Am I a fool to be paying my mortgage?

chunkypup

hi everyone - I have a question I hope some of you can help me with. I have a house. bought in 2006. now in negative equity. I recently broke up with my boyfriend. we bought together. he's moved out (all very amicable etc) I am living in the house and paying the mortgage in full. it is a real struggle but doable.

my mum works in the bank and so do some of her friends. she has always encouraged my to pay my bills etc for fear of a bad credit rating. she told me recently that everyone is fecked. the banks are lending to no-one and it doesn't really matter if you have a good or bad credit rating anymore no ones getting anything. she advised me that I should go into the bank and tell them that I can't pay all of the mortgage.

I was just wondering if all of the clever people out there are taking advantage of the fact that the banks have been told not to go after anyone for 12 months. should I be taking advantage of their 12 month approach and of the fact that they don't want my house back anyway? paying half the mortgage back each month is better than nothing.

should I take a 12 month break from my mortgage?? or say I can only pay half?

any suggestions or thoughts would be appreciated

Notorious97

If you can manage to pay them mortgage off each month, im sure it is a real struggle though, but if you can manage it, id personally keep trying to pay it off for my own sake if i was you, for it and when it eventually picks up, you will have kept up the payments and helped put a dent into the mortgage as opposed to having a break from it and delaying the inevitable.

Saying that though the banks are a shower of shi*es so i wouldn’t blame you for wanting to take advantage of this and have some spare cash to save up. If it was me though id pay it for as long as i could.

Edit – also as per below posters questions about ex BF, make sure he coughs up too!

Jaden

If the ex-BF's name is on the Mortgage, sell up, and get him to take half the NE hit. It sounds like he got a sweet deal, walking away without penalty. If his name is on the Mortgage, then he's in for 50%. He should be paying half the Mortgage right now, regardless of the fact that he is not living there.

Do you honestly believe that if we were still in a boom and your house was now worth 50K than you paid for it, that he would be happy to walk away?

heebusjeebus

Did your ex buy out of the mortgage or did he manage to escape this situation scott free?

DeVore

Walk into your bank and tell them you need to reduce your monthly payments. They will be delighted to see you taking it by the reins.

DeV.

Mena

chunkypup wrote: »

she told me recently that everyone is fecked. the banks are lending to no-one and it doesn't really matter if you have a good or bad credit rating anymore no ones getting anything.

For a start that's not true at all.

With regards to the rest of the post, go speak to the bank. Manage the situation before someone else does it for you, on far less favourable terms.

derdider

If you are paying the mortgage in full the first thing i would do is get his name off the mortgage and deeds so he cant come back 2 years down the line and force you to sell and walk away with half after you paying the whole mortage for these years.

Secondly, if you can pay the mortgage id continue to pay it, but if its a real problem talk to the bank about extending the period of the mortgage and so you would have less to pay each month.

I certainly wouldnt walk away. While the banks arent lending now, in 5 years time or whatever you'll be looking for a loan for another house, or a car or whatever and you'll be told where to go !

dvpower

chunkypup wrote: »

hi everyone - I have a question I hope some of you can help me with. I have a house. bought in 2006. now in negative equity. I recently broke up with my boyfriend. we bought together. he's moved out (all very amicable etc) I am living in the house and paying the mortgage in full. it is a real struggle but doable.

my mum works in the bank and so do some of her friends. she has always encouraged my to pay my bills etc for fear of a bad credit rating. she told me recently that everyone is fecked. the banks are lending to no-one and it doesn't really matter if you have a good or bad credit rating anymore no ones getting anything. she advised me that I should go into the bank and tell them that I can't pay all of the mortgage.

I was just wondering if all of the clever people out there are taking advantage of the fact that the banks have been told not to go after anyone for 12 months. should I be taking advantage of their 12 month approach and of the fact that they don't want my house back anyway? paying half the mortgage back each month is better than nothing.

should I take a 12 month break from my mortgage?? or say I can only pay half?

any suggestions or thoughts would be appreciated

If you don't make the repayments, the loan will simply not reduce and you will end up paying more later (with interest). And you'll get a bad credit rating for going into arrears.

Seems like a silly idea to me.

chunkypup

scott free - so far. we have a good relationship. i understand that i will be taking on all of the debt. but my heart rules my head and i want to keep the house and i don't think the battle over money is worth it in the long run.

i wouldn't intend going on holidays, buying clothes with the mortgage money rather paying of credit union loan and visa card.

going to see a solicitor during the week and will ask their advice.

would the back go to my employer and try to take 'money at source'? i had heard they could do this?


thanks for your thoughts !!!

dvpower

chunkypup wrote: »

I recently broke up with my boyfriend. we bought together. he's moved out (all very amicable etc)

You let him walk away leaving you with his share of the negative equity? You're very generous. I'm not surprised it was an amicable parting.

godtabh

chunkypup wrote: »

would the back go to my employer and try to take 'money at source'? i had heard they could do this?

I think they can take money from your account if the bank is one and the same ie home loan is same bank your current account is with

DULLAHAN2

derdider wrote: »

If you are paying the mortgage in full the first thing i would do is get his name off the mortgage and deeds so he cant come back 2 years down the line and force you to sell and walk away with half after you paying the whole mortage for these years.!

If she can prove he didnt contribute anything towards the house for a couple of years he wont be able to do that. It happened to a guy i know where he was engaged and they bought a hous, she left him few months later and he paid the morgage all on his own. She came back looking for him to sell it and because he could prove that she didnt pay anything towards it the court ruled that he could take her name of the mortgage and keep the house

chunkypup

I've already been to that bank to request that his name is taken of the mortgage. they wouldn't agree to it. i don't earn enough and when the stress test my income vs the mortgage repayments 'their computer says no'

i am in the process of trying to draw up a legal agreement until such time that i can afford the mortgage.

