Equity release to pay off mortgage?

skylark52

Wanted advice on a complicated situation. I'll try to keep it simple:
My partner (not married but three kids) of 28 years died in 2013, leaving no will and with my name not on the mortgage or deeds. No life insurance and tons of debts.
Before you say, how could you have let that happen? He wasn't a nice man and held a lot of power over me then and I was far too naive and scared.


I sorted all the debts as many were in both our names and got straight. Santander, who held the mortgage to the house we build together, let me pay the interest of my late partner's interest only mortgage while I sorted the probate (after being named legal representative by the children) and tried to sell the property.


The property had a mortgage of £181.000 and a value of £290.000
So far I have spent money decorating, repairing, putting a new roof on and a floor in an sizeable outbuilding to make it perfect for the sale, but although everyone loves the house, no offers. General assumption: House too valuable for where it is (not detached).


All was ok and I never missed a payment even though it was hard at times, but then this July Santander suddenly decided if I didn't have a buyer by August, they would repossess. I got a solicitor who is holding them off for now but at a cost of course.

I've tried to get a mortgage but being 60 next February they will only give me a repayment mortgage which is impossible on £181.000. I've tried friends with money to invest, I've tried talking to the bank to give me more time and also came up with a genius idea to split the property in a piece of building land (got an architect to have a preliminairy talk with the council and I have in writing they would concent to outline planning permission for a bungalow) and two sizeable houses. Part of the sale of the building plot would fund the splitting up of the property (it was two properties before, so not big investment) and it would, according to two estate agents be very easy to sell. It would all together be expected to raise over £300.000

Everything has been refused by the bank. No reason given other than 'it would take to long'
As I can't see any other way out and I don't want to loose my home and my 'pension' by handing this property to the bank my latest idea was Equity Release. I found an adviser but was told Equity release would not be possible because there is a mortgage on the property I'm 'too young' e.i. not a good investment and it wouldn't raise the needed funds to pay of the mortgage.
I know I can't keep the house forever but would like another couple of years to try to sell it by splitting it up in sellable properties and secure my pension. This house has so much (potential) money locked into it.



Is Equity Release really not an option or was I advised wrongly and would it be possible to just have it for a small amount of years, as in, could it be payed off?


Has anybody any other helpful advise maybe? I can't see how I have absolutely no rights after all this time and can just be told to leave and end up with what will be a very small amount of balance from the sale as Santander will get rid of the house for a pittance I'm sure.



Thanks for reading this novel

foxy-stoat

They have to get market value for it, they wont be able to give it away. If it hasn't sold them drop the price a little, what has your Estate Agent said about the lack of offers - maybe time for a change of Agent.

As long as you have been keeping up with the repayments then the equity hasn't been reducing.

skylark52

foxy-stoat wrote: »

They have to get market value for it, they wont be able to give it away. If it hasn't sold them drop the price a little, what has your Estate Agent said about the lack of offers - maybe time for a change of Agent.

As long as you have been keeping up with the repayments then the equity hasn't been reducing.

Yes, I have dropped the price by £10.000 and two years ago my estate agent suggested to go drastic and ask for offers over £250.000....lots of lookers, no buyers.

I have got a new estate agent in and they valued the house at the same price......

yksi

skylark52 wrote: »

lots of lookers, no buyers.

Since you have had viewings, the advertising by your agents has been fine. The price is still wrong. Valuations mean nothing if you aren't getting offers. I am very sorry for your difficult situation but you've had six years, suggesting you never really, truly wanted to sell it in the first place. If you were serious about selling, you would have dropped the price - repeatedly! - and eventually there would have been someone prepared to buy despite the legal stuff.

Santander has waited for such a long time and it still hasn't sold and now they are (naturally) afraid that the real value might not cover the mortgage and costs.

Drop the price realistically now and you might retain some control over how you move into your next home. Continue in denial and you'll eat into anything left and probably have a very upsetting eventual sale (a "tenant in situ" sale, at an auction, would definitely be a rock-bottom price).

getmore4less

Have the kids done a DOV so you can have the house?

Where are the 3 kids in all of this financial mess.

skylark52

getmore4less wrote: »

Have the kids done a DOV so you can have the house?

Where are the 3 kids in all of this financial mess.

