Cannot afford to subsidise mortgage on rental property

R

Random Guy

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Several years ago, I was self employed & bought an apartment which I had intended on being my pension on retirement.

The property price was €330k. I paid a deposit of €40k off it & borrowed €290k on interest only.

Flash forward three years & we know what's going on. The development is almost full, with about 100 units left. however these are slow to sell @ €170k fully furnished.

I have a tenant in there right now (SW Recipient), & he pays €900 pm leaving a shortfall of €450 (+ an additional €160 pm management fees). We've been making it up every month, but have just missed the last two payments due to a small shortfall in the balance (on one occasion it was just €4 short).

I wrote to the bank last week to see if they could do anything & they wrote back this morning to say we don't qualify for a moratorium.

In the week it's taken them to get back to me, I was unexpectedly told my work contract will not be renewed as of tomorrow. So I'm basically out of work. Whatever about struggling before, we just cannot afford to pay it now.

I'm about to write back to them stating that the only amount I can afford to pay them if the €900 rent which is received. I'm also going to have to fall into arrears with the management fees etc.

What do I do ? Is their letter a stalling or negotiating tactic or are they just not going to do anything ?

I'm really up the creek on this one. It's €160k in negative equity & we're out of options.

Actually, there is one option, there's a life policy on me for the mortgage, that would sort it out (with a major obvious drawback).
 
Random Guy said:
Actually, there is one option, there's a life policy on me for the mortgage, that would sort it out (with a major obvious drawback).
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I hope you are joking, dont go doing anything drastic for the sake of a few bricks and mortor. Go back to your bank and inform them your employment contract has ceased they will have to give you a moratorium or deduce your payments. Goodluck to you.
 
As your circumstances have changed you may now qualify for a moratorium. Go and talk to MABS and then talk to the bank again. If a proposal comes through MABS then they may be slower to reject it.
 
Marietta said:
I hope you are joking, dont go doing anything drastic for the sake of a few bricks and mortor. Go back to your bank and inform them your employment contract has ceased they will have to give you a moratorium or deduce your payments. Goodluck to you.
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+ 1. There are very many people in the same position as you. Lets face it they can't afford to build Thornton Hall so locking people up is simply not an option. Tell them they will be getting €900 per month end of. I'm sure its a hell of a lot more than they are getting on other loans. I hope things improve for you soon. LS.
 
Thanks for the support people. I was (half) joking about the policy. The thought did cross my mind more than once, but realistically, I can't give them what I don't have.

We're keeping up payments on the family home, which is not attached to the "Investment" property (ironically referred to as a RIP). Although the mortgage on this is with the same crowd, we would like to keep up these payments (principle & interest) as we fear the risk of losing this should interest rates rise on the other one.

Can they make us take a moratorium on this one (redirecting funds) or are we protected enough to insist that they don't make any changes to this (home) mortgage ?
 
a friend of mine is in a similar situation as your self. they offered thir lender the monthly rent, verified by the lease, and €100. it was accepted. they are, the banks, for now, doing deals.
best of luck!
 
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