Advice on how to get bank to restructure mortgage shortfall over life of mortgage

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Old Jim

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The bank are asking for a letter from me to pay back the NE remaining after house sale over a seven year period instead of over the life of the original mortgage. The monthly repayment over the seven years is 1200 which is a lot of money. The bank are refusing to release the deeds until this is agreed.
Anyone any advice on how to get the bank to agree to the longer term?
 
It is more than I was paying on the mortgage and we are one income down + 2 kids up than when we got the original mortgage.
Combined with rent, it is a big chunk of money.
It is probably affordable at a stretch but means renting for several years

Just wondering if others have successfully gotten a bank to pay off a NE over the original life of the mortgage?
 
If you really want to sell and get out then you could sign it and then 'negotiate' further. Let's face it, if they bring you to court and you can't pay and have engaged, the same rules apply reagrding who the judge will side with i.e. you. I'd play the hardball as long as you don't need to sell though.
 
Hi Jim

I thought that banks were generally allowing people to repay the shortfall over the remaining term of the mortgage and at the mortgage rate, where the mortgage was not sustainable? But it seems that your mortgage was sustainable, it's just that you wanted/had to move.

Have you used the savings you referred to in this post to reduce the shortfall? It seemed then that while the mortgage exceeded the house value, you were not in negative equity as you had sufficient savings.

If it's a SVR mortgage, then use your savings to pay it off now.

If it's a cheap tracker, then the 7 year deal is a good one and you should go for it.

Brendan
 
Thanks all for the replies.
The house eventually sold for slightly less that originally agreed so my savings won't entirely cover the NE remaining. However that option is still available to me but I am unsure if that is the best use of the money. I had hoped to build my new home using the savings. It is a variable rate mortgage. If I have to repay over the seven years then it ruins any chance of getting a mortgage hence I want to repay over the original mortgage term.
 
Will the bank have any security on your remaining repayments. ? If not I'd agree to their terms at the moment and after a while i'd reduce repayments to suit better.
 
The reality is that you have the funds to discharge most of the shortfall, and the bank should have insisted on this.

As they haven't, they have offered you a great deal. Snatch it with both hands.

I think you should put off the idea of building your new house for the moment. You are paying a high standard variable rate on the personal loan. It makes sense to pay this off with the lump-sum and start saving again to be able to build after a few years.

I don't think any bank will lend to you if you have an outstanding loan on which you are making high repayments.

Brendan
 
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