handing back keys

[northsidedub]

We are currently with a sub prime lender. We have the offer of a house thru a relative.

Would anyone be able to advise what happens if we walk away from the current house? also if you manage to sell your house what do you do with the negative amount outstanding? In negative equity by about 80k.Do you pay this as a seperate loan?

It has been extremely stressful for both of us but the new house offer is divine intervention. Any advice would be great.

 

[jhegarty]

You can't just hand back the keys in Ireland. They will sell the house and come after you for the balance.

 

[so-crates]

Firstly, there is no "handing back keys". The bank have never owned the house. They own the debt, you own the house.
If you sell the house for less than the mortgage (which you would need their permission to do) you still owe the outstanding amount.
If you hand over the keys to the bank and get them to sell it, you still owe the difference, which would likely be greater than if you sold it yourself.

Basically you have to repay the full amount that you owed plus any interest due. The bank is unlikely to allow you to sell the house for so much less than the loan amount as you cannot discharge the amount. It might be possible to get a loan for the difference but I would seriously doubt it for that much (even if the lending climate was not as cautious as it is now that would be a huge amount of unsecured debt). You would have to have the mortgage fully discharged before you would be able to sign the property over to another.

The only viable option that I can see is perhaps of you can consider selling the other, unmortgaged property and using the proceeds from this to reduce your current mortgage. That may not be feasible or palatable though and I am making an assumption that it is mortgage-free (though you do not imply that and I think my reading would be that it is not an inheritance or a gift but rather it would involve you buying it on favourable terms).

If you walk away, your credit history will be compromised and you will not likely get another mortgage until both the existing loan is repaid and your credit history is repaired (5 years after the debts are fully discharged).

 

[moneyhoney]

We are currently with a sub prime lender. We have the offer of a house thru a relative.

Would anyone be able to advise what happens if we walk away from the current house? also if you manage to sell your house what do you do with the negative amount outstanding? In negative equity by about 80k.Do you pay this as a seperate loan?

It has been extremely stressful for both of us but the new house offer is divine intervention. Any advice would be great.

Can you clarify what you mean by 'the offer a house' - will you have to pay rent, a mortgage?

Just I am thinking would it be possible for you to rent out your current house (even if there is a slight shortfall every month & make up the difference?)