I can't afford to pay my mortgage

superbad50

I am in a awful predicament. I lost my job last year and unsuccessful in finding work. I returned to college as it was in my best interest financially plus I was interested in the course.

I have been looking for work tirelessly. The problem is, even if I find employment, finish college par-time, I still cannot afford to cover my mortgage. If I rent out the place the rental income I receive wont meet the mortgage repayments.

what do you do? As you can imagine I am under a great deal of stress and finding it difficult to concentrate on my studies. To add, I also work par-time.

If I asked the banks to extend my mortgage from 21 years to 40 years I could just about cover the repayments. This is not the banks policy but I honestly cant seem any other way other than hand the keys back.

Obviously I was on a good salary when I first took out the mortgage. I can't help but feel some companies are exploiting people looking for work, offering minimum wage due to the large numbers seeking work. I understand the whole economic and reducing costs side of things but it's not helping my situation

Any advice?

wush06

Well if you can rent it you will just have to make up the difference. Move back home and see were you are in say 3 years.

El Weirdo

Are you on the Back to Education Allowance scheme? If you are you may be eligible for Mortgage Interest Supplement.

Also, trying to come to an arrangement with your mortgage provider is a good idea. They're well used to people in your situation these days.

harrythehat

Renting the house, if you can, is a good idea. Even if you just let one room it might lighten the burden a bit?

Otherwise, as has been said, talking to your lender is advisable. I know you already have but I would imagine they would rather come to an agreement with you than have just another house on their books.

superbad50

wush06 wrote: »

Well if you can rent it you will just have to make up the difference. Move back home and see were you are in say 3 years.

Well if i rent it out i will have to fund the rent on where i will be moving to . moving home is not a viable option for me. I would be moving from my 2 bedroom to a 1 bedroom . I wont be in a position to offer the banks much more as i have other financial commitments

it's a tricky sticky one

El Weirdo

superbad50 wrote: »

Well if i rent it out i will have to fund the rent on where i will be moving to . moving home is not a viable option for me. I would be moving from my 2 bedroom to a 1 bedroom . I wont be in a position to offer the banks much more as i have other financial commitments

it's a tricky sticky one

Why not continue to live there and rent the other room?

superbad50

El Weirdo wrote: »

Are you on the Back to Education Allowance scheme? If you are you may be eligible for Mortgage Interest Supplement.

Also, trying to come to an arrangement with your mortgage provider is a good idea. They're well used to people in your situation these days.

yes i do receive a contribution from the HSE on the mortgage interest supplement , a part supplement because i am working also . this is of great help but even at that i still fall short.

other loans etc have me in a tight spot until next year . and yes i am on the BTEA.

TNX for response . i will speak to the banks on this

superbad50

El Weirdo wrote: »

Why not continue to live there and rent the other room?

hi ,

by renting out the room i lose my mortgage interest of my mortgage interst supplement contribution , so just say if i were renting a room for 300 per month i would lose 400 per month , so i would be in a deficit of 100 euro. doesnt make sense i know but that's the way the system is. i would be further in arrear's

El Weirdo

superbad50 wrote: »

yes i do receive a contribution from the HSE on the mortgage interest supplement , a part supplement because i am working also . this is of great help but even at that i still fall short.

other loans etc have me in a tight spot until next year . and yes i am on the BTEA.

TNX for response . i will speak to the banks on this

Like I said, you'll probably find the bank to be more accommodating than you think.

Good luck.

Edit:

superbad50 wrote: »

hi ,

by renting out the room i lose my mortgage interest of my mortgage interst supplement contribution , so just say if i were renting a room for 300 per month i would lose 400 per month , so i would be in a deficit of 100 euro. doesnt make sense i know but that's the way the system is. i would be further in arrear's

Yeah. Didn't think of this.

wush06

Well there is more professional help out there then mine. Just view all your options. Best of luck

superbad50

harrythehat wrote: »

Renting the house, if you can, is a good idea. Even if you just let one room it might lighten the burden a bit?

