I’ve seen this thread so many times on so many forums. I think her situation is essentially hopeless. She should continue on and see where all this debt forgiveness hype takes us and it might improve her situation. Either way I don’t envisage her getting a mortgage again in this country for at least 15 years.
I’m with buddygunz - cannot think of any sensible advice. Perhaps rent instead of buy with her current partner (as the others here are suggesting).
Btw, you mention its a “she” initially but in your last post its a “he” - just a typo?
I think even renting it is a risk. What would it rent for? €300-400 per month? Factor in the costs and then the hassle of managing a rental all the way from Cork and then the risk factor. A bad tenant could cost you your years rent in a few weeks.
She might lose her tracker if she rents it out which would obviously put her in a very bad situation. Lots of accidental landlords have been just ignoring this and the banks to my knowledge have not been leaving them alone.
How about this - is it her PDH - she lives in Cork, but I presume renting? Does the bank know where she lives? Rent the house for anything at all - at least have it lived in for the winter. Stop paying the mortgage & every so often throw the bank a few euro. They won’t reposses for years & at that stage she’ll still be in Cork & or back in Longford. She can’t really loose - chances are partial debt fogiveness will occur & the bank will write off some of the debt. Either way she can’t get a mortgage - she has this impossible debt at present on an unrentable & unsaleable property in negative equity. If she defaults on the mortgage, at least she can start saving for a new property in several years time, kids education or whatever her long term goal is, and have a nice rented home in Cork.
It seems clear that there is nothing she can do. I advise against any suggestion that she stop repaying the mortgage. Bad news for her is she ever wants to get a mortgage or any other kind of credit again.
A rough calculation suggests that she has borrowed about €210,000 (as she’s paying out about €1000 pm). If she is approaching the bank for a mortgage today, a 4X income multiplier would be likely. So essentially she’s already ‘used up’ €50,000 of her income. If her income is no higher than €50k, she won’t be able to borrow any more.
However, if her income is significantly higher (e.g. she’s a hospital registrar or an associate solicitor or an engineer in ESB, etc.) she may be able to borrow against the balance at the same 4X multiple. That’s IF she has a perfect track record in repaying the Longford mortgage and doesn’t have ANY other blemishes in her financial affairs. (And I’m asking myself if she paid €200k+ to own an unrentable rental hundreds of miles from her home, what else might she have done that she’s not telling you about… credit card debts? new car every couple of years? expensive shoe habit?)
I know it’s tough, but it’s only through tough love and rigour that debt-addicted Irish borrowers can be weaned back to recovery.
This is enough to make any sane person’s blood boil. Apart from the moral issue, what you’re suggesting is dishonest - does she live in Longford? No.
Why did she buy that house? As an investment? And you consider her as an investor entitled to ‘jump the queue’ by lying. Just give us one good reason why she should benefit from dept forgiveness at all, let alone ahead of genuinely deserving cases.
And you clearly haven’t being reading much of the analysis of this debate - there will be precious few cases where debt on mortgages will be written down and the owners allowed to retain full equity in the house - and quite rightly so.
Why do you think that the prudent few should be fleeced for your friend’s financial stupidity? And believe me, Uncle Joe won’t provide the answer.
Don’t you realise that what you are suggesting would be completely dishonest, unethical, and probably illegal if a debt forgiveness scheme were in place? Or do you just not care? If that’s the kind of cheap trick you think she should pull to avoid paying her debts, I would find it very difficult to have any sympathy for her. You disappoint me.
It’s exactly this kind of attitude that makes debt forgiveness such a bad idea: it would provide a way for people who don’t want to live up to their responsibilities to wriggle out of them - and thus present a moral hazard for people who took excessive risks and lived beyond their means to do so again. Your suggestion demonstrates that somebody who can afford to pay her debts but doesn’t want to would take advantage of the scheme at the expense of taxpayers. Unfortunately a scheme that could help the deserving few would be exploited by the undeserving many. No, better we have nothing to do with debt forgiveness.
Sorry, one person said to emigrate another said to burn the house, so CLEARLY you havent been reading the debate, yet you jump down my throat when I pose an immoral solution?
I think debt forgiveness will 100% be considered if the masses start to default on their loans. Even Morgan Kelly has proposed some degree of debt forgivness and he also predicted mass mortgage default.
Would I term her an investor? Yes she did purchase the property as a means of getting on the “ladder” so that when she was ready to buy in her area she could sell it and buy somewhere else.