sale for loss

T

Townboy

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I have two buy-to-let properties, Property one was on Interest only for five years, Bank would not extend and insisted on Full amount or sell. We opted to sell with a residual of 60,000 which we thought would be repaid over the remaining term(16yrs) however letter of agreement from Bank put residual on a ten year term. As we had sale agreed we signed and hope now to get the term extended.
They now want us to sell property two which has a main mortgage and two top-ups, the total is 170,000, value approx 143000, the main and one top up are interest only and other top-up on full capital and interest.
Should we agree to this sale?
 
Thanks for reply Brendan,

Income (net) €3000 per month (self) Public servant
Spouse (net) € 2800 pm, private sector

Child benefit €200 pm

Four Children - Three in Third level

Home loan on tracker € 26000 remaining


Investment properties-

Have sold one with residual of 60,000, Ten year term at 5.05per cent this was original rate,however we had 16yrs left on term but Bank put us on Ten years,

Second property- main mortgage and one top up on interest only, other top up €19000 on full payments total mortgages €170000, value maybe €143000.
Bank say no more interest only, insisting on sale, after experience of first sale i am reluctant, would rather keep property as negative equity is slowly being eroded.
Family home sacrosanct.
 
Townboy said:
Home loan on tracker € 26000 remaining
Click to expand...

Family home sacrosanct.
Click to expand...

It may be sacrosanct to you, but why would it be sacrosanct to the lender? If you don't pay your loans, they may well get a judgement mortgage and lodge it against your home.

Which lender is it?
How much is your home worth?

What is the interest rate on the mortgage on the investment property?

You have to decide which is best for you. If you have a cheap tracker, then it's probably best to try to keep the investment property. If you have an SVR, then it's probably losing money and you might be better off selling it.

If you refuse to sell, then the bank will probably not do anything as long as you continue to pay at least the interest. However, they could apply for a repossession order. Or, if the contract allows, they could appoint a receiver without going to court.

You might try to sit down with the bank and agree to sell as long as the shortfall and the other shortfall is put on 20 years.

Brendan
 
What are the repayments on the second property, both currently and when the bank switches all of the loans to capital and interest?
What rental income are you getting?
What are the average additional costs of having this house?

How much will it cost you to hold onto a poor investment in the hope that it will come good eventually versus cutting your losses now and paying off a relatively small debt?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Thanks for replies,
Lender is BOI, my own home is worth €120,000, Interest only payments on second property are covered by the rent which is €800 per month,(151000, on interest only) and 19000 on full repayments at 4.58 percent. I think full repayments would be approx €1600 pm
 
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