Interest Only Mortgage Ending - Selling house - what happens??

phil_d1111

Interest Only Mortgage Ending in November- Selling house - been on market six weeks or so

Up to date on payments (though it continues to be a huge struggle with the rises)

My question is basically: What happens when the Mortgage period comes to an end before the sale of the house goes through?

caprikid1

I am sure others will come along but as long as you communicate with the lender and are actively selling it and keep up payments there should be no issues. They won't waste money trying legal action whilst you are still communicating to them.

El_Torro

When you say that the interest only mortgage ends in November do you mean that the fixed rate you're on ends or that you have to pay back the full amount of the mortgage?

If it's the end of the fixed rate you just pay the Standard Variable Rate until the property is sold and you can pay off the mortgage in full. 

If the full amount is due in November then I'd get in touch with the mortgage provider to explain the situation. As mentioned the bank is likely to let you off if they know that the house is being sold and payment is coming.

phil_d1111

El_Torro said:

When you say that the interest only mortgage ends in November do you mean that the fixed rate you're on ends or that you have to pay back the full amount of the mortgage?

If it's the end of the fixed rate you just pay the Standard Variable Rate until the property is sold and you can pay off the mortgage in full. 

If the full amount is due in November then I'd get in touch with the mortgage provider to explain the situation. As mentioned the bank is likely to let you off if they know that the house is being sold and payment is coming.

Yes it ends in November & the idea is it all gets paid back then.    I also have an ongoing 45k loan on absurd fees from trying to prop up a business that sent pear 🍐 shaped & failed.

Idea is to sell off house, clear up all debts & move in (as I already have done) looking after a sick relative by way of carer

silvercar

Ideally you sell beforehand. If that doesn’t happen you tell the lender that the house is on the market and they will have their money as soon as it sells. There is little they can do in this situation. Their worst case option would be to repossess and sell themselves, but given it is on the market already I can’t see a judge agreeing a repossession order. What will probably happen is that you move to the standard variable mortgage rate until the property is sold.

michaels

When considering offers you probably need to think about the extra cost of interest and potentially fees (and worse case repossession) for every extra month you own the property, so it might be better to take a lower offer now rather than hold out for a better offer (that might never materialise anyway)?

MWT

Repossession really isn't on the cards and good communication with the lender may mitigate the risk of legal costs building up.

Just talk to them now and keep them updated on the progress of the sale and it should be a smooth process even if it does run over the deadline a bit...