You took out an interest only Mortgage 25 years ago, and now the fixed term is up, and you are unable to refinance or do not wish to keep the property and looking to sell?
Naturally the interest only option was very attractive to a homeowner or a landlord as you will only be paying the minimum amount. The total borrowed sum remains payable in full at the end of fixed term mortgage which can be anything from 10 to up to 35 years. Timing is of the essence as the banks can step in, repossess the property to sell it for a profit. Why not sell your property quickly, pay off the bank and keep any surplus equity?
With a repayment mortgage, you are paying off capital (amount borrowed) plus interest and over 25-year term, it will be paid off in full, but the repayments are almost double the interest only payments or higher depending on interest rates.
In this guide we will explore what to do when your mortgage term ends, your options at the end of mortgage term and what happens at the end of a buy to let mortgage term?
What to do when mortgage term ends?
If you had a fixed term of 5 years, this means that interest being charged was fixed and now the term has come to an end, you can speak to your lender and either fix the mortgage term again, depending on your eligibility and repayment history or interest will revert to a Standard Variable Rate, or SVR for short, which is set by the bank. It is usually a percentage higher than the Bank of England’s base rate.
Can you sell your house before paying off the mortgage in the UK?
Yes, you can sell your house, but mortgage will have to paid off first. Most British homeowners have taken out mortgages when they bought their house or flat. As the needs of family change or due to change in personal circumstances, you must move home. Once you sell your property, you will have to repay the mortgage along with any early repayment charges if there are any. If you have favourable interest rate on your mortgage, you can speak to your bank or building society and ask if they will port your mortgage across to your new property – this could save you thousands of pounds in early redemption charges, arrangements fees and broker fees. If this option is not available, once your property sells, the mortgage will have to paid off first and the balance returned to you via your solicitors.
What are your options at the end of mortgage term?
If you fixed term mortgage has come to an end and the bank won’t extend the term either due to your age or other factors, then your only option is to sell the property before the bank forces sale. The bank can step in and repossess the property if you haven’t been in constant contact with them or you have not given them any assurances regarding the sale of property. Be sure to read UK Government’s guide on selling your home.
Selling a house before end of mortgage term is possible. We can help you as we are looking to buy any property. We will make you a cash offer with no deduction, no estate agent fees or legal fees.
What happens at the end of a buy to let mortgage term?
If you are a landlord looking to release equity perhaps for retirement or put your money into another business, it maybe sensible to sell your buy to let property at the end of its mortgage term.
We’ve seen the anti-landlord rhetoric in the media with constant landlord bashing, and section 24 tax that has meant landlords have exited property market in their droves. Being a landlord is a thankless task. You are not being recognised for providing safe accommodation, a basic human need. Yes, your tenants will have paid you rent, but you were also acted as their councillor when dealing with their personal issues, they forgot their key, fell out with their partner or fallen on hard times. You’ve answered your phone in the early hours or at the weekends and sorted out maintenance issues quickly.
As we are landlords too, we are on your side.
If you are unable to pay your mortgage at end of term, there’s a solution.
Property Saviour work with landlords who are looking to sell their rental properties. Whether you have a portfolio of buy to let mortgages coming to end of term or a single property, we are here to help. We will make you a cash offer, work with your bank if they are enforcing action and will complete the purchase quickly.
Your property will have cash flowed positively and now it might be time to take the equity out and re-invest it into another business or use it as peace of mind fund for a well-deserved retirement.
Are you an owner-occupier with an interest only mortgage coming to end of term?
If you are an owner-occupier with interest only mortgage coming to an end and you are unable to re-mortgage due to your age or other reasons, we can help you.
By selling your home to a cash buyer, you can release equity which can be used to either buy another property or secure a long term rental property.
There are no estate agents involved as you will be dealing direct with us, a professional property buying company with a track record of many satisfied homeowners.
Make an enquiry with us today to see how we can help you.
Yes you can sell your home during a fixed term mortgage. If you need to sell, it is worth speaking to your lender to ensure that you can port your mortgage across to your new purchase otherwise you may have to pay early redemption charges. These can run into thousands of pounds easily.
Once you reach end of your fixed rate mortgage, you can remortgage with another lender or phone your existing lender and speak to what products are available.
If you do not renew to another mortgage product, you will move to a Standard Variable Rate or SVR – this is a rate set by your lender.
At the end of mortgage term, you to pay the mortgage balance in full. This is because you will have been paying interest only element of the mortgage and not capital repayment. The capital or original borrowed sum must still be paid. One option available to you is to sell your property quickly before the bank repossesses it. We can help.
When you sell your house, the mortgage balance including any fees or arrears must be paid in full. Your solicitor will request from the bank a mortgage redemption figure. Once this paid from the proceeds of sale, the balance is due to you less solicitors fees.
Yes you can sell your home before your mortgage term is up. Property Saviour can save you the hassle of dealing with estate agents because we buy properties directly from homeowners.
Yes you can. There should be no any Early Redemption Charges that come when you take out a mortgage. It is always worth checking with your lender.
Yes you search the whole of market or use a broker BUT if you sign up with a new lender, there may be additional fees such as arrangement fees, broker fees and survey fees. You can also ring your current lender and ask them what sort fixed mortgage deal they will offer you. The benefit of using this method is that you will save yourself fees. On paper, another lender might offer you better terms but when you add their fees to the loan amount, it might work out more expensive.
It depends on your lender and whether or not you took out a ‘portable mortgage’. Ask your lender first.
