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Need to move

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  • 06-01-2016 5:44pm
    #1
    gerrycollins
    Registered Users Posts: 1,799 ✭✭✭


    I need to move house for a job.

    I own a property in negative equity which I have assessed by an estate agent which will return approximately two thirds the remaining mortgage outstanding.

    I have checked with the bank about a "moving" mortgage however it's similar to reapplying for a full mortgage and I don't qualify based on current income and family. The value of the mover mortgage does not exceed the original value of my mortgage.

    It's not worth renting out as the local market has no value in it and I would lose 2 months minimum in fees and tax etc. I have a tracker mortgage however local prices over a year means it will cost me to rent it out.

    Where I intend to move to have a rental value similar to my mortgage so I'm no worse off.

    Ideas,

    Sell it for what we can, pay off what we can and tell the bank to go jump for the rest.
    Pro... No mortgage.
    Can pay my rent in new location

    Con.....no mortgage for the rest of my life
    Possible court and such for the remaining mortgage value don't know where that will go.

    Swap properties within the bank(dreaming I know) take over a repossesed property in the area I wish to move to and let the bank classify my current property.

    Pro.....my mortgage still remains nobody is any worse off.

    Cons....conditions of the repossesed property


    Has anyone ideas that they have heard that have worked please going out of my mind


Comments

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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Gerry- first off-

    If you rent out your current house- you pay tax on it at your marginal rate of tax- less any allowable costs (notably 75% of the mortgage interest).

    Your suggesting if you rent somewhere else- the rental value will be similar to the rent you'd achieve for your own- so you'd be no worse off........Wrong- I'm sorry. You can't offset rental income from one property against rental of another property.

    The bank will not allow you to sell unless you come to an arrangement with them over how you are going to manage the negative equity. This could be by means of an unsecured term loan- however, note- the interest rate on unsecured loans is currently between 10 and 13% (AIB and BOI).

    Would you be in a position to pay down a personal loan for the balance between what the house might achieve and the mortgage deficit, over time?

    Swap properties- nope. You own the current property- not the bank. The bank have a lien on the property. If you tried this- you'd have two separate sets of stamp duty- alongside a myriad of legal fees to pay.

    In all honesty- were I in your position- I'd organise a meeting with the local mortgage advisor in the branch in which my mortgage is situated. I'd lay my cards out- and advise the advisor that I intended to take the job. I'd offer to sell the property- and convert the deficit into a personal loan- providing they were willing to play ball- the alternate being the mortgage would become a delinquint mortgage.

    I'd request they consider the position and revert within a set timeframe (give them 5-6 weeks- there are monthly credit meetings in branches- it would have to be discussed).

    It is something you can work through.


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