Not the only one in this position but where to now!

N

nothintolose

Registered User
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2
I know I am in a similar situation to many people but don't know where to go from here.

I am in a position where I have a house on the other side of the country that was purchased in 2007 for €250,000 as my ppr but due to work my family and I am now live on the west coast. The house has been rented since I moved out but I have been interest only on the mortgage as the household income has been reduced. From january the interest only period will expire. I am permanent in my job with no option to return to the house. The mortgage will be about €920 per month with a gross rental income of €700. The current market value of the house is about €90,000-€100,000 but even that is probably optamistic so sellining is not an option, mortgage balance about €225k
I also have about €15,000 of debt related to the house as it was fully refurbished when we bought it. Also have a car loan of about €10000. I am struggling at the moment and in january when I have to put money towards the mortgage my house hold income will be down by about €500 per month (interest only is €380, interst and capital will be about €920). All other debts are restructured already

I have been engaging with my banks about all my debts but my problem is I am just treading water. I want to get into a position that I can move on. I am renting a house at the moment and in the current situation I will never be able to buy a family home and settle into my new life with my family.

The situation is starting to have an impact on my wife and myself emotionally and we find ourselves going in circles in arguments. In the last 12 months we put everything we had into trying to clear the debt only for something to come up every few months meaning we needed to use the credit card and so we were back where we started as we were unable to save any money when trying to clear the debt.

Not sure what I am looking for as I am sure there is no quick fix but even any adive will be much appreciated. Also any information on people that may have had to leave ppr for similar reasons and managed to do a deal with banks...
 
What options have the bank offered to you? Will they continue the interest only? By deal, what is it you are hoping for? Would you be better off if you handed it back to them, or sold it and let them chase you for the balance? Are you eligible for any of the debt relief measures in the new insolvency legislation?
 
You should approach the Bank with a proposal that involves a voluntary sale of the house. In terms of the residual debt you will then have to negotiate a settlement that is within your ability to perform over an agreed period. You are likely to need some assistance from MARP or other advisor in dealing with the Bank. However, while you have offered no details of your financial position it would appear that you are not in a position to adequately repay all that is owed. Ultimately you may need to look at some form of insolvency. There is little point in trying to make any inroads into the mortgage debt unless some level of settlement with the bank can be agreed!
 
Two points

1. Interest only €380, full Interest and capital €920. If you were to pay the bank an intermediate amount say €600, you would be paying the interest and reducing the capital outstanding each month. You could set this up by standing order yourself. The bank might not be very happy, but I doubt they would do anything

2. An house on the east coast with rental income of €700 per month should be worth more than €100,000

Maybe your situation is not as bad as you think.

You will need to do the full money make over for more detailed advice.

Good luck
 
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