Buy to let mortgage coming to an end need some advice

I have a buy to let tracker mortgage which the term ends next year. Pepper took over the loan for PTSB.
I have the property for sale at the moment but am not getting offers. The price is reasonable so don't know why.
I don't have a tenant at the moment as I needed vacant possession and I am paying the mortgage myself. I am paying an extra 1000 per month off the main loan to get the loan down a bit. Loan is 160,000 value of house is 210,000
What happens if the house is still not sold when the term is up?
I would like to extend the term until the house sells and can afford to pay the extra. Some of the money I hoped for my pension is tied up in the house so I don't want to lose that.
Does anyone have any advice or has been through something like this?

Is this an interest only mortgage where you were only making interest repayments and no capital repayments or something? Otherwise how come the capital won't be cleared at the end of the mortgage term? Did you get into arrears or have it split into active and warehoused parts and that's the reason or something?

Normally at the end of the term the lender will expect the outstanding capital to be repaid whether that's on an ongoing basis for an annuity (capital plus interest) repayment mortgage or an interest only mortgage. In the latter case you're expected to take a plan to pay the capital lump sum when the term ends. What does your loan agreement say? Didn't you have a plan for this eventuality?

Maybe you'll be able to extend it but you should probably be sounding them out about this sooner rather than later.

If you aren't getting offers on the property then even if you think it's a fair price it's probably too high. Of course it's also probably a bit slower now than spring/summer/autumn, but with the property market the way it is at the moment with demand far outstripping supply in most areas it really shouldn't be difficult to sell if the price is right.

mailiam said:

What happens if the house is still not sold when the term is up?
I would like to extend the term until the house sells and can afford to pay the extra. Some of the money I hoped for my pension is tied up in the house so I don't want to lose that.

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If it were a family home, Pepper could do nothing about it.

In theory, they have more options with a buy to let.

In practice, they will write to you when the term is up, and ask for repayment.

You should then give them a call and tell them that the house is on the market and you expect to pay off the mortgage in the near future.

They should be very happy with that.

It is odd that you are not getting any offers. As ClubMan says, the price might be too high.

When did the house go up for sale, how dud you decide a price, have you many viewings, have you asked the auctioneer why there are no offers.

@Brendan Burgess - if they continue to pay the interest only, how much fuss are Pepper likely to make?

DannyBoyD said:

@Brendan Burgess - if they continue to pay the interest only, how much fuss are Pepper likely to make?

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It hasn't even been established that it's an interest only mortgage or why it's likely that (some of?) the capital principal will be oustanding at maturity.

And this suggests that some capital is being repaid:

mailiam said:

I am paying an extra 1000 per month off the main loan to get the loan down a bit.

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@ClubMan

It is very likely to be an interest-only mortgage. They were sold by ptsb to Pepper. So unless we are told otherwise, assume that.

Brendan

DannyBoyD said:

if they continue to pay the interest only, how much fuss are Pepper likely to make?

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They will write and demand the money.

They are unlikely to make any fuss if they don't get it quickly.

But, there is always a risk, although small, that they could appoint a Receiver.

Brendan

@mailiam

On reflection, I think you should contact Pepper now.

Tell them that your plan is to sell the house and redeem the loan. Tell them that you are not getting much interest.

Ask them if you do that, can you extend the termination date?

By engaging in advance, and working with them, it will give them comfort and reduce the likelihood of them doing anything stupid like appointing a Receiver.

Brendan

Hi all thanks for the replies.
Just to clarify, the mortgage is a buy to let interest only tracker mortgage so original loan still outstanding as the crash happened and couldn't make any extra payments off the main loan as I had intended.
Waited for market to recover and have had it on the market for a year now. The Price is ten thousand more than it was purchased in 2006 so not too high considering how prices have increased.
I was concerned that the lender would take the house and sell it at any price to get their money and I would be left owing the balance to them. I have been in touch with them and explained it is on the market but not getting any clear information on what will happen if it is not sold before the loan is due to be paid.

If I were in your shoes I would relet and use all the net rent money to fire off the mortgage.

I strongly suspect Pepper will leave sleeping dogs lie for a very long time, if they see money coming in.

If they give you hassle, you can always restart the sale process.