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Mortgage Default

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  • 14-11-2008 11:48am
    #1
    gabbyc
    Closed Accounts Posts: 2 ✭


    Hope I'm in the right forum for this...
    We are trying to sell our house at the moment but to no avail - we recently re-mortgaged to a value of 550k(the bank valued the property at 650k) but it looks like we may be unable to service repayments. The fact of the matter is, in the current climate, we're not able to sell the property and clear this mortgage. The mortgage is only secured on the property itself.
    What are the implications of defaulting on this mortgage? Will the bank just take the house or can they come after us for more if they cannot recoup their loan?
    I also hear that property developers can do deals with the banks in relation to their debts. Can domestic customers to this also?
    Tagged:


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    #2
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    The last thing that a bank wants to do is take you to court to force a sale of your home.

    It's very difficult to walk away from a debt in this country. Even if the bank do take your house, you may still be liable for the shortfall between the value of the house and the mortgage taken out.

    The first thing to do is to work out whether you actually are in that much trouble and whether you are going to be unable to make repayments. Then work out what you can reasonably afford to pay each month (i.e. without sacrificing your ability to eat and pay bills). Then approach your bank and outline your position. As I say, the last thing they want to do is take you to court. In fact, the last thing they want is your house - your debt is more valuable than your house, so they'll be eager to maintain it as a stable debt.

    There are a number of deals which can be made including increasing the term of your loan or having the bank take possession of part of your property (say 50%), which means that you only need to make repayments on the balance, and you still get to live in your house.

    You do have the option of just giving them the keys and saying "sayonara", but you'll find it difficult to secure any kind of credit for quite a while.


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    #3
    eden_my_ass
    Registered Users Posts: 594 ✭✭✭eden_my_ass


    I'd recommend posting over on www.askaboutmoney.com too on this issue, might get more people in the know than here....no offense intended :D


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    #4
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    None taken :)

    You might want to be prepared for the "told you so-ers" though on AAM :)


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    #5
    gabbyc
    Closed Accounts Posts: 2 ✭gabbyc


    Thanks for the replies. Took your advice and had a look over on askaboutmoney. There was a similar thread ( http://www.askaboutmoney.com/showthread.php?t=92911&highlight=mortgage+default ) that explained quite alot but, in the main, essentially echoed Seamus' advice.
    Sure we'll see how things pan out and have a chat to the bank. First of all, I think we'll do some analysis of our monthly living costs and see what that leaves for repayments. That should give the bank something to work with.

    btw - see what you mean about the "told you so"ers at AAM!


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    #6
    eden_my_ass
    Registered Users Posts: 594 ✭✭✭eden_my_ass


    gabbyc wrote: »
    btw - see what you mean about the "told you so"ers at AAM!

    From the high horsed attitudes you sometimes see on that forum, one must deduce that it is populated with some of Irelands highest educated, most financially minded and no doubt successful individuals...of course on the internet you can always use your hindsight to seem insightful, noone knows what personal mistakes you learned from, and you don't have to tell ;)


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    #7
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    gabbyc wrote: »
    Thanks for the replies. Took your advice and had a look over on askaboutmoney. There was a similar thread ( http://www.askaboutmoney.com/showthread.php?t=92911&highlight=mortgage+default ) that explained quite alot but, in the main, essentially echoed Seamus' advice.
    Sure we'll see how things pan out and have a chat to the bank. First of all, I think we'll do some analysis of our monthly living costs and see what that leaves for repayments. That should give the bank something to work with.

    btw - see what you mean about the "told you so"ers at AAM!

    That is your best approach. The bank are usually much happier to have someone approach them (especially with an attitude like yours :)) rather than have to chase someone.

    I hope it all works out well for you.


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    #8
    ontheedge
    Closed Accounts Posts: 4 ✭ontheedge


    help

    you commented on a thread here relating to a person not being able to pay their home load...do you work in this area?

    Im looking to make contact and pay for advise with somebody working in this area..

    can you help or suggest anybody?

    Thanks


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    #9
    cookie1977
    Registered Users Posts: 6,794 ✭✭✭cookie1977


    I've PM'd you ontheedge


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