Should I use an inheritance to clear the arrears on a buy to let?

Discussion in 'Mortgage arrears & negative equity case studies' started by Deleted 15555, 18 Nov 2018.

  1. We have mortgage arrears on a rented house that we were advised to stop paying rent on a year ago. In the meantime my Dad has died and left us around 150k also my job has changed and I am earning 3x the amound that I was last year (70k) and husband (55k). There is around 80k due in arrears. Can anyone advise should we pay off the arrears or can a deal be made for half or a % of them. Or could anyone advise someone even to go and see. We have no other debts outstanding whatsoever. We just got into a bit of trouble during the recession when we had two children with special needs and I had to stop working but thankfully everything has settled down now. We are not in arrears in our own home either. No credit cards, car loans nothing else. The rent will more than cover the mortgage at present. Thankfully too. Any advice would be very much appreciated.
     
  2. noproblem

    noproblem Frequent Poster

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    It's difficult to understand your post as written. I'm presuming you have a house that you and your husband have rented to someone and the money received for the rent is paying a mortgage on this property. However, you guys accumulated substantial arrears over some time by not paying your mortgage and you seem to be suggesting that someone told you to stop paying the mortgage? Who told you this? You still owe the bank this money and your remaining mortgage and it's accumulating all the time. We don't know how much your mortgage is, or if you have 2 mortgages, nor do we know how much is owed on the mortgage/mortgages. Too many unknowns in the question.
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    You have around €150k cash.
    You have €80k arrears.

    Of course, you should just clear your arrears.

    You have the money. You owe the money. You pay it.

    The only thing I would like to know is what was the basis for advising you a year ago to stop paying the mortgage? The rent covered the mortgage but you chose not to pay your mortgage.

    And I get criticised for saying that there are people who deliberately default on their mortgage!

    Brendan
     
  4. Bronte

    Bronte Frequent Poster

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    Yes you pay off the arrears, there is no reason why the bank would accept less than the full amount, why would they? Who advised you to stop paying the mortgage? I'm surprised you have not been receiving legal letters from the bank?
     
  5. This site is supposed to help people. You have no idea of my circumstances. No wonder people do things when they have people like you Brendan Burgess and Bronte on your pulpit criticizing them. So much for asking for advice. You have no idea of the horrendous few years we have had, shocking that this is what this country has come to. In the meantime, I have been adviced not to use the inheritance on arrears. I will now also leave this farce of a site. As I said its no wonder people in this country take their own life when they are criticised and put under pressure by people like you who have judged me when you don't know of my personal circumstances
     
  6. Brendan Burgess

    Brendan Burgess Founder

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    Actually, you gave a comprehensive summary of all the relevant information in your first post:

     
  7. The Horseman

    The Horseman Frequent Poster

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    Based on the facts you supplied in your initial post the advice to pay off your outstanding arrears on the buy to let was correct. You owe the money, you have the funds to discharge what you owe so you should pay what you owe. You went through tough times and have come out of them. It has happened to a lot of us.

    You indicate you were advised to stop paying. Why?

    You indicated the rent would cover the mortgage now, so why not pay the arrears, let the rent cover the mortgage and you will own the property in time.

    Your tone is unfair to those who took the time to answer your post. Based on the information provided the answers were fair. You may not have liked the responses but that does not give you the right nor anyone else to use this type of language.
     
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  8. Brendan Burgess

    Brendan Burgess Founder

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    Hi SBW

    This is poor advice. It seems to be a profitable investment in that the rent received covers the mortgage repayments.

    There is a significant risk that the lender will appoint a Receiver to the property which will result in extra costs and probably the loss of the property.

    Brendan
     
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  9. MangoJoe

    MangoJoe Frequent Poster

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    There's a very interesting thread here started by an astute and very well informed Lady.

    This Lady had the depth of judgement and good insight to listen to the forewarnings of the property crash when others charged on blindly.

    - In my opinion this same person is now choosing her advisors with significantly poorer judgement.

    https://www.askaboutmoney.com/threads/to-sell-our-rent-property.58443/

    For what its worth I don't think you were judged particularly harshly on here - You got a few gentle nudges from people who are most likely all paying their debts in good faith - presumably without the benefit of an inheritance.

    My condolences on the passing of your father and it should be said that without knowing the challenges you've faced with you childrens special needs I do have some experience of this and know that it can be a massive and all consuming thing - Glad to hear you mention that you've turned a corner.
     
