Part interest part repayment mortgage what are the chances of success

Philomena78

My current repayment fixed deal on my family home is coming to an end.  I am considering attempting to get a part interest part repayment mortgage due to financial strains 3400 per month. We have not defaulted or have been in arrears during my mortgage but we find the monthly repayments unaffordable. Myself and my partners together earn over 100k per year. The reasons for our struggle is that due to age (60+) we can only get a maximum of 10 or 15 years mortgages. The second reason is that we have another property that is also mortgaged (repayment)  which we were trying to sell for the last two years but fell through each time. 

We were too optimistic to buy our current property before selling and got stuck with 2 mortgages. This second property is currently empty and it is of the value of 200k with an existing mortgage of 130k.

 Would it be possible for us to get a part interest part repayment mortgage? Would the lender accept the second property as repayment plan? What do we need to do for this to happen? Do we need to rent it before we apply? Are these mortgages common and easy to get? And what are the conditions. unfortunately If we can’t do this we will have to sell the family home and get something more affordable. I know we sound  like a financial wrecking ball- in truth we are and have messed up big time but we are living with the consequences everyday. So please keep the comments constructive. 

GrumpyDil

Rather than sell the home you are currently living in wouldn't a better option be to lower the price on the other property just to get it sold?

It may not be ideal but at the end of the day a property is only worth what you can sell it for.

TheSpectator

How many times has the sale on the other property fell through? Why? Is £200k value overpriced.

As above, why sell your current home when you could knock £10k or more of 2nd property price to get it sold and still have funds leftover. Trying to sell the new property seems the nuclear option.

Philomena78

GrumpyDil said:

Rather than sell the home you are currently living in wouldn't a better option be to lower the price on the other property just to get it sold?

It may not be ideal but at the end of the day a property is only worth what you can sell it for.

We have dropped the price below what we paid for it by 20k and it is priced way below its market value. If I put it back on the market I am sure I will get an offer but then 4 months down the line there is no guarantee they will complete. First buyer relationship broke down and pulled out of the sale on the week of exchange. Second buyer pulled out this week, the property was never right for him but it took him so long to realise that. I feel that emotionally I am exhausted of trying to sell that property in the current market. 

Philomena78

TheSpectator said:

How many times has the sale on the other property fell through? Why? Is £200k value overpriced.

As above, why sell your current home when you could knock £10k or more of 2nd property price to get it sold and still have funds leftover. Trying to sell the new property seems the nuclear option

Thank you, honestly I know but I can’t take the financial stress anymore. It is impacting my health and my life. I bought the current family home while we had an offer on the flat thinking that we will sell and would be ok to afford our current mortgage but that did not happen. We had 2 sales falling through at the last moment. The first was above what we paid for, the second was a cash buyer with a low offer which we accepted because we wanted a quick completion. My neighbour is selling his property for over a 100k more than ours. His is slightly bigger but still the same building. 

kingstreet

It's possible, but what you want to do prompts lots of questions and if asked and answered the response is likely to be the same, speak to a good broker who can best advise you on the options. Ask friends and relatives for a recommendation.

Your assertion about mortgages of no more than 15 years is incorrect. That's one point you'll find out by seeking advice.

Hoenir

Reduce the price on the second property to a level where it generates a lot of interest. Spring is approaching. The market does pick up at this time of the year. While 50/50 is an attective option. Will it actually resolve your challenges. Or simply kick the can a few yards down the road. Also think longer term. Your working lives are drawing to an end. Make plans for the future. Give yourselves targets/objectives to provide motivation. 

Philomena78

Hoenir said:

Reduce the price on the second property to a level where it generates a lot of interest. Spring is approaching. The market does pick up at this time of the year. While 50/50 is an attective option. Will it actually resolve your challenges. Or simply kick the can a few yards down the road. Also think longer term. Your working lives are drawing to an end. Make plans for the future. Give yourselves targets/objectives to provide motivation. 

Very good question really that we need to think about. Do we bite the bullet now? Selling the family home is not off the table. We may still have to move to a cheaper area to be able to have a life as at the moment we are completely financially drained. 

Currently the markets for flats in my area has collapsed. Family homes are still very desirable but we cannot guarantee that we would get what we paid for. It is a different world from when we bought but the area remains very desirable and our house is a good size family home in a desirable location and with a huge garden. 

I think if we rent the flat and provided we get part and part mortgage it will end up paying for itself. I have no experience of rental so this might be wishful thinking.  Our retirement plans currently consist of saving enough for a trip to dignitas.

housebuyer143

Interest only tends to only be available to those that don't need it. Your high salary is good because that's normally a requirement and you have another property to sell as a repayment plan, so I don't think it's actually out of the question for you. 
Speak to a broker as there are not a huge number who do interest only and fewer who allow sale of another property as a viable repayment strategy.

Philomena78

Thank you all this has been very helpful.  Based on this conversation, I have made up my mind. I will put the second house back on the market again, third time lucky I hope. I will hold off on the idea of selling the family home for now and I will explore the possibility of getting part and part mortgage in the short term until the flat is sold. Thank you all. I feel like at least I have a sense of direction now.