Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
My current mortgage arrangement ends in June 2017 which means I have to repay my lender, C&G.
The property was my sole residence until nearly 2 years ago when I had to move nearer my family (for health reasons). As I could not sell the house for an acceptable price I decided to let to tenants for a couple of years – which is acceptable to C&G.
I assumed the only way I could repay the mortgage was by selling the property but, to my surprise, I discovered I could get a BTL mortgage. I would prefer this as I have since retired and the rent I get is essential.
The title deeds to my property show 2 charges, the first being C&G. The second one relates to a loan of £30k (16.7% of value) which was made by a private individual towards the deposit when I first purchased back in 2003. We had a loan agreement drawn up by a solicitor. Despite that, the individual made a unilateral charge on my property.
THE PROBLEM: My understanding is that any new BTL lender will want to have first charge on the property and this would involve asking the individual to come off temporarily while the BTL lender is registered after which note of the minor lender’s interest is returned to the title deeds.
Do I have any legal redress if he refuses to do so, thus preventing me from getting the BTL mortgage?
This is not an unlikely scenario because when I had to restructure my finances in 2008 the individual concerned did precisely that, insisting that he wanted his loan repaid. Then, as now, I do not have the money to repay his loan which is now over £50k with interest – which means I would be forced to sell the property – even though it would not be to my financial benefit.
The only reason he was forced to back down in 2008 is because the value of the property had dropped heavily and I was in negative equity; there was not enough to cover his loan after the mortgage had been paid. That is not the case today.
Does anyone know if he can force this sale? Can it really be acceptable as fair that he, with his minority interest of just 16.7 %, has this amount of control?
I would welcome any comments and/or suggestions of a solicitor that has experience of this sort of thing.
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