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  10. mugsymugsy

    mugsymugsy Frequent Poster

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    Sorry for your loss and sometimes when tough facts are given to people that are personal they hurt. Take the emotion out of it and imagine if it was someone else. Then make your decision.

    In my oponion you are in a position to clear your debts and have a clean slate or come back here in a year's time in a trickier position.
     
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  11. AlbacoreA

    AlbacoreA Frequent Poster

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    I think its a bit of a kick in the teeth to have gone through such tough times, with no help, for others to be able to get a deal on debts, but the OP can't. Seems like there is no reward for doing the right thing, you seem to get penalised for it. Still it makes no sense not to clear the debts then the new prosperity will be all the sweeter. I hope whatever you do, it easier for you going forward.
     
  12. Bronte

    Bronte Frequent Poster

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    Yes we don't know your personal circumstances other than what you told us. You never mentioned anyone being suicidal. In fact you said:

    We just got into a bit of trouble during the recession when we had two children with special needs and I had to stop working but thankfully everything has settled down now.

    That was it. I had not realised that you

    a) came on here to hear the advice that suited you to hear
    b) needed sympathy, which I've no problem supplying
    c) once you got the advice would criticise the advice and attack anyone who did offer advice.
    d) were suffering from a horrendous few years

    If I or anyone else had advised you to not pay off the arrears I get the impression you wouldn't have imploded on them like you did. This is a money website.

    You asked
    a) whether you should pay off your arrears with an inheritance or not

    You were told:

    Yes you should, of course you should. That's all. And then you were asked pertinent financial questions about why you were thinking or advised not to pay off the arrears. Which you've decided not to supply us.
     
  13. Bronte

    Bronte Frequent Poster

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    More here:

    https://www.askaboutmoney.com/threads/can-you-suggest-dropping-price-on-sale-agreed-house.64498/
     
  14. Laramie

    Laramie Frequent Poster

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    At some stage you will have to pay the arrears.

    Maybe you want to wait until you are selling the property to clear the arrears? If so you are making the bank wait for what is owed to them now.

    Are you paying additional/penalty interest on the arrears?
     
  15. Purple

    Purple Frequent Poster

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    I thought the first post was a wind-up; I owe a load of money. I now have a bigger load of money. Should I use some of the money I now have to pay off my debts?

    ... what other answer did the OP think they were going to get?

    It's up there with the "My employer overpaid me. Should I tell them or keep the money?" question that pops up from time to time.

    What's next?
    Question; "My elderly neighbour keeps leaving their keys in their car. Should I steal it?"
    Answer; "No"
    Reply; "How dare you. People kill themselves you know?!"

    Question; "I work in a shop. The CCTV is broken. Should I steal a load of stuff?"
    Answer; "No"
    Reply; "How dare you. People kill themselves you know?!"

    Question; "My son got €2000 for his confirmation. He's a bit of a thick. Should I just keep half of the money and act like I don't know what he's talking about when he asks me for it?"
    Answer; "No"
    Reply; "How dare you. People kill themselves you know?!"
     
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  16. Brendan Burgess

    Brendan Burgess Founder

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    Purple

    I agree with the general trend of your post.

    But, many people in Ireland have been encouraged to thinking that paying your mortgage is optional. There is little or no sanction for not paying your mortgage.

    Many people are convinced that if they build up arrears, the lender will do a deal with them. So the more arrears the better.

    And to an extent, with generous PIAs, split mortgages and Mortgage to Rent, this strategy has worked.

    So the OP got advice from someone not to pay their mortgage. It's hard to understand this but so far, the advice seems right.

    It's very odd that the lender has not appointed a Receiver as it's a buy to let.

    Brendan
     
  17. robert 200

    robert 200 Frequent Poster

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    Some banks have been very slow to appoint receivers . A friend of mine had his 3 buy to lets taken over by a receiver last week. He had been paying interest only for 8 years in total.
     
  18. Brendan Burgess

    Brendan Burgess Founder

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    Hi Robert
    Was it ptsb by any chance?

    Brendan
     
  19. robert 200

    robert 200 Frequent Poster

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    Correct Brendan
     
  20. Brendan Burgess

    Brendan Burgess Founder

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    I don't think that BoI would have tolerated that for so long.

    Brendan