end of term of NRAM mortgage and in negative equity

PaulineB

I am soon to be at the end of term on an interest only buy to let NRAM mortgage, they will extend my mortgage providing I go on a repayment mortgage at the same mortgage rate over 7 years I am on 5.99% int rate, the mortgage is 98kI can remortgage with Birmingham midshires on an interest only at 2.3% making the payments manageable, however, I have to put 26k down as will only allow me 75% value to mortgage. Am I stupid putting 26k into something that is in negative equity now, will the property prices plummet in October ANY ADVICE MOST WELCOME

[Deleted User]

PaulineB wrote: »

I am soon to be at the end of term on an interest only buy to let NRAM mortgage, they will extend my mortgage providing I go on a repayment mortgage at the same mortgage rate over 7 years I am on 5.99% int rate, the mortgage is 98kI can remortgage with Birmingham midshires on an interest only at 2.3% making the payments manageable, however, I have to put 26k down as will only allow me 75% value to mortgage. Am I stupid putting 26k into something that is in negative equity now, will the property prices plummet in October ANY ADVICE MOST WELCOME

No one has a crystal ball to say what will happen to house prices in October or any other time.

Do you want to keep this property? If yes do you have enough money to reach a 75% LTV? If you go for the interest only option what repayment vehicle do you have to repay the capital? Do you have enough savings to reach a 90% LTV with another lender for a repayment mortgage?

If you don’t want to keep the property, and can afford to do so, then cut your losses and sell.

PaulineB

Hi thanks for reply,the property has drastically gone down in value bought it for 105 just had it valued 90k I can get hold of 25k to enable me to re mortgage with another company at a much lower int rate however I am risking losing the 25 k the only other option is repossession whereby the prop will be sold I will be left with the shortfall

davidmcn

If you can sell at £90k, can't you get £8k from e.g. an unsecured loan to cover the shortfall? Do NRAM allow such balances to be converted into unsecured loans?

Amst

If house prices fall in October then you're better off getting out of the NRAM mortgage now as you'd have to find more money to get a 75% mortgage following the drop.

What you owe is not directly linked to what your house price is worth.