At the end of interest only mortgage?

lky2k23

I have 20years left on my interest only mortgage.

It is a leasehold flat and I only have about 70years left on the lease at the moment so am looking at extending this.

However if i decided to not exetend this what are the implications at the end of my mortgage period - I doubt I would be able to get a mortgage without extening the lease, I cant just walk away from the property can I? I would like to just walk away from it

Property value at the moment is a bit higher then when I purchased it.

antrobus

When you took out the interest only mortgage on the leasehold flat, how did you plan on repaying the mortgage? Has anything happened since that has caused you to revise that plan?

lky2k23

I have been saving but I would like to use this money for something else rather then this property.

Jimbo1976

Your mortgage will still be outstanding if you extended it for long enough (highly unlikely) and you reached the end of your lease. Leasehold property values tend to fall as the end of the lease gets closer. Most mortgage lenders want there to be at least 35 year left at the end of the mortgage period. So that gives you about 35 years to pay off your mortgage.

As antrobus says above, you really need to get cracking on sorting out how you are going to pay your mortgage off. You can't rely on capital appreciation.

geoffky

Your not alone...you and very very many others have done this with no real way of paying it back unless you make yourself homeless...A ticking time bomb..

lky2k23

Long term I would like to move to a house and rent the flat out indefinitely.

beecher2

lky2k23 wrote: »

Long term I would like to move to a house and rent the flat out indefinitely.

You still need a plan to pay off the actual debt.

ScotlandM

Can lky2k23 just give the house to the bank as payment for the mortgage?
Or put the house for sale near the end of mortgage and pay of the debt that way? I have friends that took out an interest only mortgage, they're not good with money and don't know much. And from my questions neither do it!
Thanks

lky2k23

ScotlandM thats what I was hoping.

TonyMMM

ScotlandM wrote: »

Can lky2k23 just give the house to the bank as payment for the mortgage?

And the bank will auction it off for whatever they can get and come after Iky2k23 for the difference (+ their costs), and trash his credit record in the process.

grey_gym_sock

yes, handing it back to the bank is a bad idea. selling it before the end of the mortgage is much better. but it still leaves 2 questions:

how much would you that leave you after paying the mortgage off? remembering that, if you don't get the lease extended, its value will be significantly reduced, and fewer buyers will be interested.

and where would you live then?