Releasing the value of our property

BScotGlasgow

My wife and I had planned to sell our flat, pay off our debts and emigrate.

However, with the slowing market, our flat is now proving difficult to sell.

Even accounting for the downturn, it should still survey at £90,000 (it would have been (95-100,000) at the turn of the year. We have it on the market at £85,000 and are prepared to accept less.

My question is: if selling proves impossible, are there any re-mortgage or loan options that would give us a lump sum, secured against the property, and allow us to move on?

One problem is that I am currently out of work due to ill-health. On the plus side, the mortgage was only ever calculated against my wife's income, which has increased slightly in the time of the loan.

The mortgage is for £33,000, with £28,000 outstanding on that. We have other debts, not including student loans, of £12,000.

We are quite prepared to "take a hit" financially, though obviously we would like to get the best deal possible.

Though we would prefer a clean break could there be some option, for example, to negotiate an interest-only mortgage and let the property?

Alternatively, would there be an option to get a secured loan to a portion of the equity? Any suggestions would be gratefully received.

We are both just under 40, living in Scotland and have a good record of keeping up with repayments.

lisyloo

There are several options open to you

1) Drop the price.
2) Increase the mortgage. However buildings insurance may be tricky on an unoccupied property. There is no reason you can't increase the mortgage but it will obviously be limited by your wife's income.
3) Get a BTL mortgage are rent it out. A BTL mortgage will be a higher rate than a residential mortgage. The rent may not cover all the outgoings so you may have to subsidise it (so you have to compare this with 1). On the plus side a BTL mortgage is based on the rental income rather than personal income.

You would need to do some more research into this e.g.
1) what will your property sell for? (talk to estate agents, look on net house prices).
2) will it rent? if so what for?
3) what will a BTL mortgage cost? and how much can you borrow?
4) what will be the subsidy on a BTL mortgage after repairs, maintenance, insurance, agent fees, income tax etc.
5) How much can you borrow on a normal mortgage?
6) Can you get insurance? If not is there a solution e.g. a friend occupying it one day in 30 so it's not left unoccupied for more than 30 days.