Mum and Dads interest only mortgage ending

princesspecpec

Hi, I'm a newbie and after a bit of advice - so thanks in advance.
Currently, my family and I are renting off my parents - at £450 a month for a 2 bed. Unfortunately their interest only mortgage comes to an end the end of this month. My Dad is trying frantically to remortgage but unfortunately he now has adverse credit due to a repossession of a property this year - so the remortgage is looking doubtful - even though they have not missed a payment. They only have £92000 left on it. We are planning on buying it off them but are savings are low at the mo and both my partner and I are full time students for the next year. However, we have money coming to us in 2022, that would be enough to pay off the remaining mortgage amount. Would my parents be granted an extension until this time? -My partner and I are secured tenants so could they prolong the sale to us until 2022?
Many thanks
pecpec:beer:

diggingdude

what was their original plan for paying off the mortgage? How old are parents?

princesspecpec

Sale - but now we live there - so I think they feel a bit guilty ;( both 65. thanks

csgohan4

Your father needs to call the lender and ask for an extension, it will be at their discretion, but ultimately if the are unable to pay, repossession will be one route.


Lenders only go on the now and not the future and if you cannot show income to satisfy affordability criteria you will not get a mortgage

getmore4less

They only have £92000 left on it. We are planning on buying it off them

How much is it worth?

both my partner and I are full time students for the next year

What are the job prospects 2020?

However, we have money coming to us in 2022, that would be enough to pay off the remaining mortgage amount

Depending on the above it might only need a 1 year extension.

You buy it off them then for £92k


What have they been doing with the £450pm(after tax) mortgage should be around £160pm


Having another property repo will not help suggest they left that one to the wire rather than liquidating earlier, was there any residual owing?


have they got any more properties?

princesspecpec

Hi - thanks for reply. Yes its valued at 120'000 so yes I suppose if they sold it to us at 92000 we could use the difference as a deposit. We have very good prospects of having a job at end of course. Do you think the mortgage company would grant an extension of a year?
Yes they do have more properties - not sure on the situation on them, I think they're selling them to fund retirement.
Thanks
pecpec

SonOf

Hi - thanks for reply. Yes its valued at 120'000 so yes I suppose if they sold it to us at 92000 we could use the difference as a deposit. We have very good prospects of having a job at end of course. Do you think the mortgage company would grant an extension of a year?

Your parents will likely have to pay capital gains tax and it will be against the market value.

You only get CGT exemption on your primary residence. If they have their own money problems, as it sounds, they may not be able to afford to discount it by so much.

getmore4less

princesspecpec wrote: »

Hi - thanks for reply. Yes its valued at 120'000 so yes I suppose if they sold it to us at 92000 we could use the difference as a deposit. We have very good prospects of having a job at end of course. Do you think the mortgage company would grant an extension of a year?
Yes they do have more properties - not sure on the situation on them, I think they're selling them to fund retirement.
Thanks
pecpec

They should be selling them quickly to pay off the mortgages first.

very careless to have one repo and one with a month to go.

Brock_and_Roll

Frankly it sounds like you would be doing your parents a favour if you moved out allowing them to sell the place quickly rather than have huge hassle (and probably) costs arguing with the lender. Does the lender know that the property has been let to family?

Like others it seems crazy that they have allowed one property to be repossessed in such circumstances.

rrumjen

I have a a slightly similar problem as your dad. My mortgage was its end of term last June. I have always paid the mortgage which is interest only. Never missed one single payment in the past 25 years. When I first took out the mortgage, I had assume I was paying capital and interest. The broker messed up and I didn't found until many year later. I had issues with the lender with my monthly payment and then the refunded a few thousands pound for overpayment. Thereafter, after a few years/months, we found out that they were treating is as tenant in our own house. Again, we wrote and told them that this was our main residence and that we weren't tenant. It has been an absolute mess. I am 72 years old and my wife is 68. I have assets that will pay off the mortgage, but the asset also provide me with a comfortable income. If I were to pay off the mortgage and pay off the mortgage, I will be left with no income but my state pension of £168 per week. I have asset abroad under construction which will bring a guaranteed income of around £3000 per month. However, this will be fully operational in the next two years. Once the villa is fully operational, I will be able to sell my properties here to clear the mortgage. I have asked the lender for an extension but they have refused. They have suggested a capital repayment option which is beyond my means. I have a very good credit record. We simply don't know what to do.
I know that it will be difficult for the lender to apply to the court for repossession. By the way, the value of my property is £475000. The amount owing is 211000.
I also believe I might have a case against the lender for Messing up my mortgage for the past years. We only found out we were bing treated as tenant a few years ago. We have a combined of around £31000 per year.
I would really appreciate if anybody out there can advise me.
Thanks

SonOf

I would really appreciate if anybody out there can advise me.

Start your own thread. What you are doing is known as thread hijacking. (internet speak). i.e. you post risks taking over the thread that was started by someone else and you end up "hijacking" it whilst their questions go answered. You also risk running two different discussions on the same thread which leads to confusion. You wont get this on your own thread.