Am I stuck in this house?
Am I stuck in this house?
Author
Discussion

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
Firstly, apologies if this is in the wrong forum, but I thought it was more of a financial matter than property.

Basically my wife I and relocated 100miles away from 'home' just over 4 years ago and bought our first home with a 100% mortgage (I know, I know).

Anyway, we both now want to move back; ideas of starting a family combined with close relatives not getting any younger etc...

I don't plan to change jobs - I will just make the commute.

House wise etc, the plan was to rent ours and move in with my parents for 18months or so to save up a deposit for another house.

This morning however I have spoken to my lender and they advised they do not cater for buy to let.

Looking around I'd need to be at 85%LTV to secure a BTL elsewhere, however we are at around 94% LTV at present.

We really don't want to sell right now, as we may end up at a loss and we feel that if we could manage to let our house, then save for 18months we would be in such a good position long term.

So how would I go about resolving this, or am I going to come up against the impossible here?

Thanks for any advice

trickywoo

13,147 posts

247 months

Monday 26th September 2011
quotequote all
Are you really going to commute 1,000 miles a week?

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
trickywoo said:
Are you really going to commute 1,000 miles a week?
Yes.

I won't always be in the office as I am also site based and that can be anywhere in the country anyway, and I do hope to negotiate to work from home 1 day per week. Also if i change over to a company car (currently on car allowance) I would have a fuel card.

A couple of other guys in here already do around 70miles each way, but they don't have such direct routes as I would so spend a similar amount of time in their vehicles.

It's 3hrs/day, but I think the quality of life at the weekends etc would make up for it.

jonah35

3,940 posts

174 months

Monday 26th September 2011
quotequote all
D1bram said:
Firstly, apologies if this is in the wrong forum, but I thought it was more of a financial matter than property.

Basically my wife I and relocated 100miles away from 'home' just over 4 years ago and bought our first home with a 100% mortgage (I know, I know).

Anyway, we both now want to move back; ideas of starting a family combined with close relatives not getting any younger etc...

I don't plan to change jobs - I will just make the commute.

House wise etc, the plan was to rent ours and move in with my parents for 18months or so to save up a deposit for another house.

This morning however I have spoken to my lender and they advised they do not cater for buy to let.

Looking around I'd need to be at 85%LTV to secure a BTL elsewhere, however we are at around 94% LTV at present.

We really don't want to sell right now, as we may end up at a loss and we feel that if we could manage to let our house, then save for 18months we would be in such a good position long term.

So how would I go about resolving this, or am I going to come up against the impossible here?

Thanks for any advice
why do you think long term you are in a good position? could it be that long term you could get yourself into even more of a financial pickle? i have seen a few people who had 100% mortgages and they want to borrow on another property

as a suggestion, you can't let out your house with your current lender legally can you or do they do consent to let for a few months?

can't you keep paying down your debt until you have 85% ltv and then reassess

be careful against borrowing more money - if house prices fall then your current home will be underwater and potentially your new one too thereby compounding the problem

as with the governments in this country, borrowing more to get yourself out of a debt hole may not be the answer

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
Plan is not to borrow more initially.

We would stay with my parent for 18months or so and save minimum 10% deposit to buy another house, renting out our current one would free up the cash to enable us to save.

I think I'd be in a good position long term as in 25years the current house mortgage will be paid off and this would have been acheived with rental income generated by the property itself.

We could stay put 4 years and be at the 85% LTV threshold, however we'd then need to start saving for a deposit on the new place.

I would just sell now if I thought it was a viable option, but I don't see that it is. And as said, a couple of years living with family now could set us up with a second propert as a long term investment.

walm

10,632 posts

219 months

Monday 26th September 2011
quotequote all
D1bram said:
...we are at around 94% LTV at present... we really don't want to sell right now, as we may end up at a loss...
Does not compute.

Either you have equity or you don't...

Perhaps what you are saying is that you don't really know the value of the house.
That's very likely true.

Why not put it on the market and see? You might be nicely surprised...

Otherwise, I don't think there is any strictly legal way of getting out of it... i.e. you could obviously go ahead and rent anyway but I am sure the legal bods will be able to tell me why this is such a no-no...

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
I don't think anyone knows the true value of anything until they sell.

So yes, my current situation is based on what we paid.

johnfm

13,709 posts

267 months

Monday 26th September 2011
quotequote all
1. what is realistic rental achievable?

2. What is monthly payment on a repayment basis?

Is 1 greater than 2?

Is it greater enough to give you some comfort?

Do you have enough readies to cover voids if you cannot find a tenant?

If you can , rent the thing out.

If you never miss a payment, why would know or care - they have defaulters to worry about.


  • cue soovy & tonker - but in reality, the lender has enough on its plate getting those in arrears to pay up.

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
johnfm said:
1. what is realistic rental achievable?

2. What is monthly payment on a repayment basis?

Is 1 greater than 2?

Is it greater enough to give you some comfort?

Do you have enough readies to cover voids if you cannot find a tenant?

If you can , rent the thing out.

If you never miss a payment, why would know or care - they have defaulters to worry about.


  • cue soovy & tonker - but in reality, the lender has enough on its plate getting those in arrears to pay up.
I know where you're coming from, I'm a by the book type and experience has taught me that anything that can go wrong will where I'm involved.

As for covering the payment, I think the rent would just about be covered, and yes I'm sure we could manage a few voids.

We have a reasonable disposable income now and could comfortably afford to pay out a bit more.

I could also sell my MX5 to raise £6k ish if need be but would rather not.

johnfm

13,709 posts

267 months

Monday 26th September 2011
quotequote all
rent 'just about be covered'

do you mean the rent will cover mortgage payments?


At the end of the day - you are supposed to inform th ebank if you no longer reside in the property. Their loan to you was on the basis of you living in the house etc etc.

In reality, as I said, on the scale of things unless you intend to rent it out, collect the rent and not pay any payments, then let them take the house and do a runner - I don't think it is that big a deal given the other more pressing issues that a lender has with borrowers who are defaulting.

Either way, good luck.

D1bram

Original Poster:

1,518 posts

188 months

Monday 26th September 2011
quotequote all
Sorry, yes, I meant the rent would cover the mortgage.

Thanks for your advice, it's more about us wishing to relocate than increase wealth, but just want to make sure we go about it the best way.

Whilst 6% may only seem a very small amount of equity we have paid many thousands of pounds to get there and don't want to lose it by rushing into selling at a bad time.

Grandad Gaz

5,220 posts

263 months

Monday 26th September 2011
quotequote all
johnfm said:
1. what is realistic rental achievable?

2. What is monthly payment on a repayment basis?

Is 1 greater than 2?

Is it greater enough to give you some comfort?

Do you have enough readies to cover voids if you cannot find a tenant?

If you can , rent the thing out.

If you never miss a payment, why would know or care - they have defaulters to worry about.
And....have you allowed for any increase in interest rates?