Cannot repay interest only mortgage at end

ukclare

What do we think a Judge would do - immediate repossession or grace period???

Radionotme

A grace period would probably be more likely if they'd already taken steps to sell the property. By the time the hearing came around, they could potentially have several expressions of interest and the bank would likely be keener on not having to do all the legwork of repossession and selling if there was a chance it would happen within a couple of months anyway.
But I'm no expert, that's just my common-sense view!

Thrugelmir

ukclare wrote: »

What do we think a Judge would do - immediate repossession or grace period???

A grace period will be allowed. Though the mortgage interest will still be due, and they will be liable for costs. So better to try and sell the property before it reaches this point. Speaking to the lender may gain some extra time.

ukclare

Thanks so much for the feedback

A grace period would seem sensible by the bank - I will have to get my friends to put pressure on any agents they use so that they are quite a way through the process when anything happens.

I am sure "oh, we've just put it on the market" won't really wash with Judge!

I hope they are going to settle for a "reasonable" price for the house rather than what they thought it was work pre-recession. The costs will keep adding up and may even outweigh any extra money they hold out for!

InMyDreams

ukclare wrote: »

They were hoping that property prices would rise

But they have! Exactly when was this mortgage taken out? It must have been a very short term if prices haven't risen since they took it out. I would double check that it isn't just the current rate that finishes in a few weeks. Maybe your friends are confused?

Not that this still isn't a serious problem for them. They still have to find £115K from somewhere, but they may have more than a few weeks before the repossession ball starts rolling.

ukclare

No - it's definitely the end of the line!

dunstonh

I don't believe there is any extra equity anywhere.

Which also suggests they have borrowed further against the property a number of times to eat away that equity that occured during the house price rises.

Basically they should get the house on the market now and be prepared to move into rented accommodation.

maninthestreet

When was the mortgage originally taken out? Have they borrowed extra money as the value of the property increased? Assuming it was a 25 years mortage, any property worth £115,000 25 years ago would be worth a lot more than just £140,000 now.

Bosworth

Perhaps your friend should also be concerned about a potential fraud charge? I suspect they would have committed as part of their mortgage application to find a way to pay off the capital. Not doing so means they obtained money by deception.

I'm pleased everyone is sympathetic to these idiots. What this economy really needs is to continue to bail out the !!!!less. I'd be personally delighted to contribute to their cause - can you give me a charity number I can contribute directly? Far more efficient than doing it through the tax system and I could actually claim some tax back myself!

ILW

I think this may be a wind up, the OP seems to not want to answer any questions about when the mortgage was taken on.