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longtomsilver

Advice Please Remortgage!

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A friend of mine bought a property four years ago for £180k and has a IO mortgage with one of those impaired credit mortgage providers for £160k I/O at a fix of 8% soon coming off this and on to their SVR. The mortgage is in joint names with his ex (with whom he has a son - 3 years old shared custody). His ex was the bad credit risk and has not contributed her share (40%) ever since she left him over a year ago. The house is worth maximum £140k at todays prices and the mortgage provider is unwilling to allow him to move onto a more favourable rate this is in spite of the fact he has never ever missed a payment. They are only willing to lend him £60k of affordability (3x his salary) and clearly no other provider will be willing to take him on with this negitive equity.

His mortgage payment is pretty much his entire salary.

Do you think it would be feasible for him to write to the bank and ask if they would be prepared to write off a portion of the loan so that he has 10% equity if he moves his mortgage to another provider (they have had £50k off him so taking a hit of 34k they'll still be quids in and they don't like having him on their books anyway re. the £60k max remortgage!).

I know this sounds outlandish but aren't the banks offering some BTLers this option?

He loves the house and doesn't want to move. If he was to walk away from his obligations the bank would have very little upside (house with no money in it) and the fact that children are involved may save his bacon with regards any insolvency and court ordered payments.

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The house is worth maximum £140k at todays prices

So really it will probably sell for £130k, less £5k agent and solicitors fees.

if they would be prepared to write off a portion of the loan so that he has 10% equity if he moves his mortgage to another provider (they have had £50k off him so taking a hit of 34k they'll still be quids in)

so really they will be down £43k, and that doesn't include what it cost the bank to borrow the money themselves from the international money markets.

His mortgage payment is pretty much his entire salary....He loves the house and doesn't want to move

I think he needs to realise that his personal situation has changed and that the house is no longer affordable. He clearly can't stay there and can't expect the bank to continue funding this unreasonable lifestyle. I'll be very surprised if the bank agrees to write of such a large amount.

Edited by PbroAgent

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Well it looks as though he's between the devil and the deep blue sea then. I'm a HPCer and I priced the house realistically, I had the same style of house on the se estate and sold mine tail end of 2009 for £143k within two weeks of putting it on the Market for £149,950 while another neighbour struggled to Market his at £159,950 (it is now on for £149,950).

I can't see the bank having a more favourable outcome otherwise as he'll simply walk. It's not that he is unwilling to keep up payments, he can't and the bank was equally at fault for affording him this lifestyle in the first place.

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Why would anybody sign up for a £180k mortgage, 9 times his salary, at a fixed rate of 8% interest? Madness!

He could have rented with none of this drama as opposed to signing up to this.

And not even for the privelledge of 'buying' a house as it was on INTEREST ONLY!!

Jesus wept!

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Why would anybody sign up for a £180k mortgage, 9 times his salary, at a fixed rate of 8% interest? Madness!

He could have rented with none of this drama as opposed to signing up to this.

And not even for the privelledge of 'buying' a house as it was on INTEREST ONLY!!

Jesus wept!

It's £160k I/O not that this makes much difference, lol! At the time he was with his g/friend and I suppose their combined income was £35k

Why? It's. Pwoperdy you see and they only ever go up in value (rolls eyes).

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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