Otherwise, as has been said, talking to your lender is advisable. I know you already have but I would imagine they would rather come to an agreement with you than have just another house on their books.

o
yes i think all i can do know is talk to the banks . as i mentioned in an earlier post renting a room is not an option

thank you for your reply

Slydice

Have a read about how bankruptcy works:
http://www.citizensinformation.ie/en/money_and_tax/personal_finance/debt/what_is_bankruptcy.html

From my reading of it, it is designed to be painful for the person who goes into bankruptcy.

See if you'd feel comfortable going there. I think it'd be 12 years of bankrupcy pain versus the pain that you think you'll go through if you stay in your current position.

If you are, then maybe head into your bank and tell them that. Maybe ask for debt forgiveness on some of your mortgage and tell them what you would be comfortable paying.

Maybe... just maybe they might work out a deal for you because it might be worse for them if you went into bankruptcy.

Of course, I haven't a clue about legal issues so I recommend seeking legal advice before doing any of it.

Duke Leonal Felmet

Talk to the bank about it. I work for one, and the last thing my bank wants is to repo a house, for then we are stuck with a property and have to pay all sorts of legal fees, etc. So it's better to keep the customer in the house, even if they pay interest only. It's a business view of things, so it may seem cold, but it does show how banks think, and it should give you an idea of how flexible they should be willing to be.

Villa05

Duke Leonal Felmet wrote: »

Talk to the bank about it. I work for one, and the last thing my bank wants is to repo a house, for then we are stuck with a property and have to pay all sorts of legal fees, etc. So it's better to keep the customer in the house, even if they pay interest only. It's a business view of things, so it may seem cold, but it does show how banks think, and it should give you an idea of how flexible they should be willing to be.

I wish people would stop doing whats in the interests of the bank and consider what is in their own interest.

If the situation is unsustainable and causing you stress, consider going interest only until bankruptcy law is reformed. If you are in serious negative equity take the bankruptcy option and rebuild your life with a clean slate and additional qualifications.

Clean Slate better than - €X00,000 of negative equity

daltonmd

superbad50 wrote: »

I am in a awful predicament . I lost my job last year and unsuccessful in finding work. I returned to college as it was in my best interest financially plus I was interested in the course.

I have been looking for work tirelessly . The problem is , even if I find employment , finish college par-time , I still cannot afford to cover my mortgage.
If i rent out the place the rental income i receive wont meet the mortgage repayments.

what do you do. as you can imagine i am under a great deal of stress and finding it difficult to concentrate on my studies. To add , i also work par-time.

If I asked the banks to extend my mortgage from 21 years to 40 years i could just about cover the repayments. this is not the banks policy but i honestly cant seem any other way other than hand the keys back.

Obviously i was on a good salary when i first took out the mortgage . I can't help but feel some companies are exploiting people looking for work , offering minimum wage due to the large numbers seeking work . I understand the whole economic and reducing costs side of things but it's not helping my situation

any advice

Listen. The first thing you need to do is take a breath. You are not alone in this situation and seem to be trying every conceivable way to pay your way and should be commended for doing so.
You need to contact http://www.mabs.ie/. They will tell you to sit down and do a plan for the bank, write down your incoming and outgoing costs and other bills. Inform the bank that you are retraining and hope to secure new employment out of this.
Ask them for IO or ask them for a payment holiday. Put to them what you can "afford" to pay and make it clear to them that you have no other option.
Keep copies of all correspondence, but when you have http://www.mabs.ie/ advising you, you should be fine.
Look at the big developers. Are they losing sleep? The banks cannot get blood from a stone and as long as you are in contact with them and willing to work with them then this will act in your favour in the long run.
I'm also including this link below. I know from personal experience (friends) that this can be an awful time and emotionally traumatic. It is no shame looking to speak to someone who can offer you some support, even if it is just a listening ear.
Don't let this drag you down, it isn't worth it in the long run.

http://www.samaritans.org/?gclid=CJSE2K2R-asCFYVP4QodzAErkw


best of luck

daltonmd

Zulu

Villa05 wrote: »

If you are in serious negative equity take the bankruptcy option and rebuild your life with a clean slate and additional qualifications.
Clean Slate better than - €X00,000 of negative equity

Negative equity does not exist unless you are trying to sell.

daltonmd

Zulu wrote: »

Negative equity does not exist unless you are trying to sell.

