Singing Pig

Hi,

I thought id throw this one out there in hope more than anything, before getting involved in property investing I brought my current residential property that is my current home, I brought the 1 bed flat for £124,000 with 100% mortgage on 3 year deal, that ended 6 months ago and due to the current market in the area I didnt stand a chance of selling so had to remortgage, luckily I got it valued for £135,000 and managed to just get a deal with the one account with a 95% mortgage before it was withdrawn otherwise wouldve been stuck on standard varible rate of current lender which was a stupidly high figure.

Prices in the flats have very slowly reduced over the last year (as was valued at £145k 1 year ago) and current prices on the market for 3 others are arond the £129,995 mark. I have 1 and half years left on current deal so cant see prices improving by the next time im due to remortgage so im looking at the negative equity in a year and a half.

All that said my question is, would there be a way (somehow) of moving that mortgage to a BMV property thus giving me the equity in a year and a half to remortgage or any chance of getting a new mortgage to take over the current one and pay the flat off with mortgage based on BMV property?

I know very confusing and im sure ive not worded it correct but hopefully you get the drift of it. Ive got a property that will be in negative equity in a year and a half and want to know if I can move it or transfer mortgage to new prop or any other ideas.

Thanks for reading

J

shouldn't you be concentrating on paying down your very high LTV PPR mortgage before even thinking about more props? 

it's basic risk management?!

i'm assuming that you had a 100% mortgage because you didn;t have any money for a deposit?  now, you are only at 95% because you were fortunate to receive a higher valuation from the surveyor, as the prop isn;t actually worth any more.

i'd suggest you are in a very precarious financial position and yet you seem to want to buy MORE property?!  that's totally mad.

(i thought you would appreciate a few frank words .... as you appear to be think you have more options than you actually have!)

Hi Pod,

Thankyou for your frank words.

If I worded my first message wrong i am sorry, I have no intention to buy more props and I only contribute cashflow to props through a friends company.

I basically just had a thought to possibly move the residential mortgage I currently have to a prop thats BMV with a creative bit of finance, not to continue buying but to get me out of the hole that I know I will be in in a year and a half. Thus giving me the equity to be able to remortgage. I know probably living in cookoo land but thought id ask the wise people of singing pig.

regards

i would have thought the best policy would be to create equity by paying down the mortgage & making improvements to the prop that will add value over and above the cost of the works ........... this is the traditional way that equity is created.  the only other way is via prices moving upwards ....... and we all know where we are in that respect!

keep it simple.

I will continue to pay more off the mortgage over the next year and a half but to the extent of creating enough equity I dont have the funds to get it down 20-30%, also the prop is only 3 years old so not really any improvements I can do.

Ok thanks for your comments, had hoped there be a way but not looking good.

regards

why do you need to achieve 20-30% equity in 1.5 years?  i would have thought that 10% is the likely minimum .... and 5% is currently the minimum needed for remortgaging.

are you being realistic in trying to create 20-30% equity in a prop that is difficult to add value to, in a period of falling prices? 

in the old days (!), people used to pay their PPR mortgages off over 25 years on a repayment basis ....... and it might take 2/3/4/5/6/7/8 (etc) years to achieve 30% equity ........ just ask anyone who bought a prop in 1989!?

at the end of the day, you can't use "creative finance" techniques to "create" equity ....... in fact, they are more likely to reduce it as the inevitable fees and charges bite.

i don;t think there's an easy way!

PPAcquisitions:

I only contribute cashflow to props through a friends company.

On your behalf i am a bit concerned as to what this means!

Are you saying you are providing cash in an ongoing way to support someone else's (failing?) property empire?!

Hi,

Im not sure where you got that a friend has a (failing) property empire? As im talking about my own residential mortgage I need to sort out.

Infact that friend has 14 properties throughout the UK with around £400k equity in with around £1000 positive cashflow per month soming in.

Like I mentioned this is my own residential mortgage that needs sorting and nothing to do with that friend.

Hope this simplifies things

regards

J