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Two mortgages and gone wrong
frenchdreamgone
Posts: 1 Newbie
My wife and I have worked hard all our lives, our main aim always was to retire to france, where my wife’s family live. We had a house in the UK with an interest only mortgage of £300,000 which we were easily able to afford and paid religiously every month.
The house was valued 4 years ago, by several estate agents, at over £500,000, so we decided to take the plunge and buy our retirement property in france. We used our savings to buy the house and took out a french mortgage of 60,000euros to fund the rest. The house cost 100,000euros.
Our plan was to sell the UK property, pay off the french mortgage and have approx £140,000 left to fund the refurbishment of the french property and to save the rest. We would then be mortgage free, and as I’m fast approaching retirement age, I would be able to work less, with just the everyday bills to pay.
We decided that my wife and daughter would move out to france ahead of me, as my wife had developed health problems and was no longer able to work and my daughter was keen to get her small business kicked off in france. I stayed in the UK to organise putting the UK house on the market and continued to work. So we had two mortgages to pay, but this was only to be short term, for a few months, until the UK house was sold. I found a buyer after only 2 months, so our plans were working out nicely.
Then the ‘credit crunch’ happened – the buyer I had got for the UK house pulled out of the sale – then over the following months, the house prices tumbled….and tumbled. With all hope gone of selling the house soon, I moved into my sister’s house and rented the UK house out to help pay the two mortgages, but then the company I was working for went into liquidation and suddenly I had no work. Without work I was unable to pay both mortgages and so we used the rental money to pay the french mortgage and fell into arrears with the UK mortgage. I found some work recently and was able to make a few payments on the UK mortgage, but this work is only a temporary contract and finishes soon and I have not been able to find any other work yet, as my line of work has also been hit badly by the recession.
We just can’t go on like this…..after going through 3 years of absolute living hell, we are left with a UK house now valued at only £220,000, with a mortgage of £300,000 plus £9,000 arrears and a french house worth around 100,000euros, with a mortgage of around 50,000euros….with my family living in france, me in the UK, with no savings or any valuable possessions left.
We prioritised the french mortgage, because that is now the family home, we have never missed a mortgage payment on it and we could afford to continue to pay it, but we have now decided to let the UK house be repossessed as we just can’t pay both any more. What should we do? What will happen to us? – will we lose our french house as well?..........we just can’t take any more - please help
The house was valued 4 years ago, by several estate agents, at over £500,000, so we decided to take the plunge and buy our retirement property in france. We used our savings to buy the house and took out a french mortgage of 60,000euros to fund the rest. The house cost 100,000euros.
Our plan was to sell the UK property, pay off the french mortgage and have approx £140,000 left to fund the refurbishment of the french property and to save the rest. We would then be mortgage free, and as I’m fast approaching retirement age, I would be able to work less, with just the everyday bills to pay.
We decided that my wife and daughter would move out to france ahead of me, as my wife had developed health problems and was no longer able to work and my daughter was keen to get her small business kicked off in france. I stayed in the UK to organise putting the UK house on the market and continued to work. So we had two mortgages to pay, but this was only to be short term, for a few months, until the UK house was sold. I found a buyer after only 2 months, so our plans were working out nicely.
Then the ‘credit crunch’ happened – the buyer I had got for the UK house pulled out of the sale – then over the following months, the house prices tumbled….and tumbled. With all hope gone of selling the house soon, I moved into my sister’s house and rented the UK house out to help pay the two mortgages, but then the company I was working for went into liquidation and suddenly I had no work. Without work I was unable to pay both mortgages and so we used the rental money to pay the french mortgage and fell into arrears with the UK mortgage. I found some work recently and was able to make a few payments on the UK mortgage, but this work is only a temporary contract and finishes soon and I have not been able to find any other work yet, as my line of work has also been hit badly by the recession.
We just can’t go on like this…..after going through 3 years of absolute living hell, we are left with a UK house now valued at only £220,000, with a mortgage of £300,000 plus £9,000 arrears and a french house worth around 100,000euros, with a mortgage of around 50,000euros….with my family living in france, me in the UK, with no savings or any valuable possessions left.
We prioritised the french mortgage, because that is now the family home, we have never missed a mortgage payment on it and we could afford to continue to pay it, but we have now decided to let the UK house be repossessed as we just can’t pay both any more. What should we do? What will happen to us? – will we lose our french house as well?..........we just can’t take any more - please help
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Comments
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Can you continue to pay the mortgage on the French house if you don't have the rental money coming in, and you aren't sure you'll be in work much longer? Sorry if that seems an unhelpful, or even brutal, question, but I suspect this isn't a situation you can resolve without a hard look at all your finances.
You might find that there's more expertise about repossessions on the debt free wannabe and bankruptcy boards. It's obvious from your post that things look very dark to you right now, but you will definitely find a lot of practical help and support there. I hope things work out for you. Good luck.import this0 -
Not sure I understand the maths here. You were expecting to clear £200,000 profit from your UK house sale (giving you £60k to pay off the french mortgage and £140k spending money) so it would have been valued at £500,000+. Has the value really dropped to £220,000?poppy100
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Really sorry to hear about your circumstances, sounds like, unfortunately, you got your timing wrong with the property deals. Still, it's one of those things - you can only ever guess what the future holds when buying and selling property.
I think in your situation, you should try and sell your French house for £100k, as I gather that you have £50k equity in that. You could then use that to clear your arrears in the UK house as well as buy time and keep up with the mortgage. Hopefully long enough until the market picks up. You do not mention whether you are fluent enough in french to secure employment over there, but assuming that you are not, I think that you would have better chances in UK to find something. Jobs are hard to find everywhere at the moment, but even more so if you don't speak the local language.
Wish you all the best.0 -
Where in the UK has a house valued at 500K in 2007 fallen to 220K today?
Other than Northern Ireland, I can't think of anywhere that would really be the case.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Not sure I understand the maths here. You were expecting to clear £200,000 profit from your UK house sale (giving you £60k to pay off the french mortgage and £140k spending money) so it would have been valued at £500,000+. Has the value really dropped to £220,000?
I have to admit I'm a bit dubious with these figures, especially the drop from £500k to £220k. It's a shame if the weirdos from the house price board are leaking into here with their sham stories, created to make some sort of point.0 -
A drop from £500k to £220k ????
Don't believe that, unless some !!!!!! have moved into the field next door or someone built a motorway across the drive.British Ex-pat in British Columbia!0 -
A drop from £500k to £220k ????
Don't believe that, unless some !!!!!! have moved into the field next door or someone built a motorway across the drive.
This property went on the market at £650k in May 2008. Currently £280k STC.
http://www.rightmove.co.uk/property-for-sale/property-10402386.html0 -
There is no talk of pensions or post work income. With a sick wife, a daughter starting a business and a UK property under water it is truly dire. But yes, where is this property which has lost so much value ?0
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SouthCoast wrote: »This property went on the market at £650k in May 2008. Currently £280k STC.
http://www.rightmove.co.uk/property-for-sale/property-10402386.html
It's at £350k here, reduced from £495k on Property Snake which is a 29% drop.
Do you have a link to the higher price?0 -
Try using property bee.RenovationMan wrote: »It's at £350k here, reduced from £495k on Property Snake which is a 29% drop.
Do you have a link to the higher price?
Went on sale in May 2008 for £650k
Dropped April 2009 to £625k
Feb 2010 to £550k
Sep 2010 to £520k
Feb 2011 to £495k
Aug 2011 to £350k (auction guide price)
Oct 2011 to £280k
Now that's what I call chasing the market downpoppy100
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