As long as you can meet your monthly repayments then this is somewhat true, it limits your options however if you wish to sell, change employment or trade up.

However, in this case it clearly exists because this poster cannot pay his mortgage and cannot sell and clear the outstanding loan.




daltonmd

Snakeblood

daltonmd wrote: »

Listen. The first thing you need to do is take a breath. You are not alone in this situation and seem to be trying every conceivable way to pay your way and should be commended for doing so.
You need to contact http://www.mabs.ie/. They will tell you to sit down and do a plan for the bank, write down your incoming and outgoing costs and other bills. Inform the bank that you are retraining and hope to secure new employment out of this.
Ask them for IO or ask them for a payment holiday. Put to them what you can "afford" to pay and make it clear to them that you have no other option.
Keep copies of all correspondence, but when you have http://www.mabs.ie/ advising you, you should be fine.
Look at the big developers. Are they losing sleep? The banks cannot get blood from a stone and as long as you are in contact with them and willing to work with them then this will act in your favour in the long run.
I'm also including this link below. I know from personal experience (friends) that this can be an awful time and emotionally traumatic. It is no shame looking to speak to someone who can offer you some support, even if it is just a listening ear.
Don't let this drag you down, it isn't worth it in the long run.

http://www.samaritans.org/?gclid=CJSE2K2R-asCFYVP4QodzAErkw


best of luck

daltonmd

Listen to this guy.

Zulu

He's said nothing about wanting to sell.

daltonmd

Zulu wrote: »

He's said nothing about wanting to sell.

Neither did Villa05. I think it's safe to assume from the OP where he says that selling is not a viable option that it is the case that he cannot sell up due to lack of demand or negative equity, or both? I am sure if he could sell up and repay the outstanding loan then he would do so.



If your accommodation meets your needs, are in secure employment and you can service your mortgage then NE is notional.
For many who have lost their jobs it is a real existing problem.

superbad50

Villa05 wrote: »

I wish people would stop doing whats in the interests of the bank and consider what is in their own interest.

If the situation is unsustainable and causing you stress, consider going interest only until bankruptcy law is reformed. If you are in serious negative equity take the bankruptcy option and rebuild your life with a clean slate and additional qualifications.

Clean Slate better than - €X00,000 of negative equity

hi ,

yes it genuinely does seem like the best option for me at the moment. I am just sick of the stress and worry , so much that i wouldn't care where i lived or what happened to my house. the whole recession / economic downturn has left a sore taste in my mouth

superbad50

daltonmd wrote: »

Neither did Villa05. I think it's safe to assume from the OP where he says that selling is not a viable option that it is the case that he cannot sell up due to lack of demand or negative equity, or both? I am sure if he could sell up and repay the outstanding loan then he would do so.



If your accommodation meets your needs, are in secure employment and you can service your mortgage then NE is notional.
For many who have lost their jobs it is a real existing problem.

no lads selling would not be an option as i would still owe a considerable amount to the banks and maintenance company that services the apartments

daltonmd

superbad50 wrote: »

hi ,

yes it genuinely does seem like the best option for me at the moment. I am just sick of the stress and worry , so much that i wouldn't care where i lived or what happened to my house. the whole recession / economic downturn has left a sore taste in my mouth

Good advice there. Thing to remember is that you are not alone and there are services available to you, use them, stop worrying, I know it's easier said than done but making yourself ill won't do you any good. You are not burying your head, you are looking at your options and planning to deal with this situation.

Good Luck

daltonmd

Monty Burnz

Villa05 wrote: »

Clean Slate better than - €X00,000 of negative equity

This is often true, but not always. Getting rid of negative equity is a great relief in the short term, but if you try to buy property in future you'll end up paying through the nose for credit (if you'll even be considered for it).

There comes a tipping point where the higher cost of credit in the future meets or exceeds the money you'll 'save' by defaulting on the loan.

(in fact, this is more or less what the government is arguing for us repaying our national debts right now)

D3PO

tricky one OP.

You need to approach the bank and see what agreement you can come to.

Only you know what the sums are, but you need to make an agreement based on your position not the banks. If they dont like it you need to stand your ground and tell them if they dont comply they wont be getting a single penny off you.

