investment mortgage

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moonfish

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due to buyer pulling out at the last minute while we selling up a buying a new place in 2007 i was forced into renting out old place and becoming a reluctant landlord.mortgage.. on the house is a investment mortgage so the only way we can manage is having it on interest only ...does anyone know if a bank would be willing to reduce the mortgage from investment to regular mortgage and then we would be able to pay back some capital?f

has anyone tried to do this ?it seems a waste having it on investment and no capital being paid off with no benefit to either party.
 
This is a bit unclear. Are you asking if you could get them to reduce the rate charged from the (higher?) investment mortgage rate to the (lower?) owner occupier/home loan rate? Or if they will let you pay some capital off? Why would they prevent you from paying off capital? What lender? Have you discussed the issue with them?
 
if they reduce it from investment mortgage to owner occupier loan it would enable us to come of interest only
 
basically i cannot afford the repayments on the investment mortgage higher interest higher repayments..so the bank put me on a interest only..
if the bank put me on owner occupier interest rates for that property i would be more capable of making the full repayment
 
I thought that in general it made sense to be on interest only for an investment property? Or maybe a little less so ever since the interest that could be written off against rental income dropped from 100% to 75%?

Anyway - if you want a lower rate and/or to make interest and capital repayments then you need to come up with a viable proposal that is mutually beneficial to you and the lender. Then approach them with this and see how it goes. Best to be well prepared and have your story straight. I don't think that anybody can predict how it will go especially not knowing the overall details of your situation, who the lender is etc.

Hope this helps. Good luck.
 
The Bank are primarily interested in getting their money back. If you are currently living in this property as your PDH then MARP procedures would apply in terms of any approach to the Bank. If the property is rented out, then the Bank will need a full appraisal of your current financial position before any agreement is reached. As you appear to be renting out the property this is the approach that will need to be made. The Bank are highly unlikley to reduce the current rate of the loan agreement. Is your rent from the property currently higher than the associated interest on the loan? Is the property in negative equity?
 
If you can only afford to pay for example the mortgage interest of 1000 euros, then I can't see the bank offering you a lower mortgage rate where you might now pay 700 interest and 300 capital. The bank are still getting ONLY 1000 euros and now only for a limited amount of time, I.e. until the capital is paid off. This doesn't benefit the bank in any way...... Except for maybe improving their loan books ?????
 
The key issue here is affordabiliy. As one poster said if the amount of money paid remains the same, for the bank there is nothing but improvement in their capital ratings. I wonder if there is another way to deal with the rental income so that it buys more back at the bank. One thing that I have been wondering is where the mortgage holder asks the bank to appoint a rent receiver. As the rent is now going to the bank, is it correct to say that the mortgage holder does not have to declare this as income or is it income that they remain liable for even though they dont get id? If its the former, the bank can apply more of the rent towards the repayment of the capital as the restrictions on reliefs would no longer apply and therefore the mortgage holder benefits in some way. Just thinking out loud here. Its something that I have been wondering about.
 
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