The figures make no sense. Rental income of 100,000 would comfortably service EUR 2,000,000 worth of debt. LTV of 20% with debt of 400,000 would value the portfolio at EUR 2,000,000. What's the problem?
our preferred option is to keep going and pay off 100k mortgage per year for the next 4 years but it is a tight squeeze as the business that my father is using to help pay off the mortgage is not doing well and could go under.
How much 'extra' does he need for the 4 years other than the rental income. I hope his business is limited. If not he may need to start thinking about putting property into his spouses name.
Rusty, does your father own just one property or a property portfolio? If he owns several properties, could he sell just one of them and use the proceeds to help him pay off the mortgages on other properties?
Could you or other family members loan him the money privately? (With a proper loan agreement, of course.) Not the whole amount of the mortgage, just the shortfall between his mortgage repayments and rental and any other income he has, if it comes to that?
Once the mortgages are paid off, he can then repay the private loan.
It does seem that it's best to hang on if at all possible.
My question wasn't answered so maybe I wrote it incorrectly.
There is rent of 100K to pay the mortgages and running costs and tax on rental income. What we don't know is how much is the subsidy from the business. That is the figure the OP needs and from that we may be able to generate ideas.
For example as the lender is not budging could the OP borrow a personal loan to pay the mortgages, this is a crazy idea, but it may make sense if one had all details.
Rustyjack in his last post mentioned that actually there is no money from the business, and maybe a decision needs to be made in relation to the business.
In this climate, and without real facts and figures, but in any case, thread very carefully before committing 'relations' money toward this.
thanks very much for help with this bronte. It is much appreciated!!If he didn't pay tax on the rent for 4 years would that solve the problem. Would be liable for penalties and interest though. But revenue are being more flexible in relation to arrangments. Is it more important to pay the bank or revenue.
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