This should focus their minds. There are deals being done they just arent being published. For the bank to agree to taking the home back and writing off the debt although not officially happening by all reports is taking place.

Best of luck

daltonmd

Monty Burnz wrote: »

This is often true, but not always. Getting rid of negative equity is a great relief in the short term, but if you try to buy property in future you'll end up paying through the nose for credit (if you'll even be considered for it).

There comes a tipping point where the higher cost of credit in the future meets or exceeds the money you'll 'save' by defaulting on the loan.

(in fact, this is more or less what the government is arguing for us repaying our national debts right now)

You know Monty, I have a feeling that those who do get themselves out of this mess will be very reluctant to ever borrow to buy property again.
A lot of people bitterly regret entering the property market and will not make that mistake twice.


daltonmd

Duke Leonal Felmet

daltonmd wrote: »

Monty Burnz wrote: »

This is often true, but not always. Getting rid of negative equity is a great relief in the short term, but if you try to buy property in future you'll end up paying through the nose for credit (if you'll even be considered for it).

There comes a tipping point where the higher cost of credit in the future meets or exceeds the money you'll 'save' by defaulting on the loan.

(in fact, this is more or less what the government is arguing for us repaying our national debts right now)

You know Monty, I have a feeling that those who do get themselves out of this mess will be very reluctant to ever borrow to buy property again.
A lot of people bitterly regret entering the property market and will not make that mistake twice.


daltonmd

Hopefully. This notion that people are entitled to buy a house is not a good thing. For example, Switzerland is one of the wealthiest countries in the world (by many metrics), and yet just 22% of it's people own a house. I hope that Ireland moves in this direction.

Monty Burnz

Duke Leonal Felmet wrote: »

Hopefully. This notion that people are entitled to buy a house is not a good thing. For example, Switzerland is one of the wealthiest countries in the world (by many metrics), and yet just 22% of it's people own a house. I hope that Ireland moves in this direction.

I've said it loads of times - there are good reasons why so many happily rent there. We just have to take a look at the legal protections for both tenants and landlords and the systems that support them, and copy and paste them over here. It's not rocket science if people have a healthy, working rental market in countries 2 hours away from us.

daltonmd

Duke Leonal Felmet wrote: »

Hopefully. This notion that people are entitled to buy a house is not a good thing. For example, Switzerland is one of the wealthiest countries in the world (by many metrics), and yet just 22% of it's people own a house. I hope that Ireland moves in this direction.

I think that may be true to some extent for some people, but I think it only fair to remember that rents in this country became out of control. Suddenly those who may have rented were "steered" towards buying.
Remember the bank advertisements showing the young couple in the back of the taxi?
Credit was readily and easily available to anyone who looked. Young people were faced with paying exorbitant rents or getting cheap teaser rates and signing up for them for 40 years, all the while being told "property only ever goes up" and thinking if their circumstances changed then they could sell up, make a few quid and carry on.
Add to that the poor rental market that existed, lack of regulation, lack of decent property, very few rights for tenants. This recession will change that to a degree.

daltonmd

Duke Leonal Felmet

Monty Burnz wrote: »

Duke Leonal Felmet wrote: »

Hopefully. This notion that people are entitled to buy a house is not a good thing. For example, Switzerland is one of the wealthiest countries in the world (by many metrics), and yet just 22% of it's people own a house. I hope that Ireland moves in this direction.

I've said it loads of times - there are good reasons why so many happily rent there. We just have to take a look at the legal protections for both tenants and landlords and the systems that support them, and copy and paste them over here. It's not rocket science if people have a healthy, working rental market in countries 2 hours away from us.

I agree.

Duke Leonal Felmet

daltonmd wrote: »

Duke Leonal Felmet wrote: »

Hopefully. This notion that people are entitled to buy a house is not a good thing. For example, Switzerland is one of the wealthiest countries in the world (by many metrics), and yet just 22% of it's people own a house. I hope that Ireland moves in this direction.

