Choose paying back Mortgage or Choose Life?

mariano rivera

I wanted an Afterhours view on this as its not just a financial question but a lifestyle question

My story is this:

I built a house back in the boom years

My intention was to sell the house and with the profit have money towards buying my own house

Bank gives me a mortgage for a second house on the back off the house that i have yet to sell

Anyways, boom busts

Now left with two houses in negative equity

Approx. negative equity of 350k

I know, my own fault, my risk etc.

In the last 4 to 5 years, have done deals with the bank

Thankfully, I still have a job, that pays ok

But, I am skint, skint, skint with these payments

No money for anything out of the norm. have to watch every penny.

Unless I live until I am 200 years old, I have no chance of paying back this money

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Don’t care about credit rating or letters form the bank anymore

Just want start living again?

Dravokivich

Don't think handing the keys back is going to change much in regards to how much you owe them.

TOOYOUNGTODIE

you wont have money in your pocket.

your going on a one way ticket to 'instalment order' city. population you!!
They will get an order directly against you wages!!

only way to ''hand back the keys'' and have any chance of a life, is to leave this island.

yourdeadwright

I think you came to the wrong place if your looking for sympathy,
Terrible situation but people will say its your own fault ,

smash

mariano rivera wrote: »

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Yea, you can't do this in Ireland!

Hardonraging

Just do a face full of cocaine, and forget about the mortgage, you're kids/ family members will take on the debt when you die anyway ..

jaykay74

mariano rivera wrote: »

I wanted an Afterhours view on this as its not just a financial question but a lifestyle question

Is leaving Ireland an option ?

mitosis

Negative equity is neither here nor there, and garners no sympathy. You should rent out the extra house and take responsibility for your own failed speculation.

theteal

mariano rivera wrote: »

Unless I live until I am 200 years old, I have no chance of paying back this money

was the original plan to live to 200?

Wacker The Attacker

Lifestyle is dictaed by your responsibilities

ChubbyHubby

Can't you rent out the 2nd house? Rent out the rooms in the one you are staying in? You're not choosing life, just running away from responsibilites.

jamesjoyce1710

negetive equity mean nothing.
the best thing to do is

1)rent the house that will you will cover it mortgage best.
2)Rent rooms in the other house to help with mortgage payments on that

its not rocket science,

mariano rivera

ChubbyHubby wrote: »

Can't you rent out the 2nd house? Rent out the rooms in the one you are staying in? You're not choosing life, just running away from responsibilites.

I don't want to emigrate

I am Irish and want to live in Ireland

Second house is rented out

I have 2 people living with me who pay rent

All the money going to the bank

BTW, i am not looking for sympathy

Lately, I have been thinking that, I have one life to live.

El Guapo!

Rent out both houses and the rent should hopefully cover the mortgages. Meanwhile you move into a smaller rented place that you can afford out of your wages. It might be tough but it can be done.
Failing that, your only option is to do a runner.

jester77

mariano rivera wrote: »

My intention was to sell the house and with the profit have money towards buying my own house

Not having a go at you OP, but too many people believed this. It's like the story of the fool you often hear about who hears about a sure thing in the 15:15 race at Cheltenham and walks into Paddy Power and puts his week wages on it.

Can you not rent one house and co-share in the other?

davet82

i know someone in a similar situtation, they gutted the house sold everything copper piping the lot, stuck the keys in the letter box and got on a plane never to return.

i know they're happy now earning a good living else where in the world but will never be able to come back to Ireland.

either that or continue as is, they're not great options but thats it in a nutshell imo

Ole Rodrigo

Its a tough situation, but doing a runner wont give you the piece of mind you think it will.

bbam

mariano rivera wrote: »

I don't want to emigrate

I am Irish and want to live in Ireland

Second house is rented out

I have 2 people living with me who pay rent

All the money going to the bank

BTW, i am not looking for sympathy

Lately, I have been thinking that, I have one life to live.

mariano rivera wrote: »

I wanted an Afterhours view on this as its not just a financial question but a lifestyle question

My story is this:

I built a house back in the boom years

My intention was to sell the house and with the profit have money towards buying my own house

Bank gives me a mortgage for a second house on the back off the house that i have yet to sell

Anyways, boom busts

Now left with two houses in negative equity

Approx. negative equity of 350k

I know, my own fault, my risk etc.

