recent interest rate rises and property value falls (in a specific area) have resulted in the rent collected being much less than the mortgage payments required. I am now struggling to make the payments. I have tried to re-mortgage but no one will take it on as it has fallen invalue and the current lender is offering significantly less based on current rental values. If I stop payments (it is a buy to let mortgage) and allow them to re-possess what will happen ? All ideas and thoughts gratefully recieved..
2007-03-24 00:15:10 · 10 answers · asked by Harryboy 1 in Business & Finance ➔ Renting & Real Estate
The remedies available to the mortgagee are as follows
- to attorn the rental income
- to proceed with foreclosure or exercise their Power of Sale right as stated in the mortgage document
- to recover any shortfall resulting from a deficiency from you.
In order to speed up the process, you can offer to deliver a quit claim deed and hope that the deficiency is minimal.
2007-03-24 00:29:10 · answer #1 · answered by Jack 6 · 0⤊ 0⤋
This is an investment that has gone bad so there is no point in throwing good money after bad money any longer. First, reconcile yourself to this fact and start planning methodically how to extricate yourself from this mess as quickly as possible.
1. If you purchased the "investment property" in your own name rather than that of a corporation, LLC or partnership then letting the mortgage go into default is not a wise thing to do. However, it may be your only alternative if other avenues do not work out.
If you did purchase the property in a company name and you did not provide any personal guarantees then you should let it go into default. It would ruin the credit rating of the company but not your personal credit score.
OTHERWISE:
2. Calculate exactly what your net shortfall is and figure out how long you can "carry" this shortfall out of your other income. Set yourself a time deadline as to how long your are going to do this. Keep making the payments. If you cannot sell the property by the time deadline you set then you should let the mortgage go into default. Your credit score will be shot but its not the end of the world.
3. Put the property up for sale immediately and price it to go. The real estate market is not going to get any better in the near future. You may lose your downpayment and may even have a small remainder on the mortgage left after the sale. At least the payments on this small mortgage balance will be manageable and you will not have the ongoing real estate tax obligations also.
4. Do not procrastinate. Get out from under this thing as quickly as you can. Its a bad investment, accept it, put it behind you as quickly as you can and move on.
Good luck.
2007-03-24 08:01:48 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Dont wreck your credit rating by defaulting on the mortgage. Get the property on the market and do your best to make the mortgage repayments in the meantime. You will just have to hope to get the best price possible for it and repay what you owe. If you leave it to be repossessed, you'll be lucky to even clear the debt as your mortgage lender wont be interested in how much it's sold for - they'll still come after you for the shortfall anyhow.
2007-03-24 13:40:40 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yeah! try to sell! or raise the rents! It happens when the market rises then falls like it has the last year! That sucks! File bankruptcy! That may help:( Defaulting on a mortgage is bad bad bad!
2007-03-24 07:40:39 · answer #4 · answered by love154100 3 · 0⤊ 0⤋
You could still be liable for the deficency in the amount owed and the amount that they pay for it at sheriff's sale. You will have a judgment personally against you and you will have a mark on your credit score. See if they will allow you to give a deed in leiu of foreclosure. This means you give them the house they don't sue you for the rest you owe. This seems to be your best bet
2007-03-24 12:24:31 · answer #5 · answered by Anonymous · 0⤊ 0⤋
defaulting on the mortgage will wreck your credit for about 7 years. Try to sell it before you lose the house to the bank.
2007-03-24 07:20:50 · answer #6 · answered by ? 6 · 0⤊ 0⤋
Hi,Try to sell the property otherwise you will end up with a bad credit rating.Good Luck
2007-03-24 07:30:50 · answer #7 · answered by Ollie 7 · 0⤊ 0⤋
Your credit rating will nosedive.
I'd cut your losses and sell up, that will buy you some time.
2007-03-24 07:28:58 · answer #8 · answered by Anonymous · 0⤊ 0⤋
The same as any body else you will lose it and can end up owing money
2007-03-24 08:39:59 · answer #9 · answered by FRANK W 2 · 0⤊ 0⤋
Just goes on your credit report...as foreclosure. Not good. But not fatal either...
2007-03-24 07:24:20 · answer #10 · answered by Anonymous · 0⤊ 0⤋