I think that may be true to some extent for some people, but I think it only fair to remember that rents in this country became out of control. Suddenly those who may have rented were "steered" towards buying.
Remember the bank advertisements showing the young couple in the back of the taxi?
Credit was readily and easily available to anyone who looked. Young people were faced with paying exorbitant rents or getting cheap teaser rates and signing up for them for 40 years, all the while being told "property only ever goes up" and thinking if their circumstances changed then they could sell up, make a few quid and carry on.
Add to that the poor rental market that existed, lack of regulation, lack of decent property, very few rights for tenants. This recession will change that to a degree.

daltonmd

Yeah, hopefully it will change, but as Monty said we need a change in legislation. That needs a pressure group, however.

petethebrick

Rent out the other room and don't tell the bank??

m'lady

petethebrick wrote: »

Rent out the other room and don't tell the bank??

It wouldnt be really the bank he would be not telling that is important, it would be the HSE as he is getting mortgage supplement, and that could open a whole new can of worms unfortunately...

Rabidlamb

OP, Snakebloods advice has covered everything.

Remember there are over 100,000 already in arrears or have restructured their mortgages.
They have a long list to go through before you become their next target.
Look for a payment holiday then interest only from your bank.
Make whatever payment you can but do not, I repeat, do not sacrifice your well being.
You come first, they get what's left over, OK.

Snakeblood

Rabidlamb wrote: »

OP, Snakebloods advice has covered everything.

Remember there are over 100,000 already in arrears or have restructured their mortgages.
They have a long list to go through before you become their next target.
Look for a payment holiday then interest only from your bank.
Make whatever payment you can but do not, I repeat, do not sacrifice your well being.
You come first, they get what's left over, OK.

My advice was listen to the other guy.:cool:

El Weirdo

m'lady wrote: »

It wouldnt be really the bank he would be not telling that is important, it would be the HSE as he is getting mortgage supplement, and that could open a whole new can of worms unfortunately...

Actually, the HSE payment would probably be nothing compared to what he would lose on Interest Relief. So it would really be the Revenue that he would have to keep it from.

the groutch

Bankrupty should be the absolute last, explored every single other avenue, done everything I can bar go out on the streets begging, final resort.
Because once you do, you're pretty much shutting yourself off from every credit institution, and if you need to borrow money for any reason in the future, you won't even get the time of day.

superbad50

daltonmd wrote: »

You know Monty, I have a feeling that those who do get themselves out of this mess will be very reluctant to ever borrow to buy property again.
A lot of people bitterly regret entering the property market and will not make that mistake twice.


daltonmd

that's for sure . i dont think i will ever borrow again , nor half my friends.

superbad50

petethebrick wrote: »

Rent out the other room and don't tell the bank??

could do , but i feel a moral obligation not to. i am getting help off the HSE , social welfare at the moment and am very grateful. wouldn't feel right to expect the tax payer to pay anymore than they are for my own recklessness

superbad50

Rabidlamb wrote: »

OP, Snakebloods advice has covered everything.

Remember there are over 100,000 already in arrears or have restructured their mortgages.
They have a long list to go through before you become their next target.
Look for a payment holiday then interest only from your bank.
Make whatever payment you can but do not, I repeat, do not sacrifice your well being.
You come first, they get what's left over, OK.

yes totally. banks will be coming second from now on. i am actually so annoyed with myself that i let it come to this. i have been so stressed , depressed , anxious that i cannot make rational decisions no more. it has thrown me so far it is scary. i totally understand so many people in this day and age suffer emotional and psychological health problems

superbad50

Snakeblood wrote: »

Listen to this guy.

hi ,

thanks for the excellent advice. i think u covered every logical avenue to pursue. i am a natural worry so i do tend to panic over the slightest of things. i will most certainly have to work on this as it's not good for my well being and mental state.

your comments and way with words are reassuring . the banks need to be put under a bit of pressure , even if nothing comes of it , at least i am fighting back. to think of the days i left myself without food and heating fretting over having insufficient mortgage funds. the brain works in mysterious ways when under constant stress . i am glad there is sites , such as boards to talk about these issues .

daltonmd

superbad50 wrote: »

hi ,

thanks for the excellent advice. i think u covered every logical avenue to pursue. i am a natural worry so i do tend to panic over the slightest of things. i will most certainly have to work on this as it's not good for my well being and mental state.

your comments and way with words are reassuring . the banks need to be put under a bit of pressure , even if nothing comes of it , at least i am fighting back. to think of the days i left myself without food and heating fretting over having insufficient mortgage funds. the brain works in mysterious ways when under constant stress . i am glad there is sites , such as boards to talk about these issues .

superbad, screw the banks. Stop looking at what is best for them and look at what's best for you. As long as you work with them (even if they don't work with you) then trust me in the long run this is what will stand to you.

