Bought house for 137,500 now only worth 127,500

Wi88le

G_M wrote: »

If the mortgage runs out, then that means it is paid off and finished. The property no longer has a mortgage on it so if it is sold for £127K the owner will have £127K in their pocket.

However if what runs out is a fixed term discount or fixed rate on a mortgage, then the remainder of the mortgage will run on a variable basis.

No need to sell.

The "owner" won't have the sale price money in their pocket as it will be needed to repay the mortgage in that scenario from the looks of things if it is an I.O mortgage.
Either that or it's a repayment mortgage and it's just the deal that ends and not the mortgage, so if it was sold then there could be money left over once the mortgage is cleared but not the sale price going to them and by the original post it looks like the money the put as a deposit could be lost.

specialboy

Wi88le wrote: »

The "owner" won't have the sale price money in their pocket as it will be needed to repay the mortgage in that scenario from the looks of things if it is an I.O mortgage.
Either that or it's a repayment mortgage and it's just the deal that ends and not the mortgage, so if it was sold then there could be money left over once the mortgage is cleared but not the sale price going to them and by the original post it looks like the money the put as a deposit could be lost.

Can you write that in English please.

nicholaswitchell

specialboy wrote: »

Can you write that in English please.

I was able to understand it pretty easily if I'm honest.

Phil_Spencer

sillyspendy wrote: »

15k deposit was put down. The buy to let mortgage runs out next year so does this mean we will then have to sell and loose most of our deposit?

Where is the property located? When did you buy?

pinkteapot

I can understand your confusion. In recent years, it's become more common for people to switch mortgages during the life of them, particularly at the end of introductory offer periods. You now regularly see posts from people saying their mortgage is "running out", when they just mean the introductory deal is up.

When the mortgage was taken out, it would have been for a term, say 25 years. It most likely had an introductory rate - eg a fixed rate for two, three or five years of x% interest.

At the end of that two, three, or five years, the mortgage doesn't end. It carries on, but the rate of interest changes so the monthly repayments go up or down.

It's like a credit card that's 0% for a year then 16%. You can keep the credit card but just pay more interest.

In negative equity, all it means is that you won't be able to switch the mortgage to another lender (unless you have lots of cash to put down). After the offer rate ends, you'll probably pay the lender's "standard variable rate". You can find out what this is on their website. This rate may be higher than you're currently paying, and higher than other mortgages are advertised at. It just means that you may be stuck with a higher rate than you'd like because you can't move to another mortgage company.

You'll be under absolutely no obligation to sell the house. Your mortgage is still for its full original term (25 years or however long it was taken out over). You can just keep paying it off over that whole time and at the end of it, it'll have been repaid.

n.b. All of the above is assuming you didn't have an interest-only mortgage that's actually coming to the end of its term. I can't imagine you do, but you might want to check with the hubby.

Mattygroves2

The OP has got another thread running on this issue:

https://forums.moneysavingexpert.com/discussion/5173639

Which seems to suggest that it is a BTL IO mortgage that is coming to the end of it's full term.

Foxy-Stoat_3

Property bought in 2006, so the BTL was a 10 year term.

Once sold the both owners will get around £4000 each, you will unlikely get another BTL at 92% LTV.

Speak to the lender and see what they think its worth.

pinkteapot

Mattygroves2 wrote: »

The OP has got another thread running on this issue:

https://forums.moneysavingexpert.com/discussion/5173639

Which seems to suggest that it is a BTL IO mortgage that is coming to the end of it's full term.

:wall::wall::wall:

Foxy-Stoat_3

pinkteapot wrote: »

n.b. All of the above is assuming you didn't have an interest-only mortgage that's actually coming to the end of its term. I can't imagine you do, but you might want to check with the hubby.

Pink, NEVER assume anything on MSE !!!!

G_M

Wi88le wrote: »

The "owner" won't have the sale price money in their pocket as it will be needed to repay the mortgage in that scenario .

Did you read my post before responding? If so, did you understand it? I said:

If the mortgage runs out, then that means it is paid off and finished. The property no longer has a mortgage on it so if it is sold for £127K the owner will have £127K in their pocket.

That of course is just one interpretation of 'runs out', and I did offer an alternative definition.

If as seems possible now, it was an IO mortgage, then true, it it not paid off - but OP provided so little information we were all groping in the dark.