Stopping mortgage payment for 1 month until sale

jj42

I am in the process of selling a property that I rent out. The property generates a loss as the rental income doesn't fully cover the mortgage payment.

At the start of the sale I was of the understanding that we could complete immediately after the current tenants move out. My plan was to exchange in advance of this and complete the day after this occurred, assuming no other complications.

I have now been told by my solicitor that the buyer will not exchange until the tenants move out and they have verified this has occurred as the risk of vacant possession not occurring is too high.

This puts me into a unexpected financial position where I may have to pay a month or 2 of mortgage without having rental income to cover this.

If I was to stop our mortgage payments until the sale completed (assuming up to 2 months of missed payments) would this jeopardise the sale or our credit rating significantly?

Any other advise greatly appreciated.

MJP43

Have you asked to see if you can take a payment break?

Far better than deliberately defaulting. If you are upfront about having difficulty you will find them more co-operative than sticking your head in the sand.

amnblog

What you suggest is not a good idea on any level.

jj42

Thanks for the advice. I'll contact the mortgage company and try to work something out.

martinsurrey

jj42 wrote: »

Thanks for the advice. I'll contact the mortgage company and try to work something out.

what is the chain like?

could you exchange and complete on the same day (I did that when buying a house that was previously let)?

maninthestreet

jj42 wrote: »

I am in the process of selling a property that I rent out. The property generates a loss as the rental income doesn't fully cover the mortgage payment.

At the start of the sale I was of the understanding that we could complete immediately after the current tenants move out. My plan was to exchange in advance of this and complete the day after this occurred, assuming no other complications.

I have now been told by my solicitor that the buyer will not exchange until the tenants move out and they have verified this has occurred as the risk of vacant possession not occurring is too high.

This puts me into a unexpected financial position where I may have to pay a month or 2 of mortgage without having rental income to cover this.

If I was to stop our mortgage payments until the sale completed (assuming up to 2 months of missed payments) would this jeopardise the sale or our credit rating significantly?

Any other advise greatly appreciated.

Your mortgage lender will not remove the charge against your property if you are unable to pay off the outstanding mortgage debt, so your sale of the property would stall at that point.

lonestarfan

maninthestreet wrote: »

Your mortgage lender will not remove the charge against your property if you are unable to pay off the outstanding mortgage debt, so your sale of the property would stall at that point.

No it wouldn't. The OP doesn't say there is a loss on the sale. The sale of the property will discharge the mortgage and any arrears. OP is saying it makes a loss on a monthly basis on the rent v mortgage payments.