rental property dilema - what to do

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topcat32

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I am looking for some advice on my predicament, any advice is appreciated. here are the facts

1) have a property in carlow town with 170k mortgage on it, used to live in this house but now rented out. now valued at 50k or so.

2) rental property is owned by myself and my girlfriend, joint names.

3) currently rent covering mortgage with ulster bank (originally first active), is interest only. interest only running out next year and then rent will not cover mortgage.

4) we now live in family home worth circa 160k. 90k mortgage, 157k or so value. no major money in the bank

5) family home is in my name only

6) only other asset is 1 acre plot , agricultural land which cant get planning. only valued at 10k

we cant afford to be losing money on the rental house . what happens if we default on it, is there any risk to the family home. the ulster bank mortgage is a tracker

thanks for your feedback
 
Perhaps your post should have been on mortage arrears threads where there are many other threads that deal with this type of problem.
Basically you will always owe this money -there'll be a judgement against you.
You don't say what type of guarantee you gave on the loan -not that it really matters because the lender can recover it in any legal way and that includes taking your home .
However, it is most unlikely that they will go after your own home because it is almost unknown for a court to allow the lender to take a debtors home.

Look - be blunt with the lenderas soon as possible. Tell them that you will default as you just can't pay the capital repayments- but if they allow interest only (and perhaps a small bit of capital) then you will manage.

The bank will huff and puff and insist on all your financial details* - and then -probably - give you a few years interest-only extension.

Be as firm and as detailed and as communicative as possible. And sell that field.


*( you must list all your income and your expenditure on everything. Read other posts about this. You can't go a bank and just say -sorry,no money.
The better prepared you are the easier the process of continuing interest-only will be)
 
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