Want to sell a investment property that is in negative equity

N

Norde

Guest
Hi there,
I am looking (on behalf of my friend) for some advice on how to approach the banks. The situation is she has two propertys.

1. Principal private residence (currently in negative equity)
2. Investment property (possibly in negative equity by 50k)

Both propertys are currently on interest only mortages with Bank of Scotland(I think) and are both rented out. She does not live in either at present. The rent on property 2 is just about covering the interest only and she wishes to sell it at this point. She is prepared to sell it at the negative equity of 50k and would have the intenetion of not walking away from this debt but paying this off.
As far as I am aware property 1 is on a tracker mortgage at the moment and property 2 is on a variable. Obviously she would not like to lose the tracker in the course of the transactions should she be lucky enough to sell.

I am looking for any advice/experience that anybody might have about the above situation and how would be the best way to approach the bank on this one.
I have said to her that she should go about reading the small print on her mortgage contract on property 1 regarding keeping her tracker so that she is fully aware where she stands when she goes to talk to them about it.
Thanks in advance N.
 
Neither property is a PPR. They are both investment properties.
Both are rented out.
 
sorry! slip of the tongue. property 1 was her ppr a couple of years ago and this is the one she would be holding on to with a view to eventually moving back in there.
 
Bank of Scotland have said that they are doing deals on investment properties. Check out this thread.

They want to run down their loan book in Ireland, so I would say that they will be open to suggestions. They might agree to writing off the shortfall on the investment property and that should be your friend's first stance.

"I am reviewing my options. I might sell this investment property if you accept the proceeds in settlement of the mortgage".

However, she might well get a good package deal. They would be more interested in getting rid of the tracker on her home than the investment property mortgage. So, I think she should go in with all options open. They just might accept the sale of both properties and write off the shorfall. It's well worth asking for. In fact, that would be my initial approach, then settle for something less.

Please make sure to report back on how she gets on.

Brendan
 
thanks brendan,

I had found this post alright. I do not think that she wants to sell property 1 though. in any case I have a feeling the whole process may take quite some time before it is resolved. I will be sure to post back. reagards n.
 
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