mortgage advice

charlie01_2

Hi...

I need some advice on my current situaution.

I am renting out my 1 bed flat, through a letting agents, and have moved in with my partner, as I could no longer afford to live on my own, and it was better for us both.

The property is currently in negative equity. I have a residential mortgage on the property and have not informed the lender (Bank of Scotland) that it is being let.

The tenant has been in the property for 8 months and there have been no real issues. The tenant has now stopped paying the rent,and the letting agent is dealing with this, although there are rules and laws to be followed, this has caused major problems as I rely on the rent to cover the the mortgage payments, and I am now struggling to pay the mortgage and will be unable to meet this months payment!. I am thinking about handing back the keys to the lender as I can do without the stress it is causing me as I cannot sell the property, but am unsure of the lenders stance on a) the letting of the property and b) what is involved if I hand back the keys?

Can anyone offer any advice please?

Cannon_Fodder

a) Will vary by Lender. You may get asked to pay a £100 admin fee, or told to convert to BTL with a £3k fee and increase in % rate, or somewhere in between.

b) You will be pursued for the shortfall, when they sell it as a repossession, incur fees and costs etc, which could be thousands.


Don't stick your head in the sand. Talk to your Lender.

All property sells at the right price. Even if in negative equity, it may be more beneficial to sell it yourself, as you can hopefully command a better price as a "genuine" sale, rather than as a repossession with tape on the taps/electric/gas, etc, and avoiding the Lender's repo handling costs. Making the shortfall smaller, and therefore easier to repay - with a small personal loan, perhaps.