Hi Everyone.

New member to this website and looking advice please.

I purchased a house with a friend as an investment back in 2007, 4 or 5 months before the house market crashed. When market crashed approx 100k was wiped of the value of the house. Took out and interest only mortgage for 15 year term and approx 4.5 years left.

First one or two years rent was covering the mortgage, but since then we have always had a shortfall on mortgage and been paying shortfall ourselves every month of about £200.

We were always hoping that the house would rise to the mortgage value, but that is not the case or will be the case even at the term end date, we will still have a shortfall of 30k/40k. We thought we would keep and pay the mortgage with hope of the rise in value as our way to get out of it. Approx shortfall now is 50k/60k.

I do have my own house, with some equity and have two dependent children and been recently divorced in the last year, (which has been going on 4 years or more) one of my children live full time with me and the other 50% of the time.

I am in full time employment and my mate who i bought house with is self employed and always has money problems and sometimes cannot even afford to put extra money into account to cover shortfall in mortgage.

Am i delaying the inevitable and just kicking the tin down the road, as i do not have the shortfall or will be even close to it?

I was wondering about this full and final settlement that someone has advised me to do.

Speak to the mortgage lender, who does not exist any more as they were a sub prime lender (i think). We have asked owner of debt to give us a better deal, give us a new mortgage or extend the term and all the answers are "No"

We are not in arrears at the minute, but we did miss a few payment 3 years ago, but we are up to date. I do have some credit card debt and a car loan, which i always pay and never miss.

Recently tenants have moved house and house is a complete mess, needs new kitchen, new doors, new bathroom, new everything and it is just putting money into a bottomless pit. Be better burning money as i would at least get heat from it.

Q. Do i approach lender now and look for full and final settlement, or do i have to be in arrears and house repossessed before i do this.

Q. What happens at the end of the mortgage term and i dont have the shortfall?

Like i said earlier, am i just kicking this tin down the road and eventually going to have to for full and final then. Any help or advice would be brilliant. The stress of this house have been worrying more for years.

I have never missed a payment on anything in my life (except this house), always paid for everything and never lived above my means, would only buy what i could afford to buy.

Thanks in advance.

G

Hello Genoff13 and a very warm welcome to the IVA and debt help forum.

I note you say you have a negative equity of £50,000-£60,000. Generally speaking house prices have recovered, some increased in value, when compared to what they were around 2007.

Q. When did you last have the house valued and how many estimates did you get?

Q. What are is the house based?

Q. Is there any key investment planned nearby, such as a major road, train line, new hospital or university etc. Looking to see if this will drive up prices.

Q. Have you thought about remortgaging with a lender with a more attractive interest rate?

Q. What cost are you looking at to do the work to make it suitable to re let?

Q. What sort of rent can you command once the property is up to scratch?

Q. How much of the equity of your habitual home do you own following divorce and what value is this?

Sorry about the questions but need a bit more information before I can help you plan a way forward.

Best wishes,
Mike

Hi Mike

Thanks for the reply.

Q. When did you last have the house valued and how many estimates did you get?

I have been on to estates agents selling the exact same houses in the same estate comparing prices just.

Q. What are is the house based?

House is based in Northern Ireland and i know during the boom, house rose very fast, and suffered the biggest lost and out of the entire UK house crash have recovered the least and slowest.

Q. Is there any key investment planned nearby, such as a major road, train line, new hospital or university etc. Looking to see if this will drive up prices.

Not at the minute. nothing in the pipeline in the area that i am aware off.

Q. Have you thought about remortgaging with a lender with a more attractive interest rate?

I have, but they all say "No" because of the LTV. House worth about 60k and mortgage 120K. To avail of a new mortgage i would need a 25% desposit, plus the short fall, which i dont have.

Q. What cost are you looking at to do the work to make it suitable to re let?

All the work i am estimating about 4k, new kitchen doors and worktop, cooker, hob, bathroom, painting entire house, new carpets everywhere and new floor for kitchen, actually could be more than 4k, but trying to cuts corners and save pennies where i can.

Q. What sort of rent can you command once the property is up to scratch?

From the local estate agents i have been told 450, but 500 if in good order. i am hoping.

Q. How much of the equity of your habitual home do you own following divorce and what value is this?

i guess about 30k but that would be if i sold it or 100% mortgage.

Thanks

G

Hello Genoff13

Thank you for the additional information, most helpful.

It may be possible to come to an arrangement with the mortgage company but to confirm this you will need to speak with one of my colleagues that covers Northern Ireland. You could do this over the telephone of with a face to meet meeting in NI.

If this is of interest to you can please send me a pm with your full name and contact number and I will respond with the full details of my colleague.

Best wishes
Mike

Thanks Mike

Will do it now

G

Hi Mike

I am not able to send a PM.

Get this message

"Compose message

We are sorry, but you are not authorised to use this feature. You may have just registered here and may need to participate more to be able to use this feature."

Can you send me one and i will see if i can reply to it.

Thanks

G

Hello Genoff13

Sorry, my fault, I should have realised that the first two posts have to be approved by admin before you get get access to the private messaging system.

As you have now had two successful post you should be okay to use it.

I will send you a pm for you to respond with.

Best wishes,
Mike