In the last 4 to 5 years, have done deals with the bank

Thankfully, I still have a job, that pays ok

But, I am skint, skint, skint with these payments

No money for anything out of the norm. have to watch every penny.

Unless I live until I am 200 years old, I have no chance of paying back this money

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Don’t care about credit rating or letters form the bank anymore

Just want start living again?

i appreciate that you are in a position and know plenty in similar positions.. I'd say it all boils down to how much you want to stay in the country..

If you stay you may as well keep with the plans, bargain to kick the can down the road as much as yu can and then stick to the plan.. If jou just jack it in to live a better life then in time the banks will have your case before the courts and they'll be looking for your monjey to be stopped at source. You'll become one of those who planned the default for lifestyle and treated harshly in court.

Or you could post back the keys, clear your accounts and get on a plane.. to my knowledge they can't follow you for the money.. Hell you could rent just across the border and they couldn't touch you (open to correction), you'd still be in ireland. I personally wouldn't judge you on this but many here will, hell we're taking on charges and levi's for everyone under the sun, a bit of mortgage baggage just increases the pressure for some debt forgiveness..

CruelCoin

mariano rivera wrote: »

Unless I live until I am 200 years old, I have no chance of paying back this money

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

You borrowed money, not bricks. Handing the bricks (keys) back won't change the fact you still owe them the money.
The terms of the mortgage were (and always are) repayment in cash. Keys are not usually an accepted form of repayment.

In short, you're buggered, get used to it.

Intensive Care Bear

theteal wrote: »

was the original plan to live to 200?

"My intention was to sell the house and with the profit have money towards buying my own house"

BraziliaNZ

mariano rivera wrote: »

I don't want to emigrate

I am Irish and want to live in Ireland

Second house is rented out

I have 2 people living with me who pay rent

All the money going to the bank

BTW, i am not looking for sympathy

Lately, I have been thinking that, I have one life to live.

I'm Irish but I wouldn't want to live there under your circumstances. No effin way. If I were you I'd move over to sunny England, get away from that mess.

westendgirlie

Hope things work out for you OP

"handing back the keys" means you have no house AND a debt
Just like if I rack up a credit card debt and "hand back the card"
Doesn't change anything

Squiggle

mitosis wrote: »

Negative equity is neither here nor there, and garners no sympathy. You should rent out the extra house and take responsibility for your own failed speculation.

Just like the banks eh? :rolleyes:

kippy

Squiggle wrote: »

Just like the banks eh? :rolleyes:

Would you have shared the profits with us would you have profited from the first house?

You need to get the head down and wait out till this new insolvency bill/Consumer debt bill comes into force.
That might give you a few options.

Pj!

Just think of another scheme to make a puck of money. You can't get it wrong again, can you?

humanji

Are you averse to faking your own death?

The whole I built a house to sell and use the profits to build my own house is one of the most ridiculous things that people do. Why not simply build one house, the house you want to live in and leave it at that. Far too many greedy people thought they could make a killing using the "free money" banks were offering and now they all have the same woe is me story.

If making a profit on the first house was so important then why did you not wait till the house sold before getting another mortgage. It's absolutely ridiculous that you assumed the house would sell. Even without the current global decline there's a chance that you'd still be paying back two mortgages and not be sitting pretty after making a few euro on the first house.

johnwest288

Im in the same boat as you and I would ,Choose Life. Choose a job. Choose a career. Choose a family. Choose a ****ing big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of ****ing fabrics. Choose DIY and wondering who the **** you are on Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing ****ing junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, ****ed up brats you spawned to replace yourselves. Choose your future. Choose life... But why would I want to do a thing like that? I chose not to choose life. I chose somethin' else. And the reasons? There are no reasons. Who needs reasons when you've got heroin?

Squiggle

kippy wrote: »

Would you have shared the profits with us would you have profited from the first house?

