Voluntary repossesion on our shared ownership house please help!

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The lender won't go after you, they'll go after the Housing Trust due to the Mortgagee Protection Clause in your lease.

shegar

Jowo wrote: »

It's an option, however unpalatable to some, that the OP investigates a debt strategy that will leave him able to walk away from his financial obligations. The recommendation to stay away from paying for debt advice is a sound one.

But he needs to weigh up all his options.

He needs to consider the limited security of tenure in the private sector, the downsides of never having more than 6 months length of tenure, the problems of encountering a landlord that won't meet their repair obligations, possibly not being permitted to decorate the place to their own taste.

I've known people from a previous bubble (in the late 80s I think)who couldn't keep on top of their repayments, handed back the keys and got a council flat, saying its the best thing they'd ever done and how relieved they were.

Yes I also know someone in the family that was in neg eq in 1988. Trying really hard to pay mortgage payments , and hours at work being cut, he tried to talk with his "very well known lenders"..........and they didnt seem to offer him much help, only that they wanted their payments, to cut a very long story short he handed the keys back, and after quite a few months he offered them A full and final settlement of a very very small amount of money which they accepted !!!!!, ..........

He paid it and said it was the best decision he had ever made , because the stress of trying to pay the mortgage was getting to his health cos of the worry........he got rented accomodation and to this day have no regrets whatsoever to handing the keys back...............

ViolaLass

Thing is, the OP thinks he will save £350 by moving (leaving aside any costs involved in getting rid of the house and moving and assuming that he gets the rental place he has had his eye on).

OK, that's a good figure but worth losing a house over and having the insecurity of renting?

£1150 really ought to be a doddle for two people each month.

Nikel

He already rents 75% of the property, in fact with an IO deal he's also effectively renting the other 25% as well. Not sure how secure that is.

bigheadxx

What you might want to consider is buying the property outright at its current valuation which is allowed in all Homebuy schemes. If the property os now worth £150,000 you could purchase the remaining 75% of the property. An interest only mortgage for £150,000 at 5% over 25 years, interest only would cost around £625.

HappyMJ

Why MUST NOT the OP consider giving back the keys? If a place had emotional value then, ok, maybe. But if this house is causing stress, loss of sleep and the OP is considering his exit strategy, why MUST HE NOT give the keys back. You may just be trying to be sympathetic, but please do not dismiss alternative pragmatic solutions.

Because it is a poor choice. Choosing other options will always be better than destroying your own credit rating and possibly declaring bankruptcy over a relatively small amount. Remember it's only 25% of £186,000 so a mortgage of £46,500. Reduced payments can be made. It's a matter of negotiation. Even just simply paying a portion of what is due to the lender and the LA will delay any repossesion proceedings for many many months possibly a year or more. Even if the OP paid nothing and saved the money instead it could still take a long time to be repossesed during which time they will have lived for free..

The OP has an income of £2,000 per month and most likely will still have to pay back any shortfall to the lender so reducing losses as much as possible is in the OP's best interest.

housepricecrash.co.ukFAN wrote: »

Mortgages for those in negative equity - where? Further house price falls on horizon. Interest rate rises likely. I can't see how the above would work for the OP.

Unsecured loans are available to make up the shortfall. However, the OP is unlikely to be approved for a further mortgage of £150,000 on income of £32,000 based on income multiples.

It is your opinion that house prices will fall but that is irrelevant if you are actually living in the house. My house has a value but it's value doesn't matter as I live in it. If it drops by 50% nothing happens. I still have a mortgage that I agreed to pay when I took it out. If it increases by 50% then nothing happens. The mortgage payment stays the same. All house prices increase or decrease at the same time so if I moved I'd be selling something worth pretty much the same as I was moving to.

As for interest rates. I don't think anyone assumes they are staying at 0.5% forever we all know they will go up again and the banks have been calculating that when lending. I do believe the interest rates dropped after the house prices dropped and lending was tightened. So OP bought 2.5 years ago at a much higher interest rate than today since then the rates have dropped. They'll only return to where they were before and the OP will be back on the same rate as when they took this mortgage out..

SingleSue

Losing our house was one of the worst possible things to happen to us (bought in 1990 when our area hadn't had the falls other areas had already had), it has shaped my life and pretty much blighted it ever since.

We tried so hard to hold on, so hard that I became ill with kidney failure, a major depressive illness and pneumonia but I still wish we had managed to hold on because of the adverse impact it had on our lives for 10 years or more.

So please please think hard before you do it, it is not the easy route some assume (we didn't go bankrupt and were chased for over 30k of negative equity plus charges causing untold stress)...it's the hidden mental impact rather than the financial one which is worse.

bigheadxx

housepricecrash.co.ukFAN wrote: »

Mortgages for those in negative equity - where? Further house price falls on horizon. Interest rate rises likely. I can't see how the above would work for the OP.

It may not be the easy option but it is an option. House price falls would enable the OP to increase his stake in the property at a lower cost, if the agreement allows.

dancingfairy

SingleSue wrote: »

Losing our house was one of the worst possible things to happen to us (bought in 1990 when our area hadn't had the falls other areas had already had), it has shaped my life and pretty much blighted it ever since.

QUOTE]

What is best for everyone depends on their individual circumstances - clearly in the above posters case they regret losing their house the way they did , but for some people the chance of a fresh start- perhaps bankruptcy provides some relief from the stress of trying to hang on. The original poster really needs to take some independent advice and go through all the options and decide what is best for them in the circumstances.
I wish them the best of luck.
df

Richard_Webster

The lender won't go after you, they'll go after the Housing Trust due to the Mortgagee Protection Clause in your lease.

No, the Housing Trust will lose out because of this clause and it will go after you!.