First Post - Help Needed

[Job-less Phil]

First I would like to say Hello to everyone on this site.

So "HELLO EVERYONE"

Next, I need help with some advice on how to sell a flat without going through an expensive estate agent.

Just put foreward a few basic statements first -

One - I do not want to sell the flat !

Two - My wife wants us to keep the flat !

Three - The flat has been a good source of income since the day I bought it.

Reason for selling - The mortgage company that I am with have decided that after four years of renting it out, they can no longer permit me to stay on the same mortgage.

I am paying around £73 per month on an interest only mortgage, but they want me to go onto a different rate.

This would double the payments and make any profit disappear completly. They have also de-valued the flat to £23K, which is almost impossible ( IMO )

They also want £800 to set this mortgage up, which I do not have as I am now unemployed.

The mortgage company/bank caused the problems in the first place, and now they are making things even more difficult.

The tenant has never caused me a days bit of bother, and I would like him to stay in the property.

Any advice would be most welcome

Thanks in advance, Phil

[SaintJay]

if you only make a profit on an interest only mortgage, you aren't making any profit.

if you can't prove you have some way of paying back the intial loan, the bank will want their money back, or the property.

sell it or start paying back the principle. either way - profit won't be visiting you this christmas or any time in the next 2 / 3 years.

[fallingbuzzard]

No chance of selling to the tenant?

[Job-less Phil]

if you only make a profit on an interest only mortgage, you aren't making any profit.

if you can't prove you have some way of paying back the intial loan, the bank will want their money back, or the property.

sell it or start paying back the principle. either way - profit won't be visiting you this christmas or any time in the next 2 / 3 years.

Not sure what you are talking about.

If I sell the place before the mortgage term is over - another 20 years, that will pay the debt back.

[johnny5thumbs]

Before anyone can really answer your question properly, why is the mortgage co. is calling in the loan. Is it because you've been BTL'ing, without telling them? If it is, that would explain why they want a better slice of the action, since the risk is higher from their point of view.

But back to your question ... if the people on HPC had a 90% foolproof way of avoiding using estate agents, estate agents would no longer exist now since the word would have spread and agents would by now be an extinct species. I hate most of 'em, but I still have to use them if I want a serious chance of a result.

There are other ways, and I'm sure other HPC'ers will enlighten you, but I won't, because I've never had any success in selling except through an estate agent. One day ... but not yet.

btw ... how did the mortgage co. find out ?

[johnny5thumbs]

[... and another thing ...

... what kind of location are you operating in, that by doubling the mortgage to £140 odd quid a month takes you into loss-making territory? Any area that operates on rental levels as low as that should be producing a 10% yield or better - just for the aggro value.

[SaintJay]

Not sure what you are talking about.

If I sell the place before the mortgage term is over - another 20 years, that will pay the debt back.

If you sell it for at least the same price you paid.

[Job-less Phil]

The flat is in Grimsby - Not too bad an area, and no vandalism in last four years.

I pay £72 per month on the mortgage

Rent it out for £295 per month

The solicitor advised me that short term letting on residential mortgages goes on all the time. Mortgage companies "WERE" turning a blind eye to this fact when times were good for them.

Now they have caused the crash problems, they are tightening up on deals.

As for selling to the tenant, he has recently become unemployed as well. Not sure if he would be allowed a mortgage.

I only paid £25 K for the flat - Last one on same block sold for £34K.

Might have a look on Ebay, and see what their sucsess rate is for selling properties.

[RandomBear]

At the moment many EAs are willing to take on property for as little as a 1% fee. Even the websites where you effectively do sell the property yourself charge 0.5%, so 1% is pretty good. On a 30k flat (let's assume you can sell it there) it's only 300 pounds (!) and you would clear 4,700 before solicitors' costs. The problem is that the legal work and conveyancing etc is the expensive bit, and that is the bit you can't do by yourself.

Good luck but I don't think you need me to tell you that the situation is all of your own making - if you hadn't lied about what you were doing with the property this would never have occured.

[sleepwello'nights]

At the moment many EAs are willing to take on property for as little as a 1% fee. Even the websites where you effectively do sell the property yourself charge 0.5%, so 1% is pretty good. On a 30k flat (let's assume you can sell it there) it's only 300 pounds (!) and you would clear 4,700 before solicitors' costs. The problem is that the legal work and conveyancing etc is the expensive bit, and that is the bit you can't do by yourself.

