Writing off mortgage debt?

BazV

Hi

I'm a newbie here so apologies for any errors!

Does anyone know if it is possible to get part of buy to let mortgage written off?

I have a buy to let mortgage with Northern Rock. The property value is now 30k below mortgage, and costs are almost twice the rental income!

Is there any legitimate way to get part of the mortgage written off?

Any (serious) suggestions welcome!

cheers

Thrugelmir

Unfortunately not. Suggest you speak to openly to the NR before the situation deteriorates further.

GMS

You entered into a business transaction with Northern Rock. Now you expect it to be written off as it no longer looks viable?

No way to do this as far as I know, and why exactly do you think the bank should take a loss for your mistake?

ILW

Bankruptsy should do the trick.

GMS

How can bankruptcy be advised with no idea of OP's circumstances? They may have other assets which would be lost.

BazV

Thanks GMS - yes you're right - in the final analysis, it was my decision.

However, I was helped along by a property club and their helpful mortgage advisor who secured a whacking mortgage from a company who should've checked the maths more closely.

Hanky_Panky

BazV wrote: »

Thanks GMS - yes you're right - in the final analysis, it was my decision.

However, I was helped along by a property club and their helpful mortgage advisor who secured a whacking mortgage from a company who should've checked the maths more closely.

Er - no. YOU should have checked the maths more closely.

YOU took a business decision that has subsequently not turned out how YOU expected it to. YOU are now liable for any loss.

Suck it up and move on, hopefully more wise.

Meeper

Helpfully speaking.....

You could re-finance another property and release equity from it to reduce the borrowing on the rental property, etc. If that isn't an option, then you have no recourse. If the situation is dire you could always stop paying the mortgage and have the lender simply repossess the property, but they could still pursue you for the shortfall in some situations, so also not a fabulous idea.

Without knowing everything about your situation it's impossible to see if there are viable alternatives. Speak with a Financial Planner and the CAB who may be able to offer some thoughts, but absolutely speak with the lender who will be much more responsive to open dialogue than head-in-sand burying!

Conrad

Baz, the only debt killer would be bankcruptcy. My youngest Brother did this and walked away from a wall of debt. The court allowed him to keep his car etc as he had children to take care of. Bets thing he ever did but of course each case is individual. Beware talking to 3rd party 'advisers' as they earn NOTHING from bankcruptcy arrangments. They will want you to do something that makes them money which would be a DMP or IVA.

getmore4less

Which property club? Some are getting sued and have a chance of suceeding.

jamesd

If you're unable to pay the mortgage and it is a BTL mortgage, not ordinary residential, then discuss with Northern Rock to see what help they can offer. Unable to pay doesn't mean rent not covering mortgage payment but your total income and savings still not letting you pay.

If you can't pay then selling the property, taking the £30,000 loss and arranging with NR to pay that off over a suitable number of years would be one possibility. You'd need to negotiate this with NR and present a viable repayment plan because lenders are reluctant to do deals like this, which leaves you owing them money and them with no security.

In very rare cases a tiny number of lenders, mostly Irish, are offering deals to some landlords but I doubt that this applies to NR. It's a feature of the Irish situation where valuations on bank books are so much lower than the market value that it makes sense to encourage people to remortgage away from the existing lender so that lender can get more money than they get from the rescue scheme.

If you didn't have a BTL mortgage your options would be more limited because your first step would be confessing to mortgage fraud.