Negative Equity on Second Home

[angela59]

Hi All

My husband and I purchased a second home in Spain back in 2005. We took out the mortgage with PTSB on our main residence we had a very small mortgage on our main residence and a lot of equity built up at the time. The purchase wasn't for investment it was for use as a holiday home and to keep long term for our retirement. With the very high SVR that PTSB are charging together with wage cuts and austerity taxes we can no longer afford this mortgage and put the Spanish property on the market last October 30% below what we paid for it as the property market in Spain is in decline also and we were fearful that if we held on property prices would fall further there. We have accepted an offer but by the time all fees etc are paid we are taking a hit of E80,000 due to the fact the property in Spain is in negative equity. We will pay down what we receive from the sale off the mortgage we took out on our main residence. This E80,000 loss is a hard pill to swallow, if you were in my shoes would you approach PTSB, explain the situation and ask the bank if they are willing to do a deal or do I just swallow the negative equity and move on.

Advice appreciated.

Angela59

 

[Bronte]

When you sell Spain, you are going to use the proceeds to pay down your home mortgage but you will still be left owing 80K is that your situation?

If yes I don't see how PTSB will negotiate with you. If you then owe 80K and can afford to pay it what is the issue.

Basically you want PTSB to take the hit you've taken on your loss in Spain. They are not going to do this.

If you can afford the 80K, then it's a bitter pill yes, but there you go. At least you won't have the hassle of Spain and the stress of a larger mortgage. When you dopart pay back the mortgage, would you be able to move to another lender to get a lower interest rate mortgage?

 

[angela59]

Hi Bronte,

Thanks for the reply. I'll owe the E80,000 along with outstanding balance of mortgage to be paid. I will try and switch but our own house would not have the equity it used to have as prices here have dropped by 50%. Even if I was able to negotiate a fairer rate. I appreciate your advice even though it is a hard pill to swallow.

Angela59