Mortgage closure

Leila09

We have a joint interest only mortgage of 100k on an empty home valued at 230k, I informed my mortgage company that I was looking into turning it into a care home. Now they have told me that I need to find another lender. I am not in breach of the agreement and have not missed any of the monthly payments therefore can they insist on this if I'm not running a business merely looking into it. Please help. Thanks

catieeb06

They can't insist on it, however if they suspect that you might be doing something they will pay close attention to your mortgage.

If you were to do something like turn it into a care home you would need to look into commercial finance.

Simon_gloster

When you signed up to it was it a in residence? If so thats the contract.

There is also the insurance element, should you get some form of commercial insurance they may inform your lender and they may take a long old journey to ensure they have nothing to do with it.

Should you go through th proper channels you'll have no problems.

If its a case of ' on a good rate, on interest only' dont assume lenders will be lenient if they find out.

Leila09

I understand that if I were to proceed this then I would go for a commercial mortgage so in the meantime as long as I continue with my payments there is nothing they can do even though they've given me until next month to repay them. I do have another property worth 130k with a 25 k mortgage which can be remortgaged to pay off some of the 100k but dont want to do this just yet or I'll have early repayment fees on the 25k. I am in process of writing to them to say that I'm not looking to change lenders as I'm not in breach, do you think they'll accept this? Thanks

Simon_gloster

If you have told them its an idea and thats all, then all they will do is add notes to your account....no more.

Its only when you or a 3rd party inform them will start to monitor closely.

Who is the lender?

Leila09

RBS are the mortgage providers. I shall continue as I am and see what happens. Thanks for all of your replies

Thrugelmir

Leila09 wrote: »

I am in process of writing to them to say that I'm not looking to change lenders as I'm not in breach, do you think they'll accept this? Thanks

If the property in question is empty and you own another property (which is presumably your main residence). Then the RBS could take the view that it is not being used for the purpose the original mortgage was applied for. So yes in breach of the mortgage conditions.

Leila09

But if I was to move back in then I wouldn't be in breach? The property is on the market and has been for 4 years and the proceeds from the sale were meant to be used to pay off the mortgage.