Escaping Negative Equity...thoughts

[Billo]

sharedRespon

you have two good jobs.
You have plenty of income.
You can well afford the mortgage.


You need to think positively.
Forget about negative equity and burden of loss.
Judging by what you have written above you have plenty to be positive about.

 

[Luternau]

sharedRespon

you have two good jobs.
You have plenty of income.
You can well afford the mortgage.


You need to think positively.
Forget about negative equity and burden of loss.
Judging by what you have written above you have plenty to be positive about.

This is good advice. As I said much earlier, the negative equity is not something to worry about when meeting payments. Negative Equity mortgages are coming on stream and with your earnings you may be perfect candidate -so don't feel that you are trapped in that property for 35yrs. But, you need to sort that spending.

 

[sharedRespon]

Thank you all for the honest feedback

 

[cremeegg]

If we followed this thinking then we'd need to compensate everyone who made a bad financial decision:

- The pensioners who invested in BOI/AIB shares because they thought it was safe for their retirement.
- The parents who invested their hard earned savings in college funds for their kids.
- The business man who's enterprise fails through no fault of his own...
- The pension funds who invested in Irish bonds and now have large deficits and will be unable to pay out the expected pensions to their members
- The list just goes on.....

Everyone of these people made bad financial decisions that they will have to live with well into the future, why should we single out the property owners in negative equity for special treatment???

We should single out people like this op because with a a combined income of €106 k and a remaining mortgage term of 30 years, these are the people who are the future of our country. (I am assuming that this high earning reflects an even greater contribution to the country's economy and is not just some well paid sinecure.) And to saddle them with paying for the mistakes of the past is in no ones interest.

This is not a moral argument just a pragmatic belief that if we force these people to pay for the mistakes of the past they may decide to simply opt out, and where does that leave the rest of us.

The issue is not just their personal debt but also the public debt we are incurring at the rate of €1 billion a month. These people are going to be taxed to pay that.

If Ireland's debt problem is not addressed, the country will become unlivable for people like this and that is in no ones interest.

 

[Luternau]

The OP is not someone that is pinned to their collar because of the sins of anybody. All of us are being taxed to account for the sins of the past-but I see no logic in your argument that they be cut some slack. Their duty and legal obligation, whether in 2007 or 2013 is to pay the bank. They can afford to pay it back. Therefore I see no 'pin', no 'collar' and no 'saddle' here. I do see excessive spending and no savings for a rainy day-something they need to address if you ask me.

For other people that have lost jobs as a result of the big mistakes of past Govts, Banks etc, absolutely, they need lots of assistance. However, the OP should not hope for the same type of assistance or redress. As you allude to, the assistance is not free-we all pay for it in our taxes.

 

[Jim2007]

We should single out people like this op because with a a combined income of €106 k and a remaining mortgage term of 30 years, these are the people who are the future of our country. (I am assuming that this high earning reflects an even greater contribution to the country's economy and is not just some well paid sinecure.) And to saddle them with paying for the mistakes of the past is in no ones interest.

People who saddle the country with additional debt because they are unwilling to meet their obligations are not the future of the country, they are just making it more difficult for everyone else! Like I already said just because someone pumped money in to a property does not make them special - people who lost their life savings in pension funds etc... are just as entitled to expect to be compensated.

This is not a moral argument just a pragmatic belief that if we force these people to pay for the mistakes of the past they may decide to simply opt out, and where does that leave the rest of us.

No worse of than we were! We are not talking here about someone is unable to meet their debts, we are talking about someone who is unwilling to do so. And if we are going to give anyone a break then it should be those who are unable to meet their obligations and are in some serious financial difficult.

The issue is not just their personal debt but also the public debt we are incurring at the rate of €1 billion a month. These people are going to be taxed to pay that.

You are right, but so is every other citizen who took no part in the decision to run up these personal debts, but must no chip in to cover the cost of the exercise. Expecting them to pay additional taxes, while giving a free pass to someone who is clearly well able to meet their obligations is a non starter.

If Ireland's debt problem is not addressed, the country will become unlivable for people like this and that is in no ones interest.

Which is exactly why those who can pay should required to do so. The taxpayer has been saddled with enough additional responsibilities.

 

[Bronte]

My point was, as was mentioned, about the 35 years. There were two parties to our mortgage yet we must take the entire burden of the loss.

I am looking for a way forward, like crystallise the loss and share that with the bank. We could then plan for some sort of future beyond this debacle. I am not looking to walk away from the debt but if some sort of way is found what's to stop me from declaring bankruptcy?

We are in that sector of society that can afford their mortgage in the short term but long term we will need some sort of attention as 35 years of paying dead money is utterly depressing and unsustainable.

.

Your thinking is way off on this. Everybody who gets a mortgage finds it tough at the beginning, you've a situation of NE and you don't want the bank to share this 'loss', you want the taxpayers to pay it. If your property had doubled in value would you be on here asking us how to share this 'gain' with the bank?

