Mortgage/Debt Advice Needed

S

SusieQ

Guest
Hi there

I am in a bit of a rut and finance is really not my strong point so I would be most grateful for any advice on my situation.

I own a property in Galway that I bought in 2006 - intending to live there.
Mortgage was 100% 250,000 and I am on my own with it. (property now about 60,000 under original value!)
Employment drove me back to Dublin so I had to rent it out.
I am not covering the mortgage at all with the rent & have hefty property management fees. I have been struggling severly with the mortgage for the last year as I became unemployed for a time & ended up having to set up my own business out of desperation. As with any business it takes a time to start making money & I am also expecting a baby in December so money will be even tighter.

I have not missed a mortgage payment but everything else has suffered as a result (am paying huge interest on overdrafts, late iwht credit card payments etc.) & it's too much pressure. Part of me thinks I should try to keep going & wait till the market changes but it's such a struggle & as I looked through my mortgage agreement & am paying interest of approx. 196,000 on top of the loan so I will always be at a loss & even in ten years if things pick up a little I am still paying a serious amount of money for nothing really.

Anyhow I was thinking about approaching the lender (Permanent TSB) & seeing what they can do but even if they reduce the payments to match the rent I am still in the same situation - my tenants could move out and I have no way of covering the payemtn. I really just want rid of it. I won't be back in Galway again to live sadly so it's just never going ot be needed.

I would really appreciate some advice on this - as in how I can get out of this mortgage without damaging my credit rating if that's at all possible or what will the penalties be? I am not fooling myself into thinking I can escape the actual debt - just how to clear it.
BTW my current mortgage is a tracker mortgage.

Thanks in advance

S
 
Hi Susie,

I'm sorry to hear about money problems.

I had a similar problem a few months ago and I contacted my mortgage lender and they gave me interest only payments for 6 months to help me out.

I would speak to your mortgage lender straight away to see if they can your mortgage payments over a longer period of time. also are you earning a wage at the moment? or you still self employed? you maybe eligible for Mortgage Interest Supplement,

If you want to give the house back then also speak to your mortgage lender and see if they can arrange this for you, the only thing is that if they sell it you may not get a great price and you may still owe them money once the house is sold.

I called mabs when i was struggling but they could not see me for 4 weeks so instead i contacted a debt management company and they were great. they gave me a letter to take to my mortgage lender asking for the interest only period and they also dealt with all my other credit cards and loans. All my creditors have accepted a reduced payment now and all the interest and charges are frozen.

I hope this helps you
 
thank your lucky stars your on a tracker mortgage. At least thats one positive!
 
Also, you might want to request from the mortgage provider that they move you to interest only while you try to sell the propoerty yourself, they may agree to give you an unsecured loan ofr the difference between the price its sold for and the loan amount, over a long term and at the mortage rate or a low rate. Explain that eventually you could end up in arrears eg lose tenant, rates increase etc, Lastly the price may fall further and may not go up for a long time or only moderatly, so to sell now may minimise you loss versus a bigger loss if you hold.
 
Be careful Susie. Does your bank know you have it rented out? If not and you inform them they might take you off the tracker and give you an investor rate. Then you'd be in a worse off position. Maybe ask them for an interest only period without mentioning the rent you're getting.
 
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