Negative equity on an interest only variable rate (due to end soon) plus seperated… help…

Organgrinder

Sarastubb said:

Thanks all, I’ve booked a valuation on the property and then I think I’ll approach the mortgage company with the valuation and see where we go from there.  Ultimately I think it will be handing it back and renting elsewhere, which is technically what I’ve been doing anyway as I’ve gained nothing paying my mortgage all these years 😕. 

In a situation like this I would counsel against any amateur advice however well intended until you've had a professional opinion so that you understand fully the implications of your decision.

You have two years until the mortgage requires paying off. I would use at least some of that time to get advice.

For what it's worth, realistically you've made no money in 18 years despite your previous payments. In effect as you say, you've been renting but also building up a debt. It may be a case of throwing good money after bad. However there may be other financial implications of defaulting as it is not as simple as handing back the keys. If as you say there is negative equity there are things you need to consider.

Equally, for argument sake, you've spent 18 years paying interest on loan that has not decreased in value, yet in effect has due to negative equity. This "rent" may even be higher than a market rent. Maybe the ground rent and share of any upkeep are now so high that the property prices are kept low as people are unwilling to buy the apartments.

There are so many variables. But whatever you decide, my only advice would be to get some professional advice. CAB perhaps. Good luck. I hope it works out for you.

MWT

StepChange & Shelter are another couple of possibilities for advice as well...

ACG

Organgrinder said:

Sarastubb said:

Thanks all, I’ve booked a valuation on the property and then I think I’ll approach the mortgage company with the valuation and see where we go from there.  Ultimately I think it will be handing it back and renting elsewhere, which is technically what I’ve been doing anyway as I’ve gained nothing paying my mortgage all these years 😕. 

In a situation like this I would counsel against any amateur advice however well intended until you've had a professional opinion so that you understand fully the implications of your decision.

You have two years until the mortgage requires paying off. I would use at least some of that time to get advice.

For what it's worth, realistically you've made no money in 18 years despite your previous payments. In effect as you say, you've been renting but also building up a debt. It may be a case of throwing good money after bad. However there may be other financial implications of defaulting as it is not as simple as handing back the keys. If as you say there is negative equity there are things you need to consider.

Equally, for argument sake, you've spent 18 years paying interest on loan that has not decreased in value, yet in effect has due to negative equity. This "rent" may even be higher than a market rent. Maybe the ground rent and share of any upkeep are now so high that the property prices are kept low as people are unwilling to buy the apartments.

There are so many variables. But whatever you decide, my only advice would be to get some professional advice. CAB perhaps. Good luck. I hope it works out for you.

Fully agree with this.
But just to add a different view... If the house is eventually going to get repossessed, there is an argument to rip the plaster off and get it done. The sooner it happens, the sooner your credit report can start to repair.

But there are potentially other options - letting the house out for example and who knows what else. CAB is a good shout.  

Organgrinder

Sorry that should have said "yet in effect has increased due to negative equity".

Hopefully you understood what I was trying to say.