BTL, 2 yr mortgage deal ending, trying to sell house - options, help!

snickpan

Hi all, I've tried for a year to sell my HMO to fellow landlords with no luck (other than stupid low offers), so now going to sell to 'real' people, should open up to a potentially bigger group of buyers - so I've turned the 2 downstairs bedrooms back into a lounge and a dining room, make it look like a house, not a hostel.  So I've lost £1300 or rental income from those two rooms, and my 2yr BTL deal is about to end, meaning the payments will shoot up.  Before I approach The Mortgage Works, what options might I have, if I start to run short on money?
Thoughts so far: skip a couple of payments and take the 'late' fines on the chin when I sell and pay off the mortgage.  Ask for some leniency, ie warn them I may not be able to make every payment, see if they offer a couple of months payment holiday with interest added to the loan (or something).  I don't think I can sign up for another 2 yr deal as it would lead to early repayment fines once the house is (hopefully) sold.  Maybe just get a bank loan to tide me over, and swallow any repayment fees
I might survive, but I'm planning ahead.  I have some savings, but I also have to tackle the kitchen and garden!

El_Torro

If you're planning to miss some payments then the general advice is to speak to your lender first before you stop paying. They will be more accommodating to your situation if they know about it in advance. Like I say this is the general advice, since I haven't been in this situation before I don't know whether it's true that they'll be nicer to you if you're upfront. 

I agree that you shouldn't' sign up to another 2 year deal. Your current lender should be able to offer you a lifetime tracker or similar that allows unlimited overpayments. Will be cheaper than going on the Standard Variable Rate at least.

silvercar

Excluding the hassle factor, which must have some value, what would the loss be between the “stupidly low offer” and all your costs in preparing for a sale on the open market that didn’t happen for another few months?

silvercar

Do you have tenants in the other rooms? It could be off putting to view a property with those tenants in situ. Buyers who want to move quickly are going to wonder how long it will take to get rid of the tenants. Tenants also understandably don’t have any interest in making the property look good for viewers.

snickpan

silvercar said:

Excluding the hassle factor, which must have some value, what would the loss be between the “stupidly low offer” and all your costs in preparing for a sale on the open market that didn’t happen for another few months?

well, stupidly low offer tells you everything you need to know!  House will be marketed at £650k, after 6 months of getting me to jump through hoops, the last offer was downgraded from £520k to £420k - which is STUPIDLY low  

snickpan

silvercar said:

Do you have tenants in the other rooms? It could be off putting to view a property with those tenants in situ. Buyers who want to move quickly are going to wonder how long it will take to get rid of the tenants. Tenants also understandably don’t have any interest in making the property look good for viewers.

yeah, I've had to consider all this - it's highly likely they'll bail at the first opportunity, leaving me with less income, but more rooms to 'prep'

snickpan

El_Torro said:

If you're planning to miss some payments then the general advice is to speak to your lender first before you stop paying. They will be more accommodating to your situation if they know about it in advance. Like I say this is the general advice, since I haven't been in this situation before I don't know whether it's true that they'll be nicer to you if you're upfront. 

I agree that you shouldn't' sign up to another 2 year deal. Your current lender should be able to offer you a lifetime tracker or similar that allows unlimited overpayments. Will be cheaper than going on the Standard Variable Rate at least.

TMW's 'look at your mortgage' page has a big link to a money-worries page which is reassuring, so I'll ring Monday morning

HobgoblinBT

Your HMO/former HMO and affordability situation sounds like a house that should be sold at auction.

silvercar

snickpan said:

silvercar said:

Excluding the hassle factor, which must have some value, what would the loss be between the “stupidly low offer” and all your costs in preparing for a sale on the open market that didn’t happen for another few months?

well, stupidly low offer tells you everything you need to know!  House will be marketed at £650k, after 6 months of getting me to jump through hoops, the last offer was downgraded from £520k to £420k - which is STUPIDLY low  

That seems an expensive HMO, how many tenants are there in total? At that price point I would have thought that emptying it and dressing it for sale as a family home would make sense- if you can afford to do so. At £650k part HMO occupied, part empty done up rooms is not getting to get top price.

snickpan

HobgoblinBT said:

Your HMO/former HMO and affordability situation sounds like a house that should be sold at auction.

lols, tried that a year ago, very litttle response until someone offered £420k

poppy10_2

snickpan said:

HobgoblinBT said:

Your HMO/former HMO and affordability situation sounds like a house that should be sold at auction.

lols, tried that a year ago, very litttle response until someone offered £420k

Sounds like it's not actually worth £650k then