THe solicitor has mentioned they need to sign a form (if this is what you mean by DOV) to put the property in my name.


They are now all safe in their own jobs and live their own life
That was one of the reasons I was not 'in a hurry' as was stated in a previous message. They were my first priority.

skylark52

yksi wrote: »

Since you have had viewings, the advertising by your agents has been fine. The price is still wrong. Valuations mean nothing if you aren't getting offers. I am very sorry for your difficult situation but you've had six years, suggesting you never really, truly wanted to sell it in the first place. If you were serious about selling, you would have dropped the price - repeatedly! - and eventually there would have been someone prepared to buy despite the legal stuff.

Santander has waited for such a long time and it still hasn't sold and now they are (naturally) afraid that the real value might not cover the mortgage and costs.

Drop the price realistically now and you might retain some control over how you move into your next home. Continue in denial and you'll eat into anything left and probably have a very upsetting eventual sale (a "tenant in situ" sale, at an auction, would definitely be a rock-bottom price).

No disrespect, I do realize what you are saying but if you knew what state the whole family was in at the time, you would understand. I had to hand over my youngest as a ward of court to Social Services voluntairily, in order to get help with food and heat. My partner had left such a (hidden) mess in so many ways from tax evasion to debts with utilities, banks etc. Some of which in my name and it took me a while to get my life back together and get emotionally and mentally back in the game. Yes, I might not have been in a hurry to sell as I had so much to deal with and went through a depression while trying to hold everything together. No help from anywhere, I had to do it all myself. DWP made it worse by declaring I had no right to benefits as being a foreigner (lived here nearly 40 years) I had to prove over a 6 month period I was a permanent citizen.




I know Santander has been patient. I will drop the price again with the new estate agent and hopefully get some more interest before a court date gets set.

getmore4less

Breaking ceiling prices is going to be tough in the current market, you might have overdeveloped it.

Conclusion asking price is too high.
(you have also probably missed the peak by hanging on for 6 years)

I think you may be overestimating the potential here and there really is not that much equity in the place to be considering this a pension pot.

I think you will have difficulty getting funding to develop this place as it is already encumbered with £180k of debt and stuck in administration for 6 years.
(that may also put people off as they may think you have priced not to sell and won't be accepting offers).

The current price and potential is not looking like enough margin to get a developer to take on a project.

How much income do you have and how long will you stay working?
that will give an idea of how much you could raise on your own

How much could your kids raise in cash between them?

Do any of the kids not want the place?

if the kids have move on have you use the property you its max potential to fund itself, if it held three kids you could have had lodgers for 6 years to pay down some of the debt.

getmore4less

I had to hand over my youngest as a ward of court to Social Services voluntairily

how old are they now?

Under 18 they cannot give away their inheritance.

skylark52

getmore4less wrote: »

Breaking ceiling prices is going to be tough in the current market, you might have overdeveloped it.

Conclusion asking price is too high.
(you have also probably missed the peak by hanging on for 6 years)

I think you may be overestimating the potential here and there really is not that much equity in the place to be considering this a pension pot.

I think you will have difficulty getting funding to develop this place as it is already encumbered with £180k of debt and stuck in administration for 6 years.
(that may also put people off as they may think you have priced not to sell and won't be accepting offers).

The current price and potential is not looking like enough margin to get a developer to take on a project.

How much income do you have and how long will you stay working?
that will give an idea of how much you could raise on your own

How much could your kids raise in cash between them?

Do any of the kids not want the place?




if the kids have move on have you use the property you its max potential to fund itself, if it held three kids you could have had lodgers for 6 years to pay down some of the debt.

Yes, I see your point with regards to the potential value.


I have a reasonable income but I am self employed. I don't see me giving up work for the foreseeable but I've already looked into raising money myself and found, because of my age I can't get more than £45.000


No, the kids don't want the house, its too far away from their work. My eldest is buying her own house the other side of the country near her and her fiancees work.


When the kids went I did take in two lodgers and I'm renting out the outbuilding for storage, so that has helped with my income and to build up a little savings but Santander wouldn't let me pay off any of the mortgage.

skylark52

getmore4less wrote: »

how old are they now?

Under 18 they cannot give away their inheritance.

I know, youngest is now 19