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Negative equity and struggling with repayments - help!
duffydeclan
Posts: 10 Forumite
I currently own a property which I rent out. It is a two bed terraced house - I paid £70k for it four years ago and it is worth between £50-55k now. The rent I receive just about covers my mortgage repayments and my landlord's insurance which is fine if nothing ever went wrong but unfortunately it does.
I rent it out through a charity who look after it as I now live hundreds of miles from the property. Last year I had to replace the wooden floors and other bits and pieces that cost approx £1500. I have now been contacted to say that the boiler needs replacing which will cost £1270 plus VAT. This is something I simply cannot afford - my wages just about cover my outgoings. Without this they obviously won't be able to put anyone in my house, and without my rental income I won't be able to pay my mortgage.
Please can anyone let me know what my options are? The ones I can see at the moment are:
1. Payment holiday for a few months to cover the cost. Is this possible? My mortgage is with Northern Rock and I am in negative equity.
2. Sell the property for the going rate. What happens if I sell my property for, say, £55k? That would leave me £15k short. Would this amount continue to be taken per month for the remaining term of the original mortgage? Am I in any way able to come to an agreement with NR to settle for a smaller figure without destroying my credit rating?
3. Bankruptcy. I absolutely hate the thought of it but have to consider it as an option.
4. Government assistance. I am aware of the Warm Front scheme that the government offer. However, as mentioned, I rent my property through a charity who house people who are trying to turn their lives around, e.g homeless, victims of domestic violence, etc. Would I still quality for the Warm Front scheme? It isn't very clear but I think I would have to have a direct tenancy agreement with my tenant to apply.
Any assistance here would be greatly appreciated. I honestly don't know what I am going to do!
I rent it out through a charity who look after it as I now live hundreds of miles from the property. Last year I had to replace the wooden floors and other bits and pieces that cost approx £1500. I have now been contacted to say that the boiler needs replacing which will cost £1270 plus VAT. This is something I simply cannot afford - my wages just about cover my outgoings. Without this they obviously won't be able to put anyone in my house, and without my rental income I won't be able to pay my mortgage.
Please can anyone let me know what my options are? The ones I can see at the moment are:
1. Payment holiday for a few months to cover the cost. Is this possible? My mortgage is with Northern Rock and I am in negative equity.
2. Sell the property for the going rate. What happens if I sell my property for, say, £55k? That would leave me £15k short. Would this amount continue to be taken per month for the remaining term of the original mortgage? Am I in any way able to come to an agreement with NR to settle for a smaller figure without destroying my credit rating?
3. Bankruptcy. I absolutely hate the thought of it but have to consider it as an option.
4. Government assistance. I am aware of the Warm Front scheme that the government offer. However, as mentioned, I rent my property through a charity who house people who are trying to turn their lives around, e.g homeless, victims of domestic violence, etc. Would I still quality for the Warm Front scheme? It isn't very clear but I think I would have to have a direct tenancy agreement with my tenant to apply.
Any assistance here would be greatly appreciated. I honestly don't know what I am going to do!
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