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    • muppetscotland
    • By muppetscotland 9th Jul 18, 1:09 PM
    • 105Posts
    • 91Thanks
    Back from the brink...resuming mortgage payments after arrears
    • #1
    • 9th Jul 18, 1:09 PM
    Back from the brink...resuming mortgage payments after arrears 9th Jul 18 at 1:09 PM
    We have been in an "interest only" arrangement with our building society for 11 months, due to the failure of our business (which employed both me and my husband).

    My husband has now got a job but isn't earning nearly what we both used to. Plus of course almost a year out of work has taken its toll and loads of things need to be fixed or replaced etc.

    My question is - will the BS expect us to jump straight back into paying the full monthly repayment and interest amount (over 1000) or can we negotiate a part payment or longer term?

    To further complicate things, we will need to rent the house out as the job is overseas and we all need to go (reluctantly). The rental market is very depressed here (for same reason our business went bust) so I would not imagine we can cover the full mortgage payment with rent. It will look something like this;

    Full repayment and interest payment before arrears 1000
    Interest only for last 11 months 315
    Rental income 650 PM

    So ideally we need a mortgage payment of no more than 650 PM so the rent covers it all.
    We intend returning to the UK as soon as the job market allows, so need to keep our home. Also, not much equity in it but it's all we have and we will eventually want to sell when/if the market ever gets better.

    Has anyone done this - returned from interest only arrangement to "half way house" rather than take on the whole amount again?

    Thank you
    Travelling hopefully 🏃
Page 1
    • DCFC79
    • By DCFC79 9th Jul 18, 2:58 PM
    • 32,915 Posts
    • 20,729 Thanks
    • #2
    • 9th Jul 18, 2:58 PM
    • #2
    • 9th Jul 18, 2:58 PM
    You would need to ask the BS if you can negotiate a part payment or longer term.
    • Pixie5740
    • By Pixie5740 9th Jul 18, 8:31 PM
    • 13,272 Posts
    • 19,099 Thanks
    • #3
    • 9th Jul 18, 8:31 PM
    • #3
    • 9th Jul 18, 8:31 PM
    I think remaining on interest only or part repayment/part interest plus getting consent to let is going to be a tough sell.

    It's not enough for the rent to cover the mortgage payments. How will you pay for repairs, maintenance, void periods tax, as well as all your legal obligations such as gas and electrical checks? Living overseas means you'll need someone to manage the property for you which usually means you'll need to pay a letting agent to do that for you.
    • Dalradian
    • By Dalradian 9th Jul 18, 9:39 PM
    • 156 Posts
    • 728 Thanks
    • #4
    • 9th Jul 18, 9:39 PM
    • #4
    • 9th Jul 18, 9:39 PM
    most mortgages do not allow for letting - you might need to change you mortgage in order to let & they usually have higher interest charges. But you could take it as interest only and just overpay the capital down when you have the money. You can usually overpay up to 10% a year
    Mortgage 1:128,202 124,330 118,330 113,330 107,712 104,047 100,547 99,199 95,849 85,693.33 80,172.92 78,000 69,708 at 2.49% Original repayment date May 2041 (144,215 at May 2012)
    Mortgage 2 BTL: 61,701 at 3.49% interest only Original repayment date May 2041 (70,000 at May 2012). Mortgage free 2018
    • January2015
    • By January2015 10th Jul 18, 6:50 AM
    • 2,298 Posts
    • 5,477 Thanks
    • #5
    • 10th Jul 18, 6:50 AM
    • #5
    • 10th Jul 18, 6:50 AM
    Some lenders consider Consent to Let, which is where the lender agrees to you letting out your property for a set period whilst remaining within your existing owner-occupier mortgage. They will usually charge a fee for this.

    My son did this with an RBS mortgage a few years ago. He didn't have to change his mortgage or sell his home whilst he had an opportunity to work abroad for a while and he was able to let his flat during the period he was away to cover the mortgage payments.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was 95k I'm driving it down
    1k emergency fund (member #84) 1k/1k
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