It was you who decided on 35 years, and you who decided to take out such a large mortgage. Are you not happy in the house you live in and with the two good jobs you have? Are you not indeed a lucky man? What is the 'wealthy' that you are looking for, what is in this 'wealthy' that you need or want. And would it make you happy.

There is a lot of talk currently in Irish society from the won't pay brigade, to justify their stance. Are you becomming one of those? Is this influencing you?

I note that you have not told us your actually net salary. Yet you have blamed the cost of the mortgage for the fact that you have no savings. I respectfully sugggest that you have no savings because you have spending issues.

Are you seriously suggesting that you would walk away from two perfectly good jobs to declare bankruptcy, can you expand on that thinking, I mean that's just absolutely crazy.

To help you and give you some concrete suggestions, yes 30 years remaining is a long time, but you can do something about it, by curtailing your spending, by saving and by overpaying your mortgage you can easily bring down that term. But it's a matter of discipline.

Also bear in mind that as each year goes by the NE is getting less, and you never know, inflation or an increase in house prices might literally overnight wipe out a lot of the NE issues.

Cremegg & Negotiation, the OP is not in any trouble and have two good jobs, the NE is irrelevant as they don't need to move and yet you both think something should be done for him. Pray tell who is going to pay for this? There are plenty of people in NE not looking for anything, just doing the right thing, paying back the debt they incurred and not being a burden on other taxpayers.

 

[burmo]

My question would be, if the prices in 5 or 10 years are back to where they were when you bought or even 5% will you still wish to escape from paying back 'dead money'? Because with inflation this is what is very very likely to happen IMHO.

 

[sharedRespon]

I appreciate all the comments and understand where you are coming from.
As a previous poster has stated we are living in extraordinary times. We don’t want to walk away from our debt but we can’t see a future in this country. We don’t spend money excessively. I agree we could be more discerning. Our net before any spend is 5200 but that is only in the last year. We don’t blame the mortgage entirely, which will rise to over 2100 approx. a month on current AVR in 3 years, it’s the fact that the whole edifice that existed in early 2007 was to buy a house at any cost - Yes we were extremely naïve and as I’ve said we made a major mistake which, to answer most of the respondents here, we will be paying for the next 30 years.

 

[Jim2007]

I appreciate all the comments and understand where you are coming from.
As a previous poster has stated we are living in extraordinary times. We don’t want to walk away from our debt but we can’t see a future in this country. We don’t spend money excessively. I agree we could be more discerning. Our net before any spend is 5200 but that is only in the last year. We don’t blame the mortgage entirely, which will rise to over 2100 approx. a month on current AVR in 3 years, it’s the fact that the whole edifice that existed in early 2007 was to buy a house at any cost - Yes we were extremely naïve and as I’ve said we made a major mistake which, to answer most of the respondents here, we will be paying for the next 30 years.

You need to grow up and start to learn how to manage your money, seriously!

A disposable income of 5200 per month would be considered a good income even by Swiss standards! And out of that you'd expect to pay about 2k in rent for a 3 roomed apartment, save about say 1k, pay about 4k p.a. in health insurance and support a family of 4 on the rest including an annual holiday! Now if two of you can't learn to do that in Ireland on the income you have, I doubt you'll learn to do it any where else either!

 

[cremeegg]

Originally Posted by cremeegg

We should single out people like this op because with a a combined income of €106 k and a remaining mortgage term of 30 years, these are the people who are the future of our country. (I am assuming that this high earning reflects an even greater contribution to the country's economy and is not just some well paid sinecure.) And to saddle them with paying for the mistakes of the past is in no ones interest.

People who saddle the country with additional debt because they are unwilling to meet their obligations are not the future of the country, they are just making it more difficult for everyone else! Like I already said just because someone pumped money in to a property does not make them special - people who lost their life savings in pension funds etc... are just as entitled to expect to be compensated.

I am bot talking about deserving cases, people who lost money lost money, thats history. But it is the OPs future contribution to the Irish economy I am concerned with.


Originally Posted by cremeegg

This is not a moral argument just a pragmatic belief that if we force these people to pay for the mistakes of the past they may decide to simply opt out, and where does that leave the rest of us.

No worse of than we were! We are not talking here about someone is unable to meet their debts, we are talking about someone who is unwilling to do so. And if we are going to give anyone a break then it should be those who are unable to meet their obligations and are in some serious financial difficult.

We are worse off if productive members of society become discouraged, and it is more in our broader interest to resolve their situation that that of people who may seem to have a nore attractive back story. I am not talking charity I am talking about society's self interest.


Originally Posted by cremeegg
The issue is not just their personal debt but also the public debt we are incurring at the rate of €1 billion a month. These people are going to be taxed to pay that.

You are right, but so is every other citizen who took no part in the decision to run up these personal debts, but must no chip in to cover the cost of the exercise. Expecting them to pay additional taxes, while giving a free pass to someone who is clearly well able to meet their obligations is a non starter.

I am not suggesting a free pass at the taxpayers expense, jus suggesting that the OPs problem is our problem too.


Originally Posted by cremeegg
If Ireland's debt problem is not addressed, the country will become unlivable for people like this and that is in no ones interest.
Which is exactly why those who can pay should required to do so. The taxpayer has been saddled with enough additional responsibilities.

