Intrest only mortgage shortfall, Help please

DTM1985

Yeah I'd give my right arm to be renting now instead of been in the current mess.

What do you mean in your last parragraph ?

hcb42

I echo what many have said about looking at the debt etc and do the statement of expenditures.

One thing to think about is property "generally" performs well over the longer term. I remember vividly the crash in the early 1990s when people thought they were ruined, within five-seven years we were all creaming it in, and where some of these daft mortgages and buying schemes came about.

If you can pay the mortgage, overpay a little bit where you can, get a lodger if you can to help with the bills, and can sit tight, then the picture "might" look a bit different in another five years. Of course I am no expert and this might not happen. But you have still had a roof over your head, your own space, and even in a flat market your salary will hopefully have increased, and overpaying will have started to close the gap in equity.

Don't go bankrupt if you dont need to, that will linger longer than this negative equity will.

(and we have all made mistakes when finding our way on the property ladder, dont beat yourself up over it, the value doesnt really matter for now)

Burridge60

DTM1985 wrote: »

What do you mean in your last paragraph ?

I am not an expert but have seen some people have an IVA put in place which they were never likely to make and ended up as a bankrupt after several months and in one case a year of trying to pull it together.

Financially it might have been right but their health and mental state was affected and their Bankruptcy was bigger than it was had it happened upfront.

MSE has advice about the two sources of free debt advice and you have spoken to one of them (CAB).

sevepally

I do have a lodger at the moment but he is leaving soon.

getmore4less

It might be worth another legal look.

Developer, broker connection is suspect, perhaps there is a connection with the valuer as well.

The lender might be interested if one route is you going bankrupt and them having a significant shortfall.

Do you have legal cover with your house insurnce that might help.

No idea if there is any mileage here but if you can get the 25% deveoper back that would help in thelong term if you kept the place.


Don't pay for debt advice.

I think you have two routes to investigate.

If you sell the shortfall looks like it wil be too big so that looks like bankruptsy.

If you can manage to restructure all your other debts and pay them of and it looks like you can afford to kep the mortgage then ride it out.

Whats the deal on the 25%, do rent or payments kick in at any point?

If you really don't want to live there or might need to move(eg job change) then it might be better to cut lossses now.


Lots to think about, but take your time.

DTM1985

Thanks more 4 less

I need to look in to the details of the 25%

I know several of the other properties in the development have been sold for significant losses, I don't know what people have done after this as don't no any of them personnally. I've herd rumours that the developers have had legal action against them but not herd anything concrete, does anyone know if there would be a public record of court cases that you can view ??

The developer did offer to sell the 25% for 5 k a couple of years ago, did sound like a good deal but I couldn't raise the money. But this suggests to me they were trying to 'wash their hands' of the development. Any resales etc are now controlled by a management company. Don't know if the developer sold all their stakes to this company.

I find all the legal stuff uneasy to understand.

So yeah defiantly lots to think about, don't want to rush in to anything as I don't want to make my 2nd cattetstrophically wrong decision in life

Had a message of the CAB today, they said they canno longer give debt advice as their funding has been pulled

Thrugelmir

helencbradshaw wrote: »

One thing to think about is property "generally" performs well over the longer term. I remember vividly the crash in the early 1990s when people thought they were ruined, within five-seven years we were all creaming it in, and where some of these daft mortgages and buying schemes came about.

I recall buying a property for £88k. At its peak it was worth around £125k. When I eventuall sold it , the value was £88.5k. This all happened in a 5 year time window.

Through it all though, it was my home. Never an investment.

myhouse_2

A bad investment. I've had a few myself with shares. Yes, it's worse when you are paying for an asset for years after (I suppose in a way I am too) but the money you're talking about is not a lot over 20 years of earning. Plus you have a place to stay and lodger income which you wouldn't have if you were renting. With inflation as it is, it'll likely be worth what you paid in 5-10 years.
The important thing is to get off interest-only as soon as your other debts are cleared. Otherwise you're just renting from the bank.

ninjapoundit5

Ditch the slavebox and go BR. F*** me, IO mortgage at 20 for 75% of a flat for £100K, bankers are !!!!!!.

Get your life back, your only 25 !!!!!!

Burridge60

DTM1985 wrote: »

Had a message of the CAB today, they said they canno longer give debt advice as their funding has been pulled

Sad day then means the Government have now put it out to private bodies which means charges and sales!