Mortgage debt and relocating job

[grandyea]

Hi - looking for some advice on the following please:

Fell into mortgage arrears due to separation and now stand somewhere around 38k in arrears on a 320k mortgage. Currently making repayments of €1100 (reduced by arrangement from 1850).

Relocating with husband's job (we are now partly reconciled). My questions are as follows:

1. Can put house on the market - but will be selling in N. equity - would bank accept 270k sale on 320k mortgage? (realise that they can go for judgment up to 6 years etc after sale closes).

2. House has some structural problems (leaks etc) - and very poor insulation - resulting in v high fuel bills. Quote of 10k to put it all right - would I be better doing the work or leaving it and reflecting that in sale price?

3. Won't be making any mortgage repayments after relocating as will have to rent there - Am I better off letting bank repossess the house or renting it out (while still up for sale) and paying that rent against mortgage?
Move will be permanent - but don't want to hand keys back without a lot of thought.

4. If worst case happens and bank either repossess (or accept N/Equity sale) and lump sum outstanding and issue a judgement - could they forcibly take money from a possible future inheritance? (I would be ok with this - but not sure if I will be included in the will) Would be willing to make small monthly payments from abroad to continue to reduce this figure - but read on other thread, that this just gives bank more time to issue judgement.

5. Bank knows where husband works - and will still be working for the same company in an non EU country. Can they contact his work to track him down?

Sorry know its a jumble of questions - but need some wisdom on this please. Not happy sloping off - but feel the hole now is too big to plug.

 

[Bronte]

1. You can put the house on the market, but the bank may not give you permission to sell, and you need their permission. So you should ask them.

2. I wouldn't spend the 10K. Let it be reflected in the sale price. Are you sure about the sale price? What are you basing it on.

3. Tricky question, I would always advise a sale in agreement with the bank, rather than the bank repossessing. But you are going abroad to a non EU country. Very hard to rent under those circumstances, so I think a sale now with the banks agreement would be best, that will cut down on costs, make it easier to sell, and the shortfall will not increase.

4. No the bank cannot take money from a 'possible' inheritence. You have to actually inherit before they can go after any money. Might be an idea to tell the testator to will it to your children instead, if you have children. This question is in relation to the worst case scenario.

Is the NE 50K plus the arrears of 38K making 88K. That's a sizeable amount, and think like the bank, will they pursue you or your husband. I'd say if you were somewhere like Dubai, no, UK yes. It depends.

You need to be having this discussion with your bank, and suss out what it is they are willing to take. In return for an orderly sale, they may write off the debt.

Have you thought of going bankrupt? Or one of the insolvency options.

5. So far they have not pursued your husband, and they have come to arrangments with you it appears. What did they say about pursuing your husband.

 

[grandyea]

Sorry Bronte for delay - Re the 'possible' inheritance - what I meant was I don't know whether I will be included in the will or not due to family circumstances. I know that I would actually have to inherit before they could come to recoup. (happy to pay the shortfall if possible so wouldn't approach the testator to will my share to my children)

My husband has been paying the interest only on the mortgage by agreement and yes they deal with him and not me (even though it's in joint names - He has the bulk of the income so they leave me alone).
I have done my research on the property market in the area - plenty of properties similar in the area (5 miles outside a country town) for 285-325k.

N/E of 50k would be based on worst acceptable price V outstanding mortgage so mightn't end up being that large. As you know arrears are only on paper - so would still just owe them outstanding mortgage of 320k roughly.
Bankrupt/Insolvency not an option due to profession and is something that we would both choose to avoid.

 

[Bronte]

Bankrupt/Insolvency not an option due to profession and is something that we would both choose to avoid.

Then I suggest you sell with banks agreement and come to an arrangment with the bank that allows you to repay the NE/shortfall on a monthly basis as if it were the current mortgage, with maybe a shortened term, and at the same interest rate. You might have to negotiate hard for this.

What you need to do is decide how much can you confortably afford monthly, and get the bank to this line. You may have to be tough with them, so negotiation is very important. You do not come outright and say I can afford X, make it less to work up to what you can afford etc. Be strong and don't be pushed into a corner, not easy, but doable.