Help! Loan Expired, Lender Recalling Loan!

GM2012

I have an interest only loan secured against 2 commercial properties which produce a good income. The loan has expired but the bank didn't give me written notice before or are the time it expired and have been very underhand and unprofessional in their conduct. They are now saying that they want the borrowing repaid in full in the short term or they will repossess.

I have tried to remortgage but can't because noone is lending in the property market and it's unlikely I will be able to sell the properties because if I can't get lending, it's unlikely anyone else will.

Does anyone know where I stand legally or have any ideas what I could do?

KingElvis

I would seek professional advice from a brief who specialises in property.

[Deleted User]

GM2012 wrote: »

The loan has expired but the bank didn't give me written notice before or are the time it expired and have been very underhand and unprofessional in their conduct.

Surely they told you the term the loan would run for when you took the loan out? Or are you saying they have cut it short early for some reason?

somethingcorporate

I am pretty sure it would all be in the original contract as to what the term was.

How about you have a read and let us know what it says?

lolavix

It would have said in the original paperwork what the term was.

What means do you have of repaying the capital, as the loan is on interest only? Depending on LTV, you may need to consider switching to a repayment basis rather than Int only.

redpete

GM2012 wrote: »

the bank didn't give me written notice before or are the time it expired and have been very underhand and unprofessional in their conduct.

I would bet that they did give you written notice - e.g. in the Ts&Cs that you had when you took out the loan.

They are now saying that they want the borrowing repaid in full in the short term or they will repossess.

You mean they want the loan repaying at the end of the term that you agreed when you took out the loan. Has this really come as a surprise? What have you been doing since you took out the loan to ensure that you would be able to pay it back when the term ended?

<Now the OP has explained more of the situation - that the bank had said that a repayment mortgage would be available at the end of the IO period - I would not be so critical.>

geoffky

Here we go,,i expect to see tens of thousands of people moan about this because some of them (not saying the op was) did not understand what io really meant and will be shocked when asked to sell the house..or houses

skintandscared_2

GM2012 wrote: »

I have tried to remortgage but can't because noone is lending in the property market and it's unlikely I will be able to sell the properties because if I can't get lending, it's unlikely anyone else will.

Why? Perhaps the outstanding loans you already have make you over-committed. That isn't a problem everybody will have.

Apples2

I agree with geoffky, over the last few years people have been racing to switch to Interest Only on their Mortgage (credit crunch and all that). That roosters coming home with a bang soon.

somethingcorporate

Apples2 wrote: »

I agree with geoffky, over the last few years people have been racing to switch to Interest Only on their Mortgage (credit crunch and all that). That roosters coming home with a bang soon.

What a funny expression!

Just goes to show how financially illiterate the general populous is.

GM2012

Just to clarify, when I took out the loan I was fully aware of the term and was told by my business manager at the time that this was the maximum term for interest only but I would be able to convert to capital repayment at the end of the term.

I am not over committed. The LTV is around 65% and the 2 properties are producing a total income of £44k. The problem is that the bank I am with has pulled out of the property sector altogether and so have a lot of others.