You need to get the head down and wait out till this new insolvency bill/Consumer debt bill comes into force.
That might give you a few options.

Thanks for the advice but I'm not the OP or in his situation. If I was I'd voluntarily surrender the properties, establish a COMI in the UK , go bankrupt there and make a fresh start after 12 months debt free. The new legislation in Ireland is a lot of shíte.

Chuck Stone

mitosis wrote: »

take responsibility for your own failed speculation.

If only that could be applied across the board.

Oink

You borrowed a lot of money on a investment that appeared 98% sure to pay off. You were unlucky and lost, but you accepted the risk in the first place. Maybe I would have done the same if I'd had the money.

Being broke happens to a lot of people, but it sounds like you can stand on your own two feet without any hands-out.

Maybe you would be less unhappy if you were to roll with the punches and try and make the best of things as they are now. It will be easier on you than to bang your head against the wall.

My 2c. Best of luck OP.

Menas

It is a bit of a mess OP and I know you did not come here to get abuse.

Of course there are plenty of 'what if' questions and I am sure you have asked yourself them a thousand times.

But you are where you are. My own advice is that you should get legal advice.

There are some legal firms out there who will negotiate on your behalf with the banks for a debt write down or outstanding debt. I heard one on newstalk some time ago but cannot remember the name.
The banks dont want to have that conversation and few have suceeded, but if you really are in trouble then best to get the ball rolling.

PS. You are not a Garda Sergant by any chance?

tipptopper

johnwest288 wrote: »

Im in the same boat as you and I would ,Choose Life. Choose a job. Choose a career. Choose a family. Choose a ****ing big television, choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of ****ing fabrics. Choose DIY and wondering who the **** you are on Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing ****ing junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, ****ed up brats you spawned to replace yourselves. Choose your future. Choose life... But why would I want to do a thing like that? I chose not to choose life. I chose somethin' else. And the reasons? There are no reasons. Who needs reasons when you've got heroin?

In the name a jaysus, what's this?

ash23

In a similar position OP, stuck with a load of negative equity in a house with an ex. We rented it out and both got cheaper rental places.

On the plus side, rental prices are picking up again and so are house prices (veeeerrrrrrry slowly) so it's not all doom and gloom.
Talk to the banks, try to go interest only on one property maybe?

Have you spoken to the bank at all?

the groutch

OP, the property market didnt literally crash overnight.
it's been falling little more than 1% per month, and if the intended profits were as big as suggested you had plenty of time to sell the newly built one
I expect your greedy nature made you wait and wait to see would things recover.
Either that or you tried to sell and just chased the market down

funkhouser

In any sane and functioning society debt like this, which has no chance of being repaid and should never have been lent in the first place, would be written down and the house sold or used by the bank for maximum return.

People who say "tough but you should remain in debt slavery and have no life ever again, you borrowed it so pay it back" (yawn) are extremely ignorant.

Incurring debt is a two way arrangement and a bank's profit is partially a return on the risk they have taken in lending the money. If I lend a car salesman on 45k a year 500,000 euro to build a house and sell it for profit, going against all previous banking norms, I've taken on a lot more risk than I should have. After it goes belly up; property market or car market crashes or he becomes terrible at selling cars and ends up in a job on 30k a year I wouldn't expect anybody to tell me: "tell him it's all HIS fault, he should live in one room, rent out all the other rooms and should give all his money to the bank for the rest of his working life". The law shouldn't. Society shouldn't. Creeps on internet message boards shouldn't. But they mostly do.

Both parties should take a hit. The more risk a bank takes the bigger hit it should take. Yes, we now own the banks and there are loads of extremely greedy people who won't now pay mortgages just 'cos but a general principle "when the borrower is clearly in great difficulty and the lending was reckless the bank should shoulder a lot of the burden, morally and financially" should really start being recognised by everyone. We'll still be in this situation as a country in 20 years if we don't.

People with impossible debt burdens are not criminals of a lower caste and should not be forced into life long debt slavery.

petethebrick

funkhouser wrote: »

In any sane and functioning society debt like this, which has no chance of being repaid and should never have been lent in the first place, would be written down and the house sold or used by the bank for maximum return.

