Mortgage repayment hike, negative equity, options?

E

Esme

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Hi

I purchased my house for €160K two years ago, due to current market problems, though my house was valued at €190K last year, it has now been revalued at €160K again now. I fixed my repayment for a year when I bought it, and it was €650 a month, now its €800 a month having fixed it for a 2nd year, and I received a letter today that as of 4th October, it will be €930 a month. My wages have not increased at all. I advertised for a lodger but that even seems impossible. I am struggling big time, and am driving a car that will not survive the winter.

Any suggestion to my options, sell up or hand the keys back to Bank, and go back to renting. What will i do with furniture which is worth a fair bit?. Will the bank rent the house back to me? (I had heard this could be an option, I haven't a clue).

Thanks in advance

Esme
 
You could try and sell if possible. You cannot hand the keys to the bank and walk away. A lodger would possibly be the best option as presumably you do not have to charge a huge rent to make up the shortfall
 
Are you actually in negative equity?

If your wages will increase over the next few years and this is only a temporary struggle you could also consider going interest only for a while. I would suggest that if you do this you try to save as much of the capital as possible though in a high interest account. It might give you a breathing space during which you could get that lodger, get a wage increase, supplement your income somehow.
 
What are the terms of your mortgage ? Have you been fixed for for the first two years and this is the fixed term now ? What rate would you get if you weren't fixed. I think you need to tell us what the terms are as you may be paying a large amount to fix.
 
It is like you have the sell the house to some one else cause you see your other options is like a crime and they might have send you in prison , the best thing is advetise your house and sell it as fats as possible.

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Hi Guys

Thanks for replying. Unfortunatley, selling seems to have slowed down. There are 8 houses in my estate for sale, and no takers. Even looking for people to rent houses has gone down. I have advertised for lodger since July, no interest, my friend who lives in same estate has advertised for to rent whole house, no takers.

Anne-Marie
 
As Vanilla mentioned, you should also look at adjusting the terms of your mortgage. Discuss your options with your bank. They do not want people defaulting on a mortgage so if they can reasonably assist you most will.

An interest only option or adjusting the terms of your mortgage are two options that have been mentioned.

Keep dropping the rent on the spare room until you get some interest. Remember, not only are you receiving rent, your are normally splitting the bills and this can be a big help, especially with the winter upon us (did we have a summer??).

There are plenty of things that you can explore before considering anything drastic. Do you have a good history with your lender?
 
Esme said:
Hi Guys

Thanks for replying. Unfortunatley, selling seems to have slowed down. There are 8 houses in my estate for sale, and no takers. Even looking for people to rent houses has gone down. I have advertised for lodger since July, no interest, my friend who lives in same estate has advertised for to rent whole house, no takers.

Anne-Marie
Click to expand...

How much rent are you looking for from the lodger?
 
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