Selling house to pay off mortgage , can we be evicted if it takes too long

samandan

Due to major money issues some years ago we switched to an interest only mortgage and have never had any way of paying off the mortgage. It has always been our intention to sell the house to pay it off. Not ideal, but it's all we can do. There is plenty of equity in house so that's not the  issue. What I am wondering is, if the house does not sell before the mortgage is due to be repaid would the bank have an obligation to give us more time as long as we where actively trying to sell it or could they just repossess.

We have talked to the mortgage company and they are willing to extend our current mortgage until one of us reaches 70  which is October next year ( I had thought it was due to be repaid in November next year but it turns out it was January )

We need to so some 'tydying' up of the property as it is a bit neglected, so the plan is to do that over the next few months and put it on the market early spring. What I am wondering is, if the house does not sell before the mortgage is due to be repaid would the bank have any obligation to give us more time as long as we where actively trying to sell it or could they just repossess.

Brie

Repossession takes a long time so you wouldn't be evicted particularly if you have been steady payers for years.  Some banks do an engaged sale process whereby they agree that they will suspend the mortgage payments while you sell the property - you might ask your bank if something like that is an option.  

re timescales....I saw a case where the owners had stopped paying the mortgage and 3 years on the bank still hadn't taken any action.  There was a lot of confusion about that case which is not evident with yours but it does show how slow they might be.

Mark_d

It is unusual you were allowed to switch to an interest-only mortgage with no savings vehicle in place.  I've always needed to demonstrate and commit to a savings plan.
The house can sell as quickly as you want it to, so the bank does not have to give you more time.  Suppose your house is worth £300k and you have £150k equity.  You could sell for £150k very quickly and repay the mortgage.  This is what the bank might resort to doing if they need to repossess the property.

Hoenir

No obligation at all. Your lender has written to you in the past asking how you intended to manage the mortgage settlement. Ball is in your court entirely. Having said that they might grant a short term extension if you can seen to be proactively trying to sell the property. Repossession would come at a financial cost to you. Also lack of control of the situation. Better I would suggest if you simply plan to move on yourselves as soon as practically possible. Time soon disappears with property transactions. 

cymruchris

How long do you have until the end of your term? Are we talking weeks, months, years?

Most lenders would be open to you selling to settle the mortgage - but the key factor would be communication. Talk to them. Open the dialogue and see what your specific mortgage provider would be open to. Whatever you do, don't become a hermit crab and ignore everything, leaving everything to the last minute.

theoretica

The bank legally could repossess if the property is up for sale otherwise there would be a loop hole where an owner could put a 200k property up for sale for £1 million and sit there for decades 'for sale' but not selling...  But if the sale process is all going sensibly and communication kept up they would be pretty unlikely to do so.

If you want to stay longer, have you consulted a good broker about whether any of the lifetime mortgages available would let you do so?

MWT

Repossession is highly unlikely as long as you communicate with the lender and you are selling the property at a realistic price so there is a good chance of the sale proceeding within a period the bank consider to be reasonable.

However, once you pass the point where you should have fully repaid the mortgage you may find the interest rate you are paying may change, and the lender may start adding charges as they take steps to protect their position, so it is usually in your best interests not to leave it so late to sell that you are beyond your contracted end date...

sammyjammy

As above communicate with them, what they may not be comfortable with is your desire to wait until the Spring, what do you mean by tidying up?  If this will mean spending money will you recoup that with an increased sale price?  If the answer is no get it on the market now shows willing to move forward which will go along way towards them displaying patience.

user1977

Mark_d said:

Suppose your house is worth £300k and you have £150k equity.  You could sell for £150k very quickly and repay the mortgage.  This is what the bank might resort to doing if they need to repossess the property.

They would still have an obligation to take reasonable steps to get the best price, they can't just give it away at the minimum level required to redeem the mortgage.

Keep_pedalling

Would equity release be an option to pay off the mortgage and allow you to stay put?