Negative Equity, not living in house, how to approach bank

If your relatives are in agreement to sell you the house with stage payments, I think it would be a very good option for you in the long run.
In the short run, I would park the idea of buying the house until the issue of the 1st house has been resolved. If the bank becomes aware of your intention to buy the 2nd house, its likely that they would want to transfer your existing mortgage on to it. That would make things very complicated to resolve now

Under the new insolvency legislation, a person's home is protected in so far as it is reasonable to do so and for that reason I would say that there is very little that the bank can do in relation to the 2nd property if it is now your home.

Of course the fact that you own 1/3 of the 2nd property at a time that you are asking the bank to write off a large part of the negative equity on the 1st house is a hurdle to get over but I think its something that can be negotiated. That is why I earlier suggested accumulating a small lump sum that could be used for negotiating with the bank if that's possible.

I think you need to take this one step at a time. The 1st step is to get rid of a house that you're not living in, that you don't want and that you can't afford. When the bank tells you that they will extend the mortgage term blah blah blah. That is
probably the best outcome for the bank. Its a terrible outcome for you. You want to sell the house. You dont want to live there and I dont think you want to be a landlord. The house must go. Be strong. Be firm. Do whats good for you

Thank you so much for your replies. I will keep you updated, more than likely i will have many more questions.

Importer, just wondering if i should seek legal advice on this as i haven't a clue where to start.

Sadee

Sadee13, Importers advice amounts to strategic default. I would not be a supporter of such an approach from either a moral or a financial standpoint but if you do decide that your emotions are going to overrule logic then absolutely seek legal advice first.

I would urge you to reconsider your distaste for the property you purchased, sell your share in the inherited property and make new memories with your own child and husband in the property you own.

@So-crates
I think you have to understand one thing. The financial market that we are operating in is governed by the law and not by morals. In this particular case, it's the bank who is operating "strategically".Their strategy is to maximise their own position by refusing to cooperate with the OPs house sale. There is nothing moral about what the bank is doing and there is no requirement for the OP to act "morally" in return to the detriment of herself and her family who are in a difficult position.

It is the OPs right to sell her house if she wishes to do so. The bank is preventing this so it is perfectly legitimate for the OP to suspend all payments which will force the sale ultimately

This is not church, Its not a community "love In" Its hardcore business with winners and losers and this is true whether you like it or not. Within the framework the OP must square up to the bank and act in her own best interests within the framework of the law.

The bank lent money to the OP (and thousands of others) , they took a risk and the risk turned sour. The bank needs to "pay out" on the risk and if they had any concern about morals they would be cooperating with the OP not impeding her at every turn.

Don't ask the OP to fight this battle with one hand tied behind her back. Advising her to move back into a house that she doesn't want and strengthening cooperation with a bank that is not cooperating with her would be folly in the extreme

@Dr. Debt, I understand the difference between morals and the law. Where I disagree with you is casting the bank's refusal as a negative thing and the OPs wishes as being a sound guide to her best interests. Essentially the OP is being unreasonable in putting a childhood attachment as an over-riding consideration. The "strategy" the bank is employing takes better cognisance of the long term and wider consequences of resolving the financial situation. The strategy recommended for the OP to default to try and get their own way irrespective of what they agreed, can afford or could accommodate. In other words without some strong and substantial justification that the property is unliveable it is a strategy which reeks of short-term considerations weighting the decisions.