Author Topic: Hand back the keys? Walk away? Please help  (Read 3075 times)

Enoughisenough

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Hand back the keys? Walk away? Please help
« on: Nov 07, 2012, 07:48:51 AM »

Hi All,I have been looking at the forums for a number of days and thought it was about time I joined up and started to contribute!I live in the North West and need some advice/sense checking. Some of you may think that what I am going to ask is irresponsible and unethical, but please let me know what you would do in my situation....I am in my early thirties, earning an 'ok' salary but i am by no means affluent. In 2006 I purchased a new build, tiny, three bed semi in Manchester. I was given a gifted deposit of 5% from the developer. Very stupidly took out a secured loan at a stupid interest rate and I stopped paying this over two years ago.The secured loan company send the odd letter but are not harassing me or phoning. My mortgage was initially interest only, but i switched to repayment about a year ago. I am in negative equity to the tune of circa £30,000Do I sit tight, keep paying the mortgage in the hope that property prices pick up (don't think this is going to happen any time soon)What about the secured loan? Even if prices do creep up the are going to want their money at some point! (I am investigating a number of issues with the agreement and the legal charge, but not sure what the outcome will be.). Am I just delaying the inevitable?The most drastic option..... My partners credit file is not linked to mine. My partner has been provisionally accepted on a government rent to buy scheme, vastly below market rent for two years with no commitment to buy a house with what is saved. I know unethical.... But is handing the keys backs and not linking myself to the rented property an option? Effectivly I wold go off the radar.My head is in a funny place with the stress of this, I just don't know what to do!Advice please!

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Re: Hand back the keys? Walk away? Please help
« Reply #1 on: Nov 23, 2012, 12:17:36 AM »
Hi, I read your post with interest. Thanks for being so frank about your situation. Unfortunately your case is not unusual, especially for those who bought new build houses prior to the 2007 property crash and now find themselves in a desperate situation with no one to turn to who can offer them a way out, with many deep in debt and having the added burden of negative equity in their property. I can see that this is your exact situation. Of course back in the day credit was very easy to get hold of and unscrupulous developers took advantage of peoples aspirations to get on the property ladder without any regard to what their future ability to cope if prices fell and that's exactly what happened.

I would not want to judge you and understand perfectly your dilemma, but in the circumstance I know your intentions are good and that you are just a victim of the greed and irresponsibility of the system! I agree that sitting tight and hoping things will improve is not the answer as no one knows if the property trough has bottomed out or not. I would need some more information from you to be able to advise you further and maybe you can e-mail this to me I could see if you have any better options available.

For example, I'm assuming that you took out a secured loan against the property to pay for a bigger deposit required and what about your mortgage, how much is that now and how much are you paying at what rate? Do you have any other loans/debts to service i.e. does the loan company have a 2nd charge on the property? Finally I would need to know how much is your property worth now and what price did you buy it for? I'm also interested to know why you switched to a repayment which is obviously costing you more?

If you can give me this information then, although I can't promise you anything, I would be willing to see if I or one of my creative finance colleagues could offer you any alternative solutions. In any case I wish you the best of luck.