JONJO THE MISER

God your ex got off Scott free. Why dont you rent out some of the room's in the house to help you pay the mortgage?

kandsfarrell

chunkypup wrote: »

i am in the process of trying to draw up a legal agreement until such time that i can afford the mortgage.

See a solicitor......Best to be legally advised on this and continue payments until you know where you stand and what you have to do

dan_d

chunkypup wrote: »

I've already been to that bank to request that his name is taken of the mortgage. they wouldn't agree to it. i don't earn enough and when the stress test my income vs the mortgage repayments 'their computer says no'

i am in the process of trying to draw up a legal agreement until such time that i can afford the mortgage.

That....leaves me speechless.

I understand why, but it leaves me speechless.

Based on their "computer saying no"....surely they should be saying to you "do you have a problem, can we work something out with you".

I actually don't even know where to start on all the ways that that is wrong....

Victor

So, you aren't in trouble, but you want a break anyway?

How will such a strategy affect your tax relief?

Nehaxak

Get a loan from the bank on the back of the equity of your house, use that money to emigrate. Put your house into the hands of an agency who will rent it out and take care of it, with enough profit to cover the mortgage costs, their cut and a little extra for you to pay off the loan and keep some savings.
Enjoy your time in Australia/Canada, find love, get married, never come back and never regret it...

sarahlulu

Which would be a lovely idea if the OP had equity in the property.

Zambia

chunkypup wrote: »

hi everyone - I have a question I hope some of you can help me with. I have a house. bought in 2006. now in negative equity. I recently broke up with my boyfriend. we bought together. he's moved out (all very amicable etc) I am living in the house and paying the mortgage in full. it is a real struggle but doable.

my mum works in the bank and so do some of her friends. she has always encouraged my to pay my bills etc for fear of a bad credit rating. she told me recently that everyone is fecked. the banks are lending to no-one and it doesn't really matter if you have a good or bad credit rating anymore no ones getting anything. she advised me that I should go into the bank and tell them that I can't pay all of the mortgage.

I was just wondering if all of the clever people out there are taking advantage of the fact that the banks have been told not to go after anyone for 12 months. should I be taking advantage of their 12 month approach and of the fact that they don't want my house back anyway? paying half the mortgage back each month is better than nothing.

should I take a 12 month break from my mortgage?? or say I can only pay half?

any suggestions or thoughts would be appreciated

My understanding is you have a job that can pay the mortgage but are looking at just some advantage in todays market. That may give you a little extra take home pay at present. I think the advice given here is correct if you approach the bank they may give you a Mortgage holiday for a few months or even some way of increasing the term etc.

I am also with you on letting your ex walk away there is no ill effect of negative equity unless you sell the house.

But you know what to do.

Keep paying your mortgage in some manner, get your ex's name of the Property and it will be worth it in the end.

It you need idea in more detial I would recommend looking in the accomodation and property Forum. There are guys on there that are pretty good at this sort of stuff. Just break down the questions as in
"How do I get my Partners name of my property"
"How do I reduce my Mortgage payments?"

sceptre

As the OP is looking for financial advice, this is much more suited to the Banking & Insurance & Pensions forum. Moving there.

eagle_i

You really need professional advice from legal, financial and tax advisers.

To have your ex removed from the mortgage your income needs to be sufficient to carry the mortgage and pass the stress test. Which from your previous post, the bank has already completed and refused as your income does not meet these criteria. To complicate things you will also need to have the ex’s name removed from the deeds of the property, otherwise the bank will not approve a mortgage on the property in your name, as he still holds an interest in the property. The easiest way for this to happen is if your ex agrees to sign the house over to you, otherwise you are looking at a costly court battle to force the removal of your ex from the deeds of the property.

Now to complicate things further, the tax man will want his pound of flesh. You are looking at stamp duty on the ex’s portion of the house value (negative equity or not, you are effectively buying him out of his portion) and also stamp duty on the mortgage itself, cause you are effective taking out a new mortgage.

Also, roll back to when you purchased the house, did you put up more money for the deposit and/or did you pay more towards the mortgage repayments while you were together (visa versa)? If yes, now you and your ex are looking at a gift tax liability. Essentially by paying more toward the deposit or toward the mortgage repayments you are giving a gift to your ex (visa versa) each and every time you’re making a repayment on his behalf. I’m not sure how active the revenue is in pursuing these taxes, but given the state of the tax returns I think they are looking at every avenue to squeeze blood from a stone..... any stone!

I’m sorry if this is frightening you but these are the consequences of a break-up especially where you are not married. Where a married couple break-up it is a lot simpler as taxes (stamp duty/gift or otherwise) do not become an issue. To be honest you might as well be married when purchasing a house, as you are married in a financial sense, but without the tax exemptions of a married couple.

Archie D Bunker

Just wondering - your ex boyfriend's name is still on the mortgage. Who actually owns the house though? Is the house itself under your name alone now, or still under both you & your boyfriend's name?

It wouldn't be a stretch assuming that if your boyfriend is still considered half owner of the house, you might get a nasty surprise several years down the line, after you pay most of the payments on the house to discover that you only own half of it, and your ex is half owner even though he made no payments...

chunkypup

plenty of scary things to think about there!!! thanks for all the advise. I really do appriciate it. im surprised there isn't a 'mortgages' section to the site. ill post up in the other sections suggested and see if i get anywhere.

thanks again guys!!!