by Genoff13 » October 12th, 2017, 8:48 pm
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