Mortgage prisoner.

landlord999

Im a mortgage prisoner with wave lending, who are part of mortgages plc, my mortgage deal ended a few years ago so I am on standard variable which tracks the BOE base rate, neither banks are operating anymore so they will not offer me a new mortgage deal, due to affordability rules I cannot go to another lender and qualify for the amount I need so I am stuck where I am. Im on interest only and I have never missed a payment ever, my mortgage rate is now about 8% and my interest only payments have risen from £480pm to £1700pm and im now panicking!! What can I do? Can I get compensation from my lender as I could be on something between 2-5% had they offered me new deals? Will another lender help me, if so who? I dont know what to do...

sammyjammy

Is the property rented out?

MattMattMattUK

landlord999 said:

Im a mortgage prisoner with wave lending, who are part of mortgages plc, my mortgage deal ended a few years ago so I am on standard variable which tracks the BOE base rate, neither banks are operating anymore so they will not offer me a new mortgage deal, due to affordability rules I cannot go to another lender and qualify for the amount I need so I am stuck where I am.

That is an unfortunate situation, but it does indicate a bigger issue, you cannot afford the property.

landlord999 said:

Im on interest only and I have never missed a payment ever, my mortgage rate is now about 8% and my interest only payments have risen from £480pm to £1700pm and im now panicking!!

The fact that you are on an interest only mortgage is a bigger issue, almost no banks now allow new applications for interest only mortgages and those that do only do so in very specific circumstances, such as having a large investment which will be used to pay off the mortgage, selling the property at the end of the term is not adequate.

Your interest only repayments would indicate a mortgage of £255,000, a new mortgage would need to be on a repayment basis and at current rates over 25 years it would cost £1,566 pcm, over 35 years that would drop to £1,369 and over 15 years that would rise to £2,084 pcm, generally most mortgage lenders will only lend up to retirement age or a few years beyond.

landlord999 said:

What can I do?

If you can you afford the payments on a new mortgage on a repayment basis based on affordability checks? If you cannot, then you cannot afford the property and will need to sell and downsize. The only other option would be if you are at pension age, in which case you may be able to get a lifetime mortgage, but again, specific circumstances apply, you need significant equity in the property and it will mean that there will be no equity left in the property in 10-20 years. 

landlord999 said:

Can I get compensation from my lender as I could be on something between 2-5% had they offered me new deals?

No, you cannot.

landlord999 said:

Will another lender help me, if so who?

Another lender will lend to you if you meet their lending and affordability criteria, but those are generally very similar across all lenders. 

landlord999 said:

I dont know what to do...

I suspect you need to sell the property and downsize to something that you are able to afford.

*Above as posted on your other thread. 

landlord999

Property is not rented out, I live there. 

Ayr_Rage

@landlord999 what do you have in place to repay the capital sum at the end of your interest-only mortgage ?

If you have something in place can that be cashed in early without taking a big hit ?

What is the market value of the house and what is the outstanding mortgage capital sum ?

landlord999

Value is 400k mortgage is 280k, repayment plan is sell some BTL properties. 

LunaLater

landlord999 said:

Value is 400k mortgage is 280k, repayment plan is sell some BTL properties. 

Well then there’s your answer; you’re not trapped at all. Sell those other properties and you can pay off this mortgage and move on.

Keep_pedalling

It seems you have overstretched yourself by buying other properties rather than pay down the mortgage on your own home. Time to bite the bullet and sell off some of your other properties to raise enough to reduce you lending on your own home. Don’t forget to allow for CGT on any sale.

You are prisoner and jailer so you have the key to escape

Ayr_Rage

If you only need to sell "some" and not "all" of your BTL properties to clear the 400k then that's your way out of jail.

You seem to be in a much better position than your OP indicates.

silvercar

Ayr_Rage said:

If you only need to sell "some" and not "all" of your BTL properties to clear the 400k then that's your way out of jail.

You seem to be in a much better position than your OP indicates.

I think it is a comparison between the rate OP could be paying if the current lender offered mortgages and the inability to move to a different lender combined. Hardly OP's fault that the current lender isn't offering mortgages and that is what has effectively imprisoned (or at least fined!) OP.

kingstreet

Get your mortgage prisoner letter from your current lender and start talking to a decent independent broker who will know your options.