Urgent mortgage advice needed please

gumbo07

Hi there,

I currently own a property jointly with my husband. The house is currently rented out to tennants. They have just given 1 months notice to move out.

We want to sell the house, however cant afford solicitors fees etc etc. Neither can we afford the mortgage whilst its selling and/or looking for a tennant. Clearly no tennant will want to move in if they know its for sale.

Does anybody know what our options are please?? Ie. Is there anyway of arranging with the mortgage company to give them the house back before they repossess???

Any advice from anyone would be great thanks

Senior_Paper_Monitor

What is the current status of the mortgage (i.e up to date / in deal period or SVR etc)?

What is the condition of the proeprty in terms of attractiveness to rent ?

What is the rental income compared with the mortgage outgoing ?

Is you inability to support the mortgage short term just because of the tenant leaving or because of wider financial problems ?

Frankly letting out houses these days is rather like falling off logs in most locations ?

gumbo07

Hi there

The mortgage is up to date, never missed a payment and next payment is due the 2nd of next month, other outgoings for the house are insurance and boiler cover, rental income is £450 a month, mortgage is £470 plus the other bits so we have to cover £50 a month towards everything at the moment, obviously £500 at the begining of next month.

We simply havent got the money to cover the mortgage if someone isnt in it, we have wanted to sell it for a while but the only thing stopping us has been the fact that if our tenants were not in it we couldnt pay the mortgage, a catch 22 really. We could try and get some more tenants in it but even if we only have 1 month without any we will start to fall behind and like I said we want to get rid.

How much does it cost to sell a house these days as in solicitors fees etc?

I dont want to talk to the mortgage company yet before we know what our options are, have spoken to the CAB and they seem a bit vague as to what we should do.

How long to you have to be in arrears for before the mortgage co start repossesion proceedings etc.

Thanks

DannyboyMidlands

I don't even understand why you are renting it in the first place. It's not making you any money and sounds like a total liability.

Do you have a proper BTL mortgage on it?

How much can you realistically sell it for?

Why not just sell it and pay fees by credit card, then clear the cards with the proceeds from the sale?

What's the outstanding mortgage?

Senior_Paper_Monitor

I should also have asked - size of mortage and real value of property (priced to sell ) ?

My line of thought is similar to Dannyboy's but probably a simple overdraft everything else is cool and there is some equity to settle up afterwards.

Gorgeous_George

Selling could take months. What is the local market like? Would it sell and leave you a profit/breaking even/in debt?

Is the mortgage interest only? If so then you are losing money. If it is repayment however, you are making a profit as the asset will be yours one day.

I would get it advertised to rent. Make sure you are asking for the right money. If you have been getting £450 could you get £475 next time or would £425 get it rented quicker? I take it you rent it privately (no Lettings Agency). This will buy you time.

If you decide to let the property, be prepared for tenants to give notice. It is their right and you should plan for them to do this at the most inconvenient time to you. I try to time fixed term tenancies to end at a time of my choosing. One of my ASTs ends in December but I intend to ask my tenant to agree a new 12-months tenancy in August. If she chooses not to I will half expect her to leave in December. If it goes 'periodic' I shall increase the rent to cover my additional risk. Of course, the rent needs to remain competitive but I have plenty of room to increase the rent and remain competitive.

GG

GG

gumbo07

Hi and thank you for your replies
We dont have credit card facilities to put solicitors fees etc onto, I do have an overdraft facility.

The mortgage currently stands at £83,500 we would probably get £80,000k for it, we bought it for £92,500!!

If we could pay the fees to sell it we are still left with the mortgage which we cant cover and noone is going to rent it when its up for sale, as someone said we want to sell it because it costs us!!

What will happenin the meantime if we try and sell it but not pay the mortgage?? Will they start repo action after a certain amount of time etc??

DannyboyMidlands

When did you buy it? What circumstances have changed since then? I don't understand why all of a sudden the numbers don't work. Did they ever?

gumbo07

Yes they worked - we now have a child and I dont earn the wage I used to. We bought it in 2007.

DannyboyMidlands

Oh, ok, so the problem is just that you don't have any spare money to cover void periods etc and all other circumstances are the same?

In that case why not just use your overdraft to pay the mortgage for now and continue to rent it out?

holly_hobby

Hi ..

Usually 3 mths arrears is the initial tipping point for the lender - why not have a chat with them and see if they can offer you any flexability. (presuming they know its rented out)

As stated earlier, how quickly your property will sell depends on lots of factors - a consideration for a quick sale could be putting it for auction (with a reserve of course).

Or, this may sound a bit simplistic - but have you considered moving back into it until its sold - I obviously don't know about your own housing arrangements, but you could poss rent your main residence (if owned) in the short term (AST of 6 months), with hopefully your other home sold in the meantime - and then you rtn to your main residence at the end of the AST.

Or if its rented, would you be prepared to end your tenancy (to obviously lose the associated rental costs), and again live back in your old house until its sold.

I know neither of the above may be ideal, but if the solultions already posted aren't possible, it could be another way of looking at things.

(as a side issue - if you live close to a university, have you considered approaching them to see if they will accept your property as student accomodation. Although normally only occupied in term time the uni usually rents for 3 yrs, with the rental income agreed spread of the 12 mths i.e the continue to pay even out of term time as a retainer. Of course renting to the uni may invalidate any basis of rental agreement you have with your lender - but again just some food for thought)

Hope this helps - and good luck

Holly