Mortgage worry - NRAM

beckandsimon

We have a 100% mortgage on an interest only basis with what is now NRAM. We have a tie in til June and until that ends, we are unlikely to clear the mortgage debt. I've just been made redundant. My Husband is in full time permanent employment.

We knew redundancy was on the cards and therefore considered renting. We managed to find propspective tenants and arranged with my parents to live there rent free for six months or longer as needed.

I've only now read the form NRAM send out if you want to let out your property. It stipulates we have to achieve 120& of loan to value amount to rent out the property.

This would not be achievable in our property in our area. We can only achieve about £650 whereas our mortgage repayment is a little over £800 to NRAM each month. We had thought that the other £150 or so could just be paid by us.

All this has come to a head tonight as I've read the forms. I am really really upset as all I can see now is the house being repossessed which is what we wanted to avoid. I plan to call NRAM tomorrow, but I wanted advice/views as to the likelihood of any positive response from the bank about renting out with a shortfall.

Please respond. Many thanks.

Thrugelmir

How much is your negative equity?

There is a great danger that property prices will fall further and that your NE will increase further.

beckandsimon

We owe about 160k now and property worth about 155k. HOwever come June we SHOULD be about even.

dorrellm

Nram will probably allow you to rent your house out for a year for approx 250 quid had the same problem but they are being more lenient on there criteria you should apply and see what they say

beckandsimon

Dorrellm, thanks. Is yours with NRAM?

Thrugelmir

beckandsimon wrote: »

We owe about 160k now and property worth about 155k. HOwever come June we SHOULD be about even.

Are you hopefull of finding employment soon?

Letting property has its pitfalls. House still requires maintenance, tenants may default on rent payments etc..... Not all plain sailing.

Interest rates will rise. Quite possibly this year.

You need to weigh your options up carefully. The downside is considerable.

beckandsimon

Also, when I call will they need to know all the ins and outs of credit card/loans etcs?

beckandsimon

THRUELMIR - despite your negativity, I am up beat about finding work. We are on a fixed rate til June so no rate rise will affect us til after then. Any repairs would need to be done whether we lived here or a tenant lived here - we have two young children so it has to be safe and in good order. We can get landlord insurance for £13 per month to cover defaults on the rent, damage both accidental or malicous by tenants or others and it also covers the building insurance/cost of it being rebuilt.

In my view, the negatives are far outweighed by the positives.

hcb42

is it worth going through allthat upheaval for six mo rent? If you are upbeat about a new job? I only ask as it is a heck of a lot of stress, and not a massive return

beckandsimon

Well I'm thinking six months rent is over 3 1/2k which I think negates our stress. I should say that back in Nov when I contacted them about possibily renting out the property, they said we woudl have to complete a form for it to be authorised, but didn't give the impression they were tyhis many hoops to jump, if you know what I mean. Therefore since then, we've been packing and throwing out stuff and got stuff stored with my parents too. We'll be able to go down to one car and crucially (we live too far away at the moment) the child care for when i return to work will be free for a while (my parents) so all in all I honestly think the little stress it will cause us will be worth it.

Gotta say, if I seem defensive, I'm sorry, I appreciate all your replies, I really do. I'm just so low tonight and appreciate any views on how the bank are likely to be towards me etc.

hcb42

not defensive at all, i am just trying to remortgage and got lots going on and that is bad enough on the nerves..but if it gets you out of a hole, then that's a good thing