TheClarkeFamily Posted January 11, 2012 Share Posted January 11, 2012 Today started off really good with our agents calling to say first batch of paperwork for visa ready to go to Australia, so exciting but my nerves are dreadful at same time! Then the bad news followed - mortgage company finally gave us an answer on our current situation and now we are left in limbo, no idea what to do. Here are some facts - 1. The current crappy UK market values our house at £112-114k at best! (We paid £122k just a few years ago so this shoves us well in to negative equity). Initially they agreed to waive the £4500 early repayment charge if we sold before 2014 when due to remortgage, they have now gone back on this meaning that we are expected to pay the repayment fee plus any shorfall (estimated at at least £8-10k) at the time of selling or they will refuse the sale full stop! We cant afford to pay that amount of money in one go as it would take all our savings leaving us with nothing to move with. We tried negotiating to make a payment plan monthly for the shortfall and the fee but they refused totally and seems no room for negotiation. The most devestating part is we have already spent at least £10k on it over the last 3 years and its added no value at all because of the market - may as well have just set fire to £10k!!!! 2. To rent this house out means spending at least £3-4k on it to get it landlord approved etc and it will only bring us a maximum of £500 per month. The mortgage is £675 a month so even if we were in a position to rent, we would have another type of shortfall to pay to cover costs etc. Has anyone else been in a similar or same scenario and what did you do?? I am not willing to give up on the dream of moving to Australia and am not happy to postpone our visa application as the guidelines keep changing so much each year that one year the goal posts wont just have moved, they will have closed!!!! Plus there is no guarantee that this house will have improved in value if we wait another year, two years, 5 years.......... I just feel so deflated having had such good news this morning. It feels like one step forward, ten steps backwards!! Do we give up on the dream, stay in a house thats worth nothing and eats every penny we earn just to keep it going and be miserable knowing we will regret this? Do we hang on and start application again in years to come hoping goal posts are still flexible but not knowing if house price will improve? Do we try and negotiate with mortgage company even though they have flatly refused any flexibility or compassion? I wish we had never gotten the mortgage full stop as it seems the only thing flattening our dream!!!:frown: Link to comment Share on other sites More sharing options...
MARYROSE02 Posted January 11, 2012 Share Posted January 11, 2012 Are you sure the house is not rentable as it is now? I was worried about the kitchen and bathroom in my house but the estate agent was sanguine - maybe take a lower rent, I can't remember now and it's been rented out OK. The tenants even made their own improvements which I'm quite happy with. Get some agents to inspect it and see it it's OK to rent as is? It depends what the rental market is too. If people need a home, they might rent it? You'll be able to claim some of your costs on your UK tax return once it's rented out - the agent's fees & repairs, not sure about relief on the mortgage repayments. Once you are out here, you might be able to pay the balance of the mortgage from here? Link to comment Share on other sites More sharing options...
TheClarkeFamily Posted January 11, 2012 Author Share Posted January 11, 2012 Are you sure the house is not rentable as it is now? I was worried about the kitchen and bathroom in my house but the estate agent was sanguine - maybe take a lower rent, I can't remember now and it's been rented out OK. The tenants even made their own improvements which I'm quite happy with. Get some agents to inspect it and see it it's OK to rent as is? It depends what the rental market is too. If people need a home, they might rent it? You'll be able to claim some of your costs on your UK tax return once it's rented out - the agent's fees & repairs, not sure about relief on the mortgage repayments. Once you are out here, you might be able to pay the balance of the mortgage from here? Thanks for that. Basically the house failed its survey we had and must be rewired from top to bottom to be allowed to rent it out. The kitchen is liveable but the floor needs levelling and the windows replacing. The mortgage company will allow us to rent it out as long as we dont mind a £4500 "fee" to change the mortgage to buy to let and that has to be paid upfront! The cheapest agent we foound to manage the rental also wants 10% in fees! Either way we are losing money on a house that couls take many years to regain its value if it even does. I regret taking the mortgage out but at the time we thought we were doing the right thing, that it was an investment in the future. Sadly the recession has other ideas in mind Link to comment Share on other sites More sharing options...
