Trying to solve my mortgage problem

angeldimana

OH! Dont even mention the tax.

I'm registered as self employed and work for UK companies.
I'm trying to keep it English as Italian tax documentation is a nightmare.

Plus i have a family friend who is an accountant and sorts it all out for me.

WellKnownSid

angeldimana wrote: »

I'm trying to keep it English as Italian tax documentation is a nightmare.

Plus i have a family friend who is an accountant and sorts it all out for me.

Your family friend is way out of their depth... As for the Italian tax documentation, let me take a wild stab in the dark... it's not all written in Italian is it?

Double taxation doesn't mean you can just pick and choose which European country you'd "like" to pay tax in. You live in Italy, you are liable for tax in Italy - end of. If the authorities ever catch up with you, they aren't going to write you a nice letter with a 100 pound fine like they do in the UK!

Double taxation only applies if you declare it. If you don't declare - then the Italian authorities are within their rights to double your liability and disregard anything you've paid in the UK because you never declared it!

If you started appearing on computer screens in Naples because you defaulted with the Nationwide, then the questions could get rather awkward.

angeldimana

Who are you to tell me that our accountant is well out of his depth? Do you know ALL our circumstances and the nature of my trade and the business that i do???

NO! - well if you would like to comment or advise regarding my original post - MORTGAGE PROBLEM -well do so and dont start commenting on my taxation affairs that you know nothing about.

For your information i am aware of double and cross country taxation and in Italy we use a 'commercialista' to file tax's in italy and with our local commune. Who are well aware of the nature of the returns in the UK.

STICK TO THE ORIGINAL SCRIPT -and dont talk b******s about something that you dont know about.

laurel7172

OP-what do you want, exactly?

Somebody to tell you it's OK to default, and there will be no consequences? You must realise that no one can promise you that.

I'm sorry you're in a difficult situation, but whether or not you "want" to pay your debts isn't really relevant. There isn't an indebted person alive who wouldn't like their debt written off.

Either sort out the house (sale or tenant), or walk away (and put your Italian house/ability to function normally in the UK at risk).

WellKnownSid

angeldimana wrote: »

Who are you to tell me that our accountant is well out of his depth? Do you know ALL our circumstances and the nature of my trade and the business that i do???

NO! - well if you would like to comment or advise regarding my original post - MORTGAGE PROBLEM -well do so and dont start commenting on my taxation affairs that you know nothing about.

For your information i am aware of double and cross country taxation and in Italy we use a 'commercialista' to file tax's in italy and with our local commune. Who are well aware of the nature of the returns in the UK.

STICK TO THE ORIGINAL SCRIPT -and dont talk b******s about something that you dont know about.

I based my comments on the statement you made about "trying to keep it English".

I may know very little, but being an expat myself, having worked across Europe for over 20 years and running three businesses based in the UK and Europe for the last 15 years I know that "keeping it English" would cost me quite a chunk in tax liability.

If you are declaring in Italy, but paying UK tax where the option might have existed to pay some or all in Italy may be reducing your net income. Few (0.0001%) of local commercialistas or UK based accountants will be qualified to provide cross-jurisdiction advice - they will just do what's needed to file your return locally. There are specialist firms out there that do. Renting out in the UK may help or hinder, depending on local (Italian) tax rules.

It is relevant to the original script... because you have two mortgages which you cannot service (90% of your income) - so your net income is critical. In fact based upon that figure you might not be in a position to service either mortgage, let alone both, plus your outgoings may also be subject to exchange rate risk!

angeldimana

laurel7172 wrote: »

OP-what do you want, exactly?

Somebody to tell you it's OK to default, and there will be no consequences? You must realise that no one can promise you that..

NO - If i'd wanted to know that i would have asked clearly.

Ive actually asked two questions -

1. what are the chances of getting Nationwide to have some compromise towards making my remaining two years payments of my 6.58% interest only mortgage more affordable?

2. What (maybe if we had crystal ball) will happen to the mortgage in two years if we bite the bullet and rent it out? - will Nationwide be forced to give us alternate mortgage and if so would what will it likely to be?

globalds

You have had 3 years to deal with this house in the UK.

It sounds like it is becoming more of a millstone round your neck as time goes on.

If it were me I would cut my losses and sell the place at a loss.

It's a tricky thing to see when an asset becomes a liability ...You've been a bit slow but £6,000 or so will be a small price to pay compared to having this thing niggling a way at you.

blueberrypie

angeldimana wrote: »

Ive actually asked two questions -

1. what are the chances of getting Nationwide to have some compromise towards making my remaining two years payments of my 6.58% interest only mortgage more affordable?

You've already answered that yourself:

angeldimana wrote: »

Ive tried negotiating with Nationwide our lender but they will not shift us to a different deal, reduce the mortgage payments or accept a lower settlement on the mortgage to help us with our sale.

You have a legal contract with Nationwide, and there's no good business reason for them to let you off paying what you owe.

angeldimana wrote: »

2. What (maybe if we had crystal ball) will happen to the mortgage in two years if we bite the bullet and rent it out? - will Nationwide be forced to give us alternate mortgage and if so would what will it likely to be?

angeldimana wrote: »

Theres no equity left in the house as we re-mortgaged to help fund our Italian purchase.
Paying both mortgages would account for virtually 90% of my monthly wage.

Nobody can tell what the mortgage market will be like in two years, but it's unlikely that property values will have increased enough to have put you into a position of substantial equity. That leaves you:
- with little or no equity
- not resident in the UK
- without enough income to support your credit commitments (including your two mortgages)

Any one of those on its own would make it difficult, maybe impossible, to remortgage. Two of them or all three together aren't going to leave you with any choice.

You'll go onto whatever follow-on rate is specified in your mortgage contract. That could be higher or lower than your current interest rate, but either way, it will be a variable rate.

In the meantime, if you want to rent it out, you'll need Consent to Let from Nationwide.

You really don't have any painless options available to you - no matter what you do at this point, you are going to have to take a financial hit. Personally, I'd reduce the price and get it sold, and do whatever was necessary to find the funds for the outstanding amount on the mortgage.

angeldimana

If i sold and say accepted a lower offer for say around £117k and still had £6500 ish outstanding.

What would be the period that that was payable?

I have read somewhere the original agreement was over 25 years then the outstanding debt carries on over that period?

What would my monthly payments be likely to be?

blueberrypie

angeldimana wrote: »

If i sold and say accepted a lower offer for say around £117k and still had £6500 ish outstanding.

What would be the period that that was payable?

I have read somewhere the original agreement was over 25 years then the outstanding debt carries on over that period?

No, the outstanding debt would be payable when you sold the property.

When a lender offers a mortgage, they put a charge on the property - this means that when the property is sold, the proceeds must go to the organisation holding the charge first. It's the lender's security.

When the property is sold, the buyer's lender will also want a charge on the property. They will not free up the funds for the purchase until the previous lender's charge is lifted. The previous lender will not lift the charge until it has received the full amount due.

So in the situation you describe, you would have to find the £6500 and give it to your solicitor before the sale could go through.