Hello,
I have a property with a £110k interest only mortgage (90% LTV). I believe it is in negative equity to the tune of £40k.
I am currently employed by a bank and therefore have a staff mortgage. The T&C's of this mortgage mean that I should not rent out the property.
However my circumstances changed and I moved cities with work and therefore decided to rent out the property as it was empty and I was paying rent in my new location.
I have now accepted a new job offer, which will commence from early March. This means that I will lose my staff mortgage benefit. At first I thought the only impact would be that my mortgage payments would rise when the bank returned me to a SRV.
However now I'm worried about the following:
Q) If I request to move to a BTL mortgage will they hit me with a demand for more capital as my LTV is 90% and this is high for a BTL? For example if they ask me to reduce the LTV to 70% then I would be looking at paying £22k...
Q) Ideally I would like to buy a new property where I am working instead of renting, but I can't sell the first house due to the negative equity. I'm stuck on the first rung of the ladder until the market picks up (or I take a sizeable hit). Is it feasible that the bank would entertain a conversation about another mortgage, which would combine both properties and is this idea even wise?
Q) Do you think my request to transfer to a BTL would trigger some form of investigation that might lead them to uncover that I breached the T&C's and therefore entitle them to make a retrospective claim for lost payments? Could they even repossess on this basis (no capital has ever been paid, as it's interest only).
I think the only sensible thing I have done is to pay a mortgage payment into a savings account each month and never spend the rent money. So I will have something to offer but no where near the £22k.
I apologise for the long message and thank you for reading. Any advice would be greatly appreciated.
Many thanks
I have a property with a £110k interest only mortgage (90% LTV). I believe it is in negative equity to the tune of £40k.
I am currently employed by a bank and therefore have a staff mortgage. The T&C's of this mortgage mean that I should not rent out the property.
However my circumstances changed and I moved cities with work and therefore decided to rent out the property as it was empty and I was paying rent in my new location.
I have now accepted a new job offer, which will commence from early March. This means that I will lose my staff mortgage benefit. At first I thought the only impact would be that my mortgage payments would rise when the bank returned me to a SRV.
However now I'm worried about the following:
Q) If I request to move to a BTL mortgage will they hit me with a demand for more capital as my LTV is 90% and this is high for a BTL? For example if they ask me to reduce the LTV to 70% then I would be looking at paying £22k...
Q) Ideally I would like to buy a new property where I am working instead of renting, but I can't sell the first house due to the negative equity. I'm stuck on the first rung of the ladder until the market picks up (or I take a sizeable hit). Is it feasible that the bank would entertain a conversation about another mortgage, which would combine both properties and is this idea even wise?
Q) Do you think my request to transfer to a BTL would trigger some form of investigation that might lead them to uncover that I breached the T&C's and therefore entitle them to make a retrospective claim for lost payments? Could they even repossess on this basis (no capital has ever been paid, as it's interest only).
I think the only sensible thing I have done is to pay a mortgage payment into a savings account each month and never spend the rent money. So I will have something to offer but no where near the £22k.
I apologise for the long message and thank you for reading. Any advice would be greatly appreciated.
Many thanks