Ken Posted January 11, 2012 Share Posted January 11, 2012 If the house is worth less than the mortgage post the bank the keys and head off to australia and forget about it. The mortgage company may threaten to sue you for the difference but if you don't have any assets in the UK there's nothing they can do. Link to comment Share on other sites More sharing options...
stinka Posted January 11, 2012 Share Posted January 11, 2012 we got our visas 2 years ago and the house has been up for sale for 2 years......4 offers made all 4 fell through for various different reasons beyond fed up now, house is up for well below 'value' although we understand that houses are only worth what people are prepared to pay for it......yet another viewer tonight but feeling very despondant and very low. both our children are due to leave their respective schools this year (1 in year 6 the other in year 11) so if the house does go before July we will be splitting the family up until the summer as oh will go ahead of us. don't know what to do anymore :'( Link to comment Share on other sites More sharing options...
TheClarkeFamily Posted January 11, 2012 Author Share Posted January 11, 2012 If the house is worth less than the mortgage post the bank the keys and head off to australia and forget about it. The mortgage company may threaten to sue you for the difference but if you don't have any assets in the UK there's nothing they can do. lol believe me the thought crossed my mind a few times but cant they chase us in Australia if we just "upped and left"?? I dont want that hanging over us as we try and make a life for ourselves out there. We have no assets at all other than this house. The mortgage company I would assume aim to make us bankrupt if we handed the keys back. The house was on the market last year and not one single viewing even at its disgusting price we had to put it on for. Link to comment Share on other sites More sharing options...
TheClarkeFamily Posted January 11, 2012 Author Share Posted January 11, 2012 we got our visas 2 years ago and the house has been up for sale for 2 years......4 offers made all 4 fell through for various different reasons beyond fed up now, house is up for well below 'value' although we understand that houses are only worth what people are prepared to pay for it......yet another viewer tonight but feeling very despondant and very low. both our children are due to leave their respective schools this year (1 in year 6 the other in year 11) so if the house does go before July we will be splitting the family up until the summer as oh will go ahead of us. don't know what to do anymore :'( Horrible isnt it! So many people in the same position. :sad: Link to comment Share on other sites More sharing options...
Si T Posted January 11, 2012 Share Posted January 11, 2012 lol believe me the thought crossed my mind a few times but cant they chase us in Australia if we just "upped and left"?? I dont want that hanging over us as we try and make a life for ourselves out there. We have no assets at all other than this house. The mortgage company I would assume aim to make us bankrupt if we handed the keys back. The house was on the market last year and not one single viewing even at its disgusting price we had to put it on for. Have a look for a thread called Sell It, Rent It, Leave It I staretd a few weeks ago and have a look at the discussion on there. I am in exactly the same position but have bascially told my lender that if they are not willing to work with me then they can have the keys when I go. Si Link to comment Share on other sites More sharing options...
TheClarkeFamily Posted January 11, 2012 Author Share Posted January 11, 2012 Have a look for a thread called Sell It, Rent It, Leave It I staretd a few weeks ago and have a look at the discussion on there. I am in exactly the same position but have bascially told my lender that if they are not willing to work with me then they can have the keys when I go. Si Thanks for that and all the best for your move x Link to comment Share on other sites More sharing options...
Ken Posted January 11, 2012 Share Posted January 11, 2012 Actually your bank would probably try to avoid making you bankrupt in the hope that you come into some money in the future (e.g. if you return from Australia within the next 6 years with some money). Once you're bankrupt they know they won't get anymore. A UK bankruptcy won't affect you in Australia (not even your credit score). Link to comment Share on other sites More sharing options...
Si T Posted January 11, 2012 Share Posted January 11, 2012 Actually your bank would probably try to avoid making you bankrupt in the hope that you come into some money in the future (e.g. if you return from Australia within the next 6 years with some money). Once you're bankrupt they know they won't get anymore. A UK bankruptcy won't affect you in Australia (not even your credit score). Also bear in mind that if they did make you bankrupt you would only be bankrupt for a year and on the sixth anniverary of your bankruptcy it would be expunged from your credit. I am in no way advocating any course of action but I have always felt that there is a fear of bankruptcy without people understanding the full process. On the flip side if you were made bankrupt and came back within the six years then you would pay a much higher interest rate for any mortgage you were able to obtain and would struggle to obtain any other credit. Link to comment Share on other sites More sharing options...