People who say "tough but you should remain in debt slavery and have no life ever again, you borrowed it so pay it back" (yawn) are extremely ignorant.

Incurring debt is a two way arrangement and a bank's profit is partially a return on the risk they have taken in lending the money. If I lend a car salesman on 45k a year 500,000 euro to build a house and sell it for profit, going against all previous banking norms, I've taken on a lot more risk than I should have. After it goes belly up; property market or car market crashes or he becomes terrible at selling cars and ends up in a job on 30k a year I wouldn't expect anybody to tell me: "tell him it's all HIS fault, he should live in one room, rent out all the other rooms and should give all his money to the bank for the rest of his working life". The law shouldn't. Society shouldn't. Creeps on internet message boards shouldn't. But they mostly do.

Both parties should take a hit. The more risk a bank takes the bigger hit it should take. Yes, we now own the banks and there are loads of extremely greedy people who won't now pay mortgages just 'cos but a general principle "when the borrower is clearly in great difficulty and the lending was reckless the bank should shoulder a lot of the burden, morally and financially" should really start being recognised by everyone. We'll still be in this situation as a country in 20 years if we don't.

People with impossible debt burdens are not criminals of a lower caste and should not be forced into life long debt slavery.

Well said.

mariaalice

mariano rivera wrote: »

I wanted an Afterhours view on this as its not just a financial question but a lifestyle question

My story is this:

I built a house back in the boom years

My intention was to sell the house and with the profit have money towards buying my own house

Bank gives me a mortgage for a second house on the back off the house that i have yet to sell

Anyways, boom busts

Now left with two houses in negative equity

Approx. negative equity of 350k

I know, my own fault, my risk etc.

In the last 4 to 5 years, have done deals with the bank

Thankfully, I still have a job, that pays ok

But, I am skint, skint, skint with these payments

No money for anything out of the norm. have to watch every penny.

Unless I live until I am 200 years old, I have no chance of paying back this money

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Don’t care about credit rating or letters form the bank anymore

Just want start living again?

You are very brave to post the above in After Hours

doolox

I am in a similar situation to the OP regarding a rental house. The mortgage and rent are about equal but the tax treatment is brutal.

Basically only 75% of the interest is allowed off the income obtained from the tenants. About 60% of the rental intake is deemed taxable and incurs 21% tax, 4% PRSI and 7% USC. I suppose I am luck that I have a tracker mortgage but the govt is getting at least 30% of any advantage accrued.

On the surface the rent paid SHOULD cover the mortgage payment but I have to stump up the tax and other govt deductions on a sum payable over 20 yrs on a house now only worth half what I paid for it.

Also I found out that if you are forced to move house and rent out your own house to get money to rent near your new job you are not allowed to offset any of the rental you pay on your new location against rent obtained in your old location. In a static housing market where selling at a reasonable price is impossible ( the cost to build ) then moving for a job becomes impossible or too expensive.

The same applies to anyone seeking to rent a smaller place and let their own house to more affluent people.....you are not allowed to offset rent on the smaller place against rent received on the existing "too big" house.

It is also impossible to evade or avoid these taxes as the PRTB has all the data so the taxman will eventaully catch up with potential evaders........

renofan

Thank feck I didn't buy/build and rent instead. Can't imagine what its like to have a massive mortgage(s) and not be able to pay them and the house not worth whats left on the loan. The stress alone would kill ya I'd say.

CianRyan

Sell the second house and hand every penny of that to the bank?
I assume you'll get at least €200k-€250k if it's a decent size in a decent area. That's a good lump of money back to the bank and with a smaller mortgage to pay back you may be able to work out a better deal with them?

Maybe it's a deadly house you'll get more for it, **** knows, worth looking into anyway.

I hope that any policy brought in to help those in negative equity will be first and foremost used to help those who only own one property. anyone who owns more than one house should get a stricter more sever debt deal as while the banks were throwing money around it was the greedy people who thought they could make an easy few euros. I know some will accuse me of being on a high horse but at 27 years of age I have absolutely no debt while I know people my age with close to half a million in debt that they will never pay back.