Good luck but I don't think you need me to tell you that the situation is all of your own making - if you hadn't lied about what you were doing with the property this would never have occured.

Just tell them you're moving back in.

[Job-less Phil]

This forum seems to have everything.

I have only posted one subject and have received a very wide variety of answers.

Been told that I am a liar.

Been told I should tell more lies.

Given good advice

Been given poor advice.

If I was not in a state of confusion before, I most certainly am now.

Many thanks for all the advice though. I know people are only trying to help.

Merry Christmas to everyone ( Even the VI,s )

Phil

[Butthead]

I am paying around £73 per month on an interest only mortgage, but they want me to go onto a different rate.

This would double the payments and make any profit disappear completly.

I pay £72 per month on the mortgage

Rent it out for £295 per month

Ignoring the inconsistency of how much you pay, why would doubling the mortgage payment to £146/£144pm make profit disappear "completly" if you rent it out for £295 per month?

[Job-less Phil]

The double mortgage would still leave me with plenty of profit. That is not really the problem

If I were to swap mortgages, the requirements are a 25% deposit on property.

As I am unemployed, there is no chance whatsoever of raising even five hundred quid.

I can not get a mortgage, and bank will not allow me to keep things the way they are.

Have as much money as a stone on the beach, and bank are trying to squeeze me for every drop

The only option they will give, is for me to sell.

Not a welcome choice from my point of view.

Unusual thing is that I have a very goog profit margin on the flat, but bank are not interested.

The mortgage advisor even tried to get me to switch bank accounts to them for a £50 reward.

The greed was evident.

[porca misèria]

This forum seems to have everything.

I have only posted one subject and have received a very wide variety of answers.

You come on here, proclaim yourself one of the get-rich-quick spivs who busted the system ... and you expect to be taken seriously?

[Job-less Phil]

Thanks for your polite reply to my post porca.

All the world needs right now is people like you with one-sided jealous opinions.

Lack of understanding is what the ignorant start wars with.

[jaycey]

Phil

I feel really sorry for you. It obviously took some balls to get up off your backside and get yourself an investment that's doing pretty well.

Obviously there's a few people posting who would love to have your backside and balls... if you know what I mean.

I see where the bank are coming from, but obviously it's sad that they can't see that you have a good, solid business going.

For what it's worth, I'd go to the EA that looked like they might get the highest price. You can hate the EAs all you like (I do), but if they get you an extra 5% on the price, their fees seem small.

Best of luck

Edited January 12, 2010 by jaycey

[Mykingdomforahorse]

Phil,

If you got the mortgage on the assumption that you were going to live in the property and you did not intend to then you lied to the mortgage company. They will think that you have a duty to disclose a change of circumstances if you did live in the property and then moved out and subsequently rented it out.

Basically you lied to the mortgage company or omitted to tell them an important change in circumstances. If you have been honest in the first place you would have a) not have been able to get the loan in the first place OR on a higher rate / different terms and conditions.

It's a bit late to cry about life being unfair now but maybe if everyone had been honest in the part (including all the liar bankers) then we as a country would not be in the current mess we now have.

[Rozza]

Don’t like be nasty but I couldnt agree more, I would feel sorry for anyone losing their home but you have taken out a loan fraudulently, the bank have found out and are saying “you have to now do this properly” and you don’t like it. If it was your main home and you lived there then I would wish you all the luck. But you obviously lied your ass off in order to get the mortgage and are now making a profit on money that you were lent for a different purpose (namely buying your own home).

So either get the 25% and suck up the interest rate change or sell it.

I’m as sick as a lot of people of all the BTL brigade who have taken out liar loans and now cant understand why they have to pay the rate of interest they should have been paying before. You should feel lucky the bank aren’t in a position to demand the back dated interest you should have been paying until now.

The mistake you made was probably listening to “The solicitor advised me that short term letting on residential mortgages goes on all the time”. Doesn’t make it right does it

Bottom line is, you bought for 25k and nearby flat sold for 34k, given that you have make 223 quid a month (about 80 more than you should have) without having to put down the 25% deposit you should have my advice would be to sell, take the cash and thank your lucky stars