Mortgage Options

Ashs

Hello

I have a mortgage which is on an interest only basis. I have 19 years left to run and currently owe £140,000.

My current monthly payment is £285 a month and I rent the house out for £600 so clear around £315 profit which I use to help pay the bills in my current house.

What options do I have as I am nervous that in 19 years I will still owe £140,000 and if house prices are similar around this time i'll have £40k of negative equity.

What can I do about changing my mortgage as I have no money to put as a deposit to change mortgage over and I am told I won't get a repayment mortgage on the property currently as its worth less than i owe.

What can I do?

Thrugelmir

Ashs wrote: »

I am told I won't get a repayment mortgage on the property currently as its worth less than i owe.

Who told you that?

The rental profit is taxable. So be warned. Fines for self assessment are severe. Let alone the back tax with penalties and interest.

Ashs

who told me what?

I understand the tax implications but this doesn't answer my question.

GMS

Are you on a Buy to Let or do you have Consent to Let? Do you have either?

Thrugelmir

=Ashs;59211211]who told me what?

As before. This

I am told I won't get a repayment mortgage on the property currently as its worth less than i owe.

Ashs

I have a consent to let from lloydstsb.

It was lloyds who recently told me they can't do a repayment now over the phone. Is this incorrect.

What options can i do

[Deleted User]

Can't you overpay on your existing mortgage?

Or you could start savings to pay towards the mortgage when you are permitted to make overpayments.

Thrugelmir

You wish to make a single lump sum one payment ?

I assumed that you wished to change the mortgage onto a repayment basis from interest only.

Ashs

Yes T you're correct.

I want to change to a repayment mortgage but don't have any money to put back into the mortage as a deposit.

Basically in 19 years i will still owe 140k, what can i do now to help things

Thrugelmir

Ashs wrote: »

I want to change to a repayment mortgage but don't have any money to put back into the mortage as a deposit.

Suggest you book a meeting in branch and have a face to face conversation.

There should be no issue. You don't require a deposit.

Batsman81

Ashs wrote: »

Yes T you're correct.

I want to change to a repayment mortgage but don't have any money to put back into the mortage as a deposit.

Basically in 19 years i will still owe 140k, what can i do now to help things

Hi,

Why don't you just make overpayments every month through standing order. Most mortgages allow up to 10% of outstanding balance every year - you will need to check the fine print. If you decide how much you can overpay monthly, you can set up a standing order to overpay the mortgage. Just ring the lender and ask for the S.O details.

Also, as you know the rental profit is taxable, so the ideal thing to do would be to use the profit from this house to overpay on your main house. This way you will not increase your tax liability on the rental house.