Ken Posted January 11, 2012 Share Posted January 11, 2012 Something else you should be aware of. If you took out a high loan to value mortgage you'll almost certainly have been charged an insurance premium at the time you took out the loan for doing this. If your bank tells you that you can just hand back the keys then they will invalidate the insurance, consequently they will never tell you that you can do that. If however you do hand back the keys then your bank can claim on that insurance. Link to comment Share on other sites More sharing options...
Rachael R Posted January 11, 2012 Share Posted January 11, 2012 I know how you feel. We have our visas and we just cannot sell the house. We are going over in March to validate the visas and it money we really did not want to spend. Nothing is renting out at the min, its just all seemed to have come to a stop. Its all very stressful on us and the kids. Heres hoping something changes soon.:wink: Link to comment Share on other sites More sharing options...
Guest kianobeano Posted January 11, 2012 Share Posted January 11, 2012 If the house is worth less than the mortgage post the bank the keys and head off to australia and forget about it. The mortgage company may threaten to sue you for the difference but if you don't have any assets in the UK there's nothing they can do. Such a taboo subject ..... would love to hear if anyone has actually done this (even annonymous) Link to comment Share on other sites More sharing options...
TheClarkeFamily Posted January 11, 2012 Author Share Posted January 11, 2012 Such a taboo subject ..... would love to hear if anyone has actually done this (even annonymous) Me too, I bet people have had no option but to do this. We are currently arguing the toss with the mortgage company but as we have said to them - either way whether they help us or not, we are going! x Link to comment Share on other sites More sharing options...
Mr Fabricator Posted January 11, 2012 Share Posted January 11, 2012 I see that you have 3 options , get a loan for the work to be done and then rent the house , Hope for a mirical that the house market picks up , u find a buyer and you settle your debts home and dry hand the keys over . I personally have a pretty strong moral compass and its been to my detrimant many times , but i can sleep at night so thats the main thing , However im comming to realise that with houses , house prices and the insain mortgage's that banks lent people ( thus fueling house prices to sore) i would still manage to sleep at night after not handing but throwing the keys at them and jumping on the plane to oz . I see more and more that its every man for himself now , its survival at the moment and instinct is kicking in , Look after yourself , no one will be hurt other than a bankers rediculous bonus !! I realy dont want to advocate it but BAIL , FLY and never look back ... lee Link to comment Share on other sites More sharing options...
Mr Fabricator Posted January 11, 2012 Share Posted January 11, 2012 Friend of mine , youngish ( 24) fell in love , got married , wanted a family . did everything properly , moved the missus into his parents so he could save , worked every hour over time at work , bar job at night and was doing weekend work , never ever went out , his life was his wife and they wanted to start a family, work work work work , save save save save . 3 years later he ( god knows how ) saved 18K , 12K as deopsit , the rest for fee's and modest furnishings , they moved in , started the family immediatly , baby came bang on 9 months later .......... all over time at work gone, then down to a 30 hour week ,,,,,,,,,,,, no additional work in the local pubs cos trade was down .............. struggling , then he was made redundant , house reposessed .......... simple and ruthless as that , The poor guy was a bloody saint , and did his best , more than his best and for what , ????????????????????? sweet F A ............... 3 years out of his life gone , and 20K why bother being right with the world when it wont do right by you . theirs only so much people can / should take .. lee Link to comment Share on other sites More sharing options...
jamesnparry Posted January 11, 2012 Share Posted January 11, 2012 Thanks for that. Basically the house failed its survey we had and must be rewired from top to bottom to be allowed to rent it out. The kitchen is liveable but the floor needs levelling and the windows replacing. The mortgage company will allow us to rent it out as long as we dont mind a £4500 "fee" to change the mortgage to buy to let and that has to be paid upfront! The cheapest agent we foound to manage the rental also wants 10% in fees! Either way we are losing money on a house that couls take many years to regain its value if it even does. I regret taking the mortgage out but at the time we thought we were doing the right thing, that it was an investment in the future. Sadly the recession has other ideas in mind personally i agree with others, bankers have and are hurting too many families.....if you got the opportunity of a new live in auz....as fabricator says BAIL-FLY-and don't look back.....stop paying the mortgage now, as it means nothing to keep paying it, and put it in the auz fund to pay the deposit and few months rent when you land...the mortgage company will sell it off for peanuts, and ask you to pay the difference...if bankrupt it has no bearing if your 3k in debt or 300k..... remember you have tried to be honourable and worked hard, but health, family and well being is important......don't have any regrets with bricks and mortar.... put it this way...you might land in auz, and the next day win the lotto there....would you send your old mortgage compaany in the uk money to pay off that debt, or buy something you've dreamt of in auz.....BAIL-FLY-LOOK FORWARD Link to comment Share on other sites More sharing options...
