I think you'll have to bite the bullet and drop the price to get shot of it. Allowing it to be repo'd is not a good option because they'll probably sell it for less than you'd get and then come after you for the shortfall anyway.