Mortgage Options... If any!

andrewj2202

Hi everyone. My wife and I have been mortgage prisoners for a few years. We had a mortgage with Northern Rock which in turn changed to NRAM and has now been passed to Heliodor Mortgages.
The property we purchased was a small 2 up 2 down terrace which we, as a family, eventually outgrew. We bought at exactly the wrong time and have spent the last 10years trying to get back in some sort of equity!
We were lucky to be able to move in with family and rent the property out with the consent of NRAM. This enabled us to almost cover the mortgage with the rent. At last valuation the property was valued between £65000 (for a quick sale) and £70/75000. We owe approximately £63000.
Our intention would ideally be to hang onto the property but I REALLY want to try and get the mortgage moved to start paying it off quicker.
We have since purchased another property that is where we are planning to stay for the long term. The new mortgage was for double the other amount and we got an interest rate of 1.86%. As we have the new mortgage to pay, plus the rent to top up to meet the original mortgage, it doesn't leave much to overpay on the original mortgage. Does anyone know if there is any chance of moving the original mortgage? I keep reading articles and there are hints at changes to regulations etc, but do not know if we would be able to do anything. As we do not live in the property anymore, would we be considered for anything other than a Buy to Let mortgage?
Thanks in advance.

ACG

The problem you have is that you rent your property out, so it is now effectively a rental property, so you are unlikely to be classed as a mortgage prisoner.

Until you get the LTV down to around 75-80%, you are unlikely to have any options.

Thrugelmir

andrewj2202 wrote: »

My wife and I have been mortgage prisoners for a few years.

In purchasing another property seems that you had the opportunity to exit the historic mortgage. A different situation to those trapped unable to do anything at all.

Scrimp and save whatever you can from your existing budget and reduce the mortgage owing. Then when sufficient equity is in place. Sell the property. Unfortunately there's no easy way out. Given you suggest that there's financial constraints limiting your options.

andrewj2202

Thanks for your reply ACG. Soooo who’s valuation of the property counts?! And what proof do I need to get from them for a mortgage company?!

ACG

The new lender would instruct their own valuation.
That valuation would typically use similar properties in the area that have sold within the last 3-6 months as a basis for their valuation.

SpiderLegs

How much are you paying each month towards the property?
how much in total has it cost you to get to a point where you have around 10k in equity?

How much do you think the property will increase in value over the next 1,3,5 years?

I would be considering whether you are doing anything other than chucking money down the drain.

getmore4less

MIssing information.

What rate and term is the current £63k mortgage on the rental?

What rent does it achieve?

gj373

I'd sell up if I were you. Are you paying tax on your rental income? Even though your rental is making a loss there may still be a tax bill to pay. I think you are throwing money away holding on to the rental property. Do you still have consent to let? Usually this has a time limit.

What are you going to do if you get a bad tenant who doesn't pay rent on time?

Retired_Mortgage_Adviser

There may be a tax bill to pay. Depends on the numbers. Less likely if the OP is a basic rate taxpayer, more likely if a higher rate taxpayer.

gj373 wrote: »

Even though your rental is making a loss there will still be a tax bill to pay.

gj373

Retired_Mortgage_Adviser wrote: »

There may be a tax bill to pay. Depends on the numbers. Less likely if the OP is a basic rate taxpayer, more likely if a higher rate taxpayer.

Very true - updated my comment