Missed Payment on Mortgage - HELP!!

devmcc

Hi all – I am after some advice for a friend of mine who is in a bit of bother!!
So, she has two mortgages – one on her current home that she lives in and another on a property she has had for many years and was until recently renting out…
She has the second property up for sale but has yet to find a buyer.
She has started to struggle with her repayments and has now missed a months mortgage on the property she has up for sale – it is up for £195K and she owes approx £160K..
She re-mortgaged her current home recently to make some alterations to her house… so is unable to secure funds against that property.
She has contacted her lender, GE Bank (?) and asked for help but they have said they will not budge – the mortgage is already interest only. They know the house is up for sale but will not take this into account.
Can someone give me some sort of idea as to what will happen with this – she is going stare crazy!! What sort of timeframe is there before banks start taking legal action??
Any help or advice would be great…. Thanks all..

MarkyMarkD

One has to ask how she has an 82% mortgage on her buy-to-let property which she's had "for many years". What the heck has she done with the capital gains it's made?

And whether she borrowed MORE money against her own property to make improvements before, or after, she lost her tenant and/or decided to put the other property on the market.

But apart from all that, she is unlikely to get the property repossessed quicker than she can sell it unless she's asking a silly price. Perhaps now is the time to reprice to a realistic level to ensure that repossession is avoided?

devmcc

Hi there - thanks for the reply... she re-mortgaged her old house to use some of the money to put down as a deposit on the new house...
The tennant left after the re-mortgage...
The house is priced at the right level for the area so she is hopefull of a sale...
Do you know if there is a set amount of time lenders will give before taking legal action??
Thanks again..

Lizzy

What about a small personal loan of about 3 or 4k. If it pays the mortgage for a few months and services the loan it can be paid off when the house sale comes through. I think legal action will happen after about 3 months of missed payments on the mortgage. What are the monthly payments ?

MarkyMarkD

I agree with you in principle, Lizzy, but I'm not sure she will get a decent personal loan given her fairly dismal financial position - two mortgages, no rental income, and just failing to service one mortgage entirely.

Rick62

If she doesn't make her mortgage payments her credit will be damaged, and that will add £thousands to her remaining mortgage. Also as a Buy to Let (i.e. commercial loan) the lender is likely to move quicker for possession.

She really need to do whatever she can to get the money to keep paying and to get a quick sale. Otherwise she risks losing everything.

devmcc

Hi all... thanks so much for replying.. I will let her know what you have suggested today..

Sorry, I should have made it clear - the house is not on a Buy To Let as it was her own house for years and she just kept hold of it when she moved..
so, as it is not a commercial loan would she have longer to sell it before they looked at repossesion??

I dont think she would get a loan at the moment as she is not making ends meet and already has two jobs on the go..

I mentioned maybe looking at putting the house to auction - just for the speed of the sale..

Any other advice would be fabulous!

Hope you all have a great weekend - you are stars!

devmcc

Me again - just had another thought whilst looking through these pages... will she be liable for CGT as she has rented in out and no longer lives there herself.. if so, what sort of amount is she looking at??
Thanks again everyone - I am getting stressed for her now!!

Jonbvn

If you were a new poster, I would think that you were the proverbial strawman, asked to post here on behalf of the HPC/anti-BTL brigade.

silvercar

Any CGT will be reduced by taper relief for the time she has owned it; allowance for the time it was her home and the last three years of ownership; letting relief; and CGT allowance.

Although it is essential to pay the tax bill, the money will not become due until the January after the end of the tax year in which the sale took place. So you are looking at January 2009. Don't worry about this now, concentrate on selling the property.

devmcc

Jonbvn wrote: »

If you were a new poster, I would think that you were the proverbial strawman, asked to post here on behalf of the HPC/anti-BTL brigade.

I have no idea what any of this means... sorry!!