Missed Mortgage Payments for Home & BTL Properties?

[Andy M]

I've just been around at a relatives house, and ended up being the unexpected role of counselor. Said relative has just had a visit from her mortgage company (well known, based in the midlands ) due to missing November's and January's payments on two properties; one her home, and the other a buy to let.

The visit from the mortgage company was only concerning the BTL property (which is in the same building as her home). The payments themselves have come down due to the interest rate decreases, and are now supposedly of a more manageable rate, but she isn't due any wages until the first week in March. She's had problems paying the mortgage due to flood damage to the BTL property, and due to not currently having a tenant in that property (thus receiving no rent).

I've offered to pay a mortgage payment for her, but believe that the banks are supposed to be more considerate in regard to late payments when it comes to a persons home? I had a friend who had a BTL property snatched back after 2 months missed payments, so I want to protect her from that first.

I'm considering paying a mortgage payment on the BTL property (£900) and to pay for the repairs to be carried out (the insurance company are supposedly dragging their feet - I can get this back at a later date). I'd offer to pay both mortgages, but the cost including works etc would be circa £5k - an amount I'd prefer not to lose just for now.

So, my question is: are lenders being more patient of missed payments on a persons home? And in the above situation, am I correct to protect the BTL property first?

[T_Pot]

I think if it were me, id protect the home first, the BTL is not bringing in an income, doesnt home her and is about to cost her money she clearly can afford, she needs a home first.
then, see if you can fix the btl yourself if you want to help, and then get a tennant, otherwise, she may find she needs to live there

[Eric Mc]

Was she not insured for the flood damage?

[Andy M]

T_Pot said:

I think if it were me, id protect the home first, the BTL is not bringing in an income, doesnt home her and is about to cost her money she clearly can afford, she needs a home first.
then, see if you can fix the btl yourself if you want to help, and then get a tennant, otherwise, she may find she needs to live there

She tells me that the mortgage company didn't seem as concerned about the missed payments on her home, they appear to be looking at her BTL - a property which holds quite a bit of equity, and most of her pension.

This is what I'm concerned about: http://www.consumeractiongroup.co.uk/forum/mortgag...

Eric Mc said:

Was she not insured for the flood damage?

She is, but her insurance company have been very slow to accept the quotes she's submitted to have the work carried out.

[Eric Mc]

That is probably the key issue. Get the insurance company to put their skates on and pay up.

And get a tenant into the property as quickly as possible.

[Piglet]

Andy M said:

T_Pot said:

I think if it were me, id protect the home first, the BTL is not bringing in an income, doesnt home her and is about to cost her money she clearly can afford, she needs a home first.
then, see if you can fix the btl yourself if you want to help, and then get a tennant, otherwise, she may find she needs to live there

She tells me that the mortgage company didn't seem as concerned about the missed payments on her home, they appear to be looking at her BTL - a property which holds quite a bit of equity, and most of her pension.

This is what I'm concerned about: http://www.consumeractiongroup.co.uk/forum/mortgag...

Eric Mc said:

Was she not insured for the flood damage?

She is, but her insurance company have been very slow to accept the quotes she's submitted to have the work carried out.

Will the Mortgage co not take that into consideration, assuming that she can evidence that this is the case?

Does her insurance not give any protection for loss of income owing to the insured damage? Was there a tenant in there at the time that has moved out or would she have had a void anyway?

TBH I'd get her to give authority for the mortgage co to talk to you before I got any further involved and certainly before I put my hand in my pocket. I'd want to know exactly what the situation was with regard to arrears and missed payments on the BTL and the main property.

I would also want sight of the full correspondence regarding the insurance claim to check that things are as she tells you.

After this crisis period, realistically, can she service all of these properties in the mid term (12 - 18 months)?

Edited by Piglet on Wednesday 18th February 17:37

[Andy M]

Thanks for the replies:

Quick update. 'We' spoke to the mortgage company (I say 'we', in that I sat next to her on the phone, but they'd not talk directly to me). They appeared understanding of the situation, but did stress the need for them to receive payment.

Rather than pay November's payment (£900ish) I've paid January and February on the BTL - this came to just under a grand. My thinking being that she's now got a month to get the place sorted, and she can offer to clear her arrears paying a touch more per month (helped with the recent rate reductions), something they seemed ok with.

I've taken photos of the damp patches on the roof and have checked over the quotes. They're all a bit high, but no reason for the insurance company to drag their heals.

I didn't have chance to check her insurance cover, but she's of mind that it won't cover lost earnings. Either way, the flat itself will only be out of use for 2 months max.

Thanks for the advice offered, much appreciated