If those who are deemed able to pay are required to pay for the rest of their lives, those with the talent and energy may just decide to leave.

Apologies for the awkward formatting I cannot figure out how to do the blue thing

 

[Mouldy]

Is your home in a good rental area? Could you rent the house out through an agent if you move abroad?

If the rental income if very high in your area and the local authority are looking for houses there, enquire about the 10 year leaseout option. You are early into a 35 year mortgage and are therefore paying lots of interest, you can write 70% of this off against tax on rental income.

There is no hope of the bank giving you even a dollar off this mortgage. If you wan to go down that road, go to England and go bankrupt. This is not a trivial decision but it will (eventually) solve your problem, while creating a load more.

If you both have good jobs and the jobs look like they will be secure, you really need to ask yourself why you want to emigrate. If you don’t like where you live you can easily afford to rent out your current house and rent somewhere else.

As for the next 35 years, you are comparing all of those years with the current year. Central banks all over the world are printing money and the EU seems to be mooting a mechanism that would have the same effect – inflation. With good income and carefully managed finances, things might not work out as badly as you think.

M

 

[Bronte]

, to answer most of the respondents here, we will be paying for the next 30 years.

I find your response evasive. And to that comment in particular let me say this, what you've written there applies to everybody who has ever had or will have a mortgage. We all spend most of our mature adult working life paying off a mortgage, what is wrong with that idea for you, what makes it different for you?

Tell me, seeing as you seem preoccupied with the length of your mortgage, let's pretend you didn't have a mortgage, what would you pay in rent for an equivalent house currently?

 

[Bronte]

Apologies for the awkward formatting I cannot figure out how to do the blue thing

No idea what this post is about.

In any case, you think the OP should have some kind of debt forgiveness, is this correct? Who should pay for this?

Bearing in mind the OP can well afford their mortgage, that they freely went into it, that they have two good jobs, you actually think they should be let off the mortgage?

 

[Mrmr]

we will be paying for the next 30 years.

But this is the same for everyone? How do you think you are different? Unless you intended on flipping the property for a fairly immediate cash gain and no mortgage period? If that was it, then your investment just didn't work out and maybe changing to a rental would work better for you? If having this investment simply no longer suits you, then you may have to crystallize the loss and accept it. Investments may fall as well as rise

No one made you take out a mortgage, unfortunately a lot of us got stuck with inflated mortgages due to the times we lived and live in. If it's still a nice home and you have a nice life then all is OK, no?

 

[flattea2]

I appreciate all the comments and understand where you are coming from.
As a previous poster has stated we are living in extraordinary times. We don’t want to walk away from our debt but we can’t see a future in this country. We don’t spend money excessively. I agree we could be more discerning. Our net before any spend is 5200 but that is only in the last year. We don’t blame the mortgage entirely, which will rise to over 2100 approx. a month on current AVR in 3 years, it’s the fact that the whole edifice that existed in early 2007 was to buy a house at any cost - Yes we were extremely naïve and as I’ve said we made a major mistake which, to answer most of the respondents here, we will be paying for the next 30 years.

But you haven't really understood where posters are coming from really have you judging by this post? Its back to the poor us thing, a sense of entitlement to an upside only on purchasing assets.

Over 30 years with inflation and a recovered economy, you will be fine.

You say "we can't see a future in this country". That's extraordinarily negative, you really think Ireland has no future? I think Ireland is a great country.

Why do you feel so aggrieved?

 

[breathe]

Looking at a mortgage term of 30 years is daunting for most an alternative perspective or view you might consider is overpaying your mortgage. This would involve looking at all your outgoings and looking at what you can realistically overpay. It will take years off your mortgage and ensure you pay the lender less in interest in the long run.

I realise that you are currently on a fixed rate and may not be able to overpay but get in touch with your lender and see what rules apply with them. We have a fixed rate but our lender allows us to overpay monthly.

There are some excellent mortgage calculators which illustrate the impact overpaying would have on your mortgage. Look at some of the Key Posts in the Deposits section of this site.

 

[Luternau]

Agree with all ( bar creamegg/negotiator)

The OP does not get:
-they bought, not the bank
-they could have rented
-they choose the mortgage (amount and term)
-the value of homes will always rise/fall
-the value of a home cannot just be equated to a monetary sum
-negative equity only comes into play if selling

They also don't get that
-their financial future is theirs to make with prudent saving or ruin with excessive spending
-that worrying about negative equity won't get them anywhere
-that despite saying they are not looking for a write off, that is exactly what they asked about.

In summary - a serious reality check needed.

 

[daftpunk]

As for the next 35 years, you are comparing all of those years with the current year. Central banks all over the world are printing money and the EU seems to be mooting a mechanism that would have the same effect – inflation. With good income and carefully managed finances, things might not work out as badly as you think.

M[/QUOTE]

Is this true??, sounds like light at the end of the tunnel if so. The only positive I've heard anyway.

 

[daftpunk]

I too am unable to do the blue thing for quoting, apologies!