Urgent mortgage advice needed please

gumbo07

We want to sell it.

I could use the overdraft to pay 5 mortgage payments but then wouldnt have any cash to pay solicitors/estate agents fees and also thats if we sell it within 5 months.

Gorgeous_George

Only you can make the decision.

Selling realises the losses. Not necessarily a bad thing if prices continue to fall. Selling will realise the loss in house price, EA fees, legal feesm nortgage redemption and any early repayment penalty that may be attached to your mortgage. Add to this the mortgage payments for 3 months, 6 months, a year, 2 years :eek: and you can see that yoiu could lose a lot of money.

Rent it and you lose £50 per month (but if it is a repayment mortgage you will be reducing your mortgage debt). (Normally) rents rise over time. In 5 years (2016) you could be making a healthy profit if the rent is £525 - £550. On the down side, what will your mortgage be by then? No-one really knows the answer but I do not support the popular view that base rates will be rising in the near future.

So, the choice is to bail out now and make a significant loss or hold your nerve and let the property to new tenants. If you choose to let it, make sure you do it properly, look after your tenants and decalre your profit/loss to HMRC. Make sure you have consent to let.

Or move back into the property.

Finally, if you want to sell, why did you let it in the first place?

Good luck with whatever you decide.

GG

ado

gumbo07 wrote: »

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!!

How are you going to cover the negative equity? At the moment you owe £3500 more than the house is worth so you need to take this into account on top of solicitor's and estate agent fees. Solicitors could be around £500 and anything from £250 for an online e/a up to 1 - 2% for a traditional e/a. many online agents are paid up front but a traditional agent is normally paid in arrears from the proceeds of the sale. The solicitor will want to be paid upon completion.

Lastly if the house is repossessed and the proceeds don't cover the costs of the sale the bank will pursue you for the outstanding debt.