I had the pleasure of being present in a court case some years ago, where a man was taken to court by a bank for non payment of a loan.

His situation was that he had an accident and was 18 months recovering. He wrote to them constantly, he sent them small amounts when he could and when they started to put the pressure on him his brother in law wrote to them saying the he would employ the man for doing minimal tasks in his business for 20 hours per month and pay the bank, on the brother in laws behalf ALL the earnings, about 250 Euro per month.

The bank refused. So it ended up in court.
The Judge went ballistic, the debt was about 50k as I recall and the bank had a full legal team at the table, the Judge said that they could have saved a large portion of the debt by negotiating with the man instead of costing them all their legal fees and the state a fortune by having to provide legal aid to the man, as well as his time and the courts time.
He ordered the man to pay 50 euro a week off the debt.

What stood to the man is that he made every effort to come to an agreement with the bank.

Go easy on yourself, you weren't reckless, your circumstances changed and you are trying to better yourself.

Good luck

daltonmd

mari2222

The rent a room scheme is not technically "renting" and allows you receive up to 10,000 per annum from your "renter".

ebixa82

superbad50 wrote: »

hi ,

by renting out the room i lose my mortgage interest of my mortgage interst supplement contribution , so just say if i were renting a room for 300 per month i would lose 400 per month , so i would be in a deficit of 100 euro. doesnt make sense i know but that's the way the system is. i would be further in arrear's

You would only lose the MISC if you declared that you were actually renting out the room!
Don't bother registering and get the money.
This is unethical and somewhat dodgy but desperate times can mean desperate measures.

superbad50

daltonmd wrote: »

superbad, screw the banks. Stop looking at what is best for them and look at what's best for you. As long as you work with them (even if they don't work with you) then trust me in the long run this is what will stand to you.

I had the pleasure of being present in a court case some years ago, where a man was taken to court by a bank for non payment of a loan.

His situation was that he had an accident and was 18 months recovering. He wrote to them constantly, he sent them small amounts when he could and when they started to put the pressure on him his brother in law wrote to them saying the he would employ the man for doing minimal tasks in his business for 20 hours per month and pay the bank, on the brother in laws behalf ALL the earnings, about 250 Euro per month.

The bank refused. So it ended up in court.
The Judge went ballistic, the debt was about 50k as I recall and the bank had a full legal team at the table, the Judge said that they could have saved a large portion of the debt by negotiating with the man instead of costing them all their legal fees and the state a fortune by having to provide legal aid to the man, as well as his time and the courts time.
He ordered the man to pay 50 euro a week off the debt.

What stood to the man is that he made every effort to come to an agreement with the bank.

Go easy on yourself, you weren't reckless, your circumstances changed and you are trying to better yourself.

Good luck

daltonmd

my god that is unbelievable. I understand my rights and i know it takes a couple of years before they can repossess. I have kept all of my emails , letters , faxes etc etc showing my willingness to meet repayments. You are right I am being extremely hard on myself , to the extent I am not myself and feeling very stressed.

I will keep in touch with the banks , MABS etc and see how things develop. hopefully circumstances will change sooner rather than later . I know there are a lot of people in the same situation , some worse off. keep on trucking thats all we can do .

thank you for your excellent advice
I

superbad50

ebixa82 wrote: »

You would only lose the MISC if you declared that you were actually renting out the room!
Don't bother registering and get the money.
This is unethical and somewhat dodgy but desperate times can mean desperate measures.

yes you are right , generally I would not like to go down this path , but i may have to as i do not see things picking up anytime soon. If it is a case were it either lose my house or claim illegally then for sure i will choose the lather . only in ireland would you get scenarios like this