if my house is reposessed and in negative equity what happens?

tattoed_bum

are the houses all joined together or are they all separate as in could you sell fil house without having to sell all of it and have him move in with one of you

neas

Now we understand the circumstances.

And the businesses have they both failed as well? or can they be sold to try and reduce the mortgage coming out from the house?

If you could get 150-200k from the business this may reduce the mortgage down so the shortfall (if any) is manageable.

Otherwise as you say it is a difficult situation, normal working people even 4 of you (FIL and MIL prob won't/can't work as you say).

I'd go to citizens advice maybe and try and get firstly as much benefit as you can.. disabled benefit child tax credit etc etc. It might scrap the 1000 down to 600-700 every bit helps.

Otherwise to asnwer first question when property gets repossessed it will be sold by the bank quickly... so it will reduce the price for example they miht sell it for 200-300k for a quick sale!... this would be bad for you guys.

The funny thing about repossesion is.. You took out a loan against a house... the house is the guarantee if you forego repaying the debt. If the guarantee doesn't cover the mortgage they will chase the mortgage owner (if its joint all of you) for the remaining balance.

So if you owe 500k... and are falling into arrears this as you say will get very bad. I really think its a hard situation you are in.

The weird thing is if you think about it just logically you bought a house for 350k a while back... borrowed more money against the house (because house prices had risen up) to do it up... now house prices are coming down it works the opposite way unfortunately. it would've worked perfectly if your circumstances didnt change and house prices keep rising... but they dont always keep rising sometimes they decrease as they are now... and they will do for at least 2-3 years in my opinion. So something has to be done because your in negative equity and are up against repossesion.. which means the will slap your dad with a big debt.

Might be worth asking on the DFW board or the Bankrupcy board because we are talking about such large numbers here... that the house will prob have to be sold/repossessed in most solutions... the challenge then is not crippling the mortgage holders forever.

Im sorry theres no magic bulle with such a situation. If the neg equity was small 10-20k on a 2 bedroom house you'd be able to manage it by taking over/time/coupinng/saving money elsewhere... but this is prob too hard to meet for rest of family unless you can repay some of mortgage from selling other assets (i.e businesses).

neas

tattoed_bum wrote: »

are the houses all joined together or are they all separate as in could you sell fil house without having to sell all of it and have him move in with one of you

How woukld that work.. if mortgage (as it sounds like) is on 'one whole property'. The 'MILL' they originally bought. I doubt they split it out.

But you could also try renting the other buildings out.. and move everyone closer together into ONE of the sections.. it would be a tight squeeze but the extra income would help...

Or turn the house into a B+B/holiday home.

But needs to be way of generatng the income required for mortgage repayments.

Busymumof5

All houses are joined together so has to be sold as one property, thats what makes it so hard to sell and makes the value a lot lower than if they were separate.
As I said before I came here for friendly advice, I feel very misunderstood and feel that I'm having to justify myself all the time. Thank you to all the people who have tried to give helpful friendly advice, but I feel this thread is on a road to nowhere so I'm going to end it now.

Optimisticpair

I've read your other posts. This is a good resource and many on the DFW board will understand what you are going through and will offer ideas for how you can help yourselves

I think you should get onto DFW board and post a Statement of Affairs up and ask people there to suggest how you can cut back spending, change how you spend and where you spend and how to boost your income to make this £1,000 a month shortfall up shared between your large family.

Can you rent part out?

neas

How did you get the mortgage if FIL wasnt on mortgage?

usually you have to prove you can repay it. But seriously renting half of it out may be an option to cover 1k...

you;d have a good 6 bedrooms worth or so?

if you all doubled up and put kids in 2 to a room?

Sacrifces have to made, if you dont your lifestyle wont be same if you do you can survive and find a way to improve your circumstances. eventually reclaiming some of rooms even.

GDB2222

Busymumof5 wrote: »

All houses are joined together so has to be sold as one property, thats what makes it so hard to sell and makes the value a lot lower than if they were separate.
As I said before I came here for friendly advice, I feel very misunderstood and feel that I'm having to justify myself all the time. Thank you to all the people who have tried to give helpful friendly advice, but I feel this thread is on a road to nowhere so I'm going to end it now.

I'm sorry that you feel got-at. It's difficult to know what you can do. You're all on the hook for the mortgage, so bankruptcy of the mortgagor isn't going to help you.

Is there absolutely no way to carve individual flats/houses out of this property? I can see that trying to sell the whole place as a single unit is going to be desperately difficult - it must be huge. Without having seen it, splitting it up in some way sounds like your only salvation.

My commiserations, incidentally, not that that will help much. I hope you find a solution.

Captain_Mainwaring_2

Busymumof5 wrote: »

Off the top of my head here are the figures.

We purchased house for £330,000 just over 4 years ago, was an old woolen mill with main house and another already there and the woolen mill itself needing to be converted.
The conversion took just over a year and cost a lot more than expected so we had to take equity to cover the costs, which at the time we were told we had.
We now owe £500,000, house was valued just over a year ago at £650,000 so plenty of equity. With house prices falling and the fact that the house is very different we had 3 valuations done and were told that we would be lucky to get £400,000. All in all the shortfall each month is well over £1000.
The house is huge, and FIL was a big earner as he had his own company and a restaurant, this operation was because of a hospital blunder and has put a huge strain on the whole family, we did all we could to keep both businesses going for as long as we could but in the end it was impossible.
I did not come here looking for hugs and kisses I came here because I have heard such good things about the site, and have reccomended many peolpe for the same reason.

Hold on, you took on something like that with no fall back? no insurance etc?

Don't you think you should sue the health authority?

Is no one else able to take over a bit from FIL, or are you all used to living at his expense?

You owe half a million clicks, with (you say) 150 K notional equity, all based around someone who is unfortunately ill (but can still advise you???) and no one you can take ove a bit??

SingleSue

As some others have suggested, is there no way of juggling child care between you all so that extra income can be made. It was something me and my (now ex) hubby did when we wanted the extra for holidays, new sofa etc so as not to use credit. He worked during the day and then when he came home, we had dinner together and I was out the door for 6pm to go to work, just those 4 nights week of 4 hours brought in nearly £500 a month. This was on top of caring for 3 children, 2 of which are autistic and kept me up most the night, I survived on around 2 or 3 hours sleep a night and rushing around all day.

I am sure with some tightening of the belts and extra work commitment that something could be done to raise the shortfall especially with so many adults in the building.

epz_2

as a understand it a £500K mortgage would likely be say £2300 a month, a lot even divided by 4 but you would likely be paying more than that in rent were you all to split up and not have the advantage of combined utility costs.