negative equity -seperated, want to sell

Hi , i have done a lot of research on this site regarding my situation and i would appreciate any and all advice.
here is my circumstances;

Income details
Net monthly (i.e. after tax) : 2,200 , full time public servant
Net monthly income partner,spouse: Full time public servant roughly the same amount as far as i know.


Personal circumstances so we can calculate your reasonable living expenses

I need a car for work. neither of us are currently living in the house or really want to. we have it rented out for 650 a month . both of us are renting elsewhere my rent is 700 per month i'm unsure of what her rent is. i contribute 170 per month towards the mortgage, she contributes the same.


Home loan
Lender: Ulster Bank
Amount outstanding: €245k Term: 28 years
Value of home: €190k
Interest rate: tracker 2.68%
Monthly repayment €170 each, current payment is 885 (785 normally)
Amount in arrears €1600
Home Insurance €26 & Life Insurance €56 in total per month.

Summary of discussions and agreements with the bank:

in marp since january , we are currently paying 100 euros per month extra to clear the arrears . but the problem arose through mismanagement of the account, my money goes in on time, hers seems to go in when she has it and she has missed a few payments which has thrown everything out.

account
Credit Union
Amount of shares €2000
Amount of loan outstanding: None
Monthly repayment None
Term left None


Other loans and creditors - delete those which don't apply to you

personal loan: taken out to pay for kitchen
Amount of loan outstanding: 1600
Monthly repayment 280
Term left 7months

Other savings and investments
none

Do you expect any lump sums in the medium term future?
Redundancy, inheritances, injuries awards.
No


How important is retaining the family home to you?


I don't want to keep keeping the family home.


Any other relevant information
we are going for a divorce hopefully this year and the house is the only thing between us . i have recently gotten the house valued and up until we got the valuation , the plan was to sell the house, now she's rowing back on that idea because of the negative equity involved. any and all house repairs and call outs to the tenants fall on me. i have spent 1500 euro already this year out there . we also have a liability to pay to the revenue for renting the property which could amount to over 4k.

What is your preferred realistic outcome?
Sell property and try and do a deal with the short fall . realistically if the house is put up for sale the tenants will have to move out so we will loose that revenue stream . the bank doesnt seem to want to do any deal as we are currently making the payments set out. but this will ll change if and when we decide to sell. i am currently left with very little after all the bills are paid each month and i just want out of this situation.




thanks in advance for your help

Maybe this is a silly question, why don't you move back into the house and take over the mortgage and property in full?

You can probably rent a room to help you with your mortgage repayment.

You have a cheap tracker, so the interest is only €500 per month. The rest is going to slowly repay the capital on the mortgage.

This would separate your finances from your ex and would also free you from all the tenant hassles.

If you can sort out the complex issues of ownership and repair your credit record, then after a couple of years you will be able to move home and get some value from transferring your tracker. ( Not a lot as it's not that cheap in the first place)

Brendan

thanks for the quick reply brendan,

I could move out to the house but its out in the country which would make renting a room quite difficult . its also about 15 miles from where i work , not much, i know but with the traffic in this area it could take about over an hour and a half to get to and from the property each day, on top of that it would cost an extra 60 or 70 euro per week on transportation costs . I dont think my wages would cover the mortgage either . I dont want my ex to get away from her liability either .

OK, you have arrears, so your credit rating is shot anyway.

I think that the only thing which you can do, is to reduce your payments to the actual rent received. €650 per month will cover the interest only and some capital.

So ask UB to reduce the repayments to interest only. If they refuse, you will have to just unilaterally reduce them.

You cannot allow yourself to be completely skint for the longer term.

You could opt for bankruptcy, but I don't think it's worth it. A 20% increase in house prices would eliminate the negative equity for you.

UB will complain about getting just the interest only, but they have far bigger problems to deal with, and are unlikely to take any action for some time.

You should also cancel the mortgage protection policy. As it's now an investment property, you don't need it anymore. If you die, the problem will be your ex's. She will sell the house and pay off the mortgage.

Amount of loan outstanding: 1600
Monthly repayment 280

Click to expand...

I presume your wife is contributing half the repayments on this? If not, then use your credit union shares to pay off the loan early. Make sure that there is no early repayment penalty.

Thats what i wanted to hear brendan. My plan was to offer them a reduced amount or get a moratorium until the house was sold.

I found ulster bank to be impossible to deal with , i filled out a sfs with them before and they would do nothing for me because i had 20 euros per month left .

the current account from which the mortgage is taken is an ulster bank current account. My plan is to close the account, cancel the direct debit and offer them 100 euros per month as my payment . I would like to be rid of the house in the long term.

Should i ring them up and give them the offer or should i have everything in writing ? i was going to send them out a letter each month updating my situation as they seem nice enough to send me one out each month.

As you stated my credit rating is shot at the moment so they dont have that stick to beat me with . the only thing they can threaten me with is repossession and coming after me for the shortfall which is ultimately what i want, although not in a fire sale sort of way.

In answer to your last question , no she isnt contributing to the loan and never did.


Thanks again for you help and advice. i really do appreciate it