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Mortgage Shortfall 50k Can I offer Full and Final Settlement
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MoneySavingExpert
Chair, Martin Lewis · Editor, Marcus Herbert
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I am in Northern Ireland.
The house cost me 145k and when market crashed dropped to to approx 45k
I put down 25k deposit at the time, but the market has climbed so slow in Northern Ireland.
Even if the house climbs 5% and compond it, the house will still only be worth 80k in 4.5 years.
i have been paying 200 per mth extra for past 10.5 years and will continue to pay 200 per mth extra for the next 4.5 years. Rent is not covering the mortgage so have to pay extra each mth to service mortgage.
House has cost me a fortune and over next 4.5 years going to cost 6k approx and still owe 40k shortfall.
just spent 4k fixing it up after the last tenant left it in a complete mess. new kitchen, doors, bathroom, carpets, paint, workmanship........its a complete disaster from the day i bought it.
At my wits end with it
But that is not looking likely now.
Not sure what to do
Been a good payer on all my debt, never missed a payment except payment on this mortgage once.
Never lived above my means or bought stuff i could not afford.
Bought this house as an investment, but never thought the market would crash.
I will not give you advice but you are putting money into a black hole, it does not sound like you will get this house upto value for when the mortgage term is over.
You need to take advice, but as said before you either keep propping it up for the next 4 plus years in the hope you will meet the loan.
Or you walk away now....
I know what I would do....
I really do not know what to do.
Walk away now but i dont know the consequences and impact on my life or wait another 4.5 years and then feel the pain and be forced to feel the consequences.
Totally agree with this - getting nowhere with them.
Ultimately it sounds as though you're delaying the inevitable - If it was me I would stop paying, let the house get repossessed, meanwhile you'd be saving the missed mortgage payments and you can hopefully use this to negotiate a F&F settlement at that point. It will be a long time before it gets to that point.
The lender would probably be happy to switch to repayment, means they are getting paid back,
For the record I was able to get a new mortgage deal on my own house when I was 40k in negative equity, my bank allowed me t get normal 90% rates
Generally you can, but in this situation it may be throwing good money after bad.
Property value 60k, mortgage 120k
Scenario 1:
Stop paying mortgage. lender eventually (6-12 months) repossesses. Total amount owed 120k + say 6k arrears + repossession charges = 135k. Negotiate with bank and make a full and final settlement of 30% = 40k. total cost 40k.
Scenario 2:
Over pay mortgage, reduce borrowing to say 100k. So you've been paying 2 years of interest plus 20k capital. cost so far 26k.
then either:
2a) repossession - final amount owed 109k. negotiate f&f setttlement at 30% =33k. total cost = 26k+ 33k= 59k.
2b) remortgage or borrow elsewhere on secured loan, keep repaying eventually paying all back on a wing and a prayer that you will be able to repay all on eventual sale. 60k extra capital required + interest on this money cost a lot more, with no guarantees.
no good way out of this.