The op here was greedy, they assumed that taking out two mortgages was a great idea as the first house would sell for a profit. If the op and the thousands like him or her had any cop on they would have sold the first house before starting the second. Really find it hard to have any sympathy for people like that and wish they would stop all this crying about how hard it is. You alone made the decision and should have been aware of all the possibilities and as such planned accordingly.

Kidchameleon

mariano rivera wrote: »

So, I am thinking of handing the keys back to the bank and rent some place and actually have a few bob in my pocket

Well don't rent, thats dead money :rolleyes:

RoverZT

renofan wrote: »

Thank feck I didn't buy/build and rent instead. Can't imagine what its like to have a massive mortgage(s) and not be able to pay them and the house not worth whats left on the loan. The stress alone would kill ya I'd say.

How old are you if you don't mind me asking?

I am 26 and the property boom came a few years too soon for me, in college/ job with low wages.

If I was 36 I could easily have been caught out.

My generation have been very fortunate imo, we have learned from others mistakes.

I am terrified of any loan now, will keep renting for years until I have some kind of capital in place.

RoverZT

RoverZT wrote: »

How old are you if you don't mind me asking?

I am 26 and the property boom came a few years too soon for me, in college/ job with low wages.

If I was 36 I could easily have been caught out.

My generation have been very fortunate imo, we have learned from others mistakes.

I am terrified of any loan now, will keep renting for years until I have some kind of capital in place.

Our generation hasn't been lucky. A lot of 26 year olds have mortgages and massive debts. People I was in secondary school have debts in the amount of half a million. At 21, one lad I know was driving a brand new jeep and every year he'd trade up. At 23 he had a house with a mortgage of 300,000 and was going on three or four foreign holidays a year.

OnTheCounter

Deleted User wrote: »

Our generation hasn't been lucky. A lot of 26 year olds have mortgages and massive debts. People I was in secondary school have debts in the amount of half a million. At 21, one lad I know was driving a brand new jeep and every year he'd trade up. At 23 he had a house with a mortgage of 300,000 and was going on three or four foreign holidays a year.

what was he working at?

Im 27 and less than 5% of the people I went to college with have mortgages. We got lucky with mortgages and unlucky with jobs.

Boombastic

If fairness this decision should have been made before you decided to become a land barron.

UCDVet

I'm not a legal expert - but I'm imagine going to a new country would give you a new start. Technically, it wouldn't wipe out your debt - but go to Canada, US, or Australia or somewhere else that is outside of the EU and across an ocean.

Other countries have more favorable bankruptcy laws and they won't jail you/extradite you for a debt owed in Ireland. I'm not a lawyer - but it sounds like you don't have a lot to lose. I know in the US - bankruptcy wipes out your debts and is removed from your credit history in seven years.

If you could get a job in the US and declare bankruptcy - I'm pretty sure (again, I'm not a lawyer) no court in the US is going to garnish your wages to repay some bank in Ireland. The Irish legal system would recognize your debt - but so what?

I'd talk to a solicitor and compare different countries - then do whatever is best. Sadly, Ireland is rarely a good financial choice these days

Also - since you're leaving anyway - I'd stop paying the mortgage for as long as you can before you leave to save money.

MadsL

OP - what was the worst case scenario you thought of as you signed the 2nd mortgage?

Pottler

TOOYOUNGTODIE wrote: »

you wont have money in your pocket.

your going on a one way ticket to 'instalment order' city. population you!!
They will get an order directly against you wages!!

only way to ''hand back the keys'' and have any chance of a life, is to leave this island.

And do not register anywhere on earth using your own name or any of your details from Ireland. Because if you do, the letters will start coming to your new address and the court actions will start in your new homeland. I know this as a family member works for a Bank and they will go to the ends of the earth after you! How fecked up is that?? The usual way is that you emigrate, apply for a social security number and bang, they have you. The whole "just go live somwhere else" thing is a myth, sadly.:(