paisleylass Posted January 11, 2012 Share Posted January 11, 2012 I wish we had never gotten the mortgage full stop as it seems the only thing flattening our dream!!!:frown: Amen to that. If only we'd been able to see what was coming eh?! Your situation is a bit different from ours, but we are now in Australia with a tenant in the house as of November, and with one thing and another (fees etc) there is just no rent coming in - we *might* get some money next month but still falling well short of the mortgage payments! I had planned to send all my earnings back as we can live on hubby's earnings, and overpay the mortgage to save on interest at least, but am struggling to get even casual work - I haven't worked a day in over 3 months. I do feel we'd be enjoying our time here much more if it wasn't for that heap of bricks back in Scotland haunting us, and it means the hassle of tax returns too. Sounds like 'leave it' is the best option for you, but with hindsight bet there are a good few of us wish we'd just rented not bought! The dream of owning a home has gone sour for so many. Good luck! Link to comment Share on other sites More sharing options...
gpo1971 Posted January 11, 2012 Share Posted January 11, 2012 Such a taboo subject ..... would love to hear if anyone has actually done this (even annonymous) I know 3 families who've done it, their UK houses wouldn't sell and, if they did, would leave them with massive negative equity. Booked a container, shipped their stuff, withdrew their UK savings, cancelled their facebook accounts and had it away on their toes. None have ever had any comeback from it, doubt they will. Bigger problem would be if Oz didn't work out and they wanted to return to the UK. They'd then get 'found', be saddled with the debt and costs and not be able to get a new mortgage or any credit. But that probably won't happen. Not sure I'd do it, but I wouldn't blame anyone who did. Link to comment Share on other sites More sharing options...
Guest Posted January 11, 2012 Share Posted January 11, 2012 This is an interesting thread, and it's reassuring to know that so many people are having problems trying to dispose of the UK houses too. We were trying to sell with no avail, out estate agent said it would rent in to weeks......we had flights booked, so moved it to rental. four months later it's empty and now we are here....the money aspect is cripplig us Link to comment Share on other sites More sharing options...
MARYROSE02 Posted January 11, 2012 Share Posted January 11, 2012 Maybe get some professional advice about your options? Ten per cent is about right for an estate agent and if they are a good one they will take all the hassle out of managing it when you are on the other side of the world. You might save a bit doing it yourself but it's a right hassle when something goes wrong. The agent looks after all the repairs, collecting rents, evictions, etc. Maybe some of those costs will be tax deductable if your home becomes a 'buy to let' investment? My estate agent collects my rent, contacts me for OK if any repairs need doing, then arranges it, and pays my rent into my bank account. You could come out to OZ, stay for a while, then find you want to go back to live in the UK and be glad you've still got the place and each time you buy and sell means more fees. You could always write to one of the newspapers and see if they will 'solve' your financial question for you. Most of them do those kind of articles don't they? Link to comment Share on other sites More sharing options...
Guest GeorgeD Posted January 12, 2012 Share Posted January 12, 2012 Look after yourself , no one will be hurt other than a bankers rediculous bonus !! I realy dont want to advocate it but BAIL , FLY and never look back ... But that's not really true is it? Has anyone ever owned shares in a Bank? Has anyone ever had a pension which owned shares in a Bank? My Dad has a handful of Halifax shares from when they became a Bank many moons ago...people defaulting on their mortgages means my Dad's dividends and the value of his shares goes down. He's a pensioner. There are millions of others like him in the UK. I have family who want to get a mortgage and not move abroad. The more people default, the higher the fees for them and the harder it is for them to even get a mortgage. Defaulting on home loans does have an effect on other people. It's not a crime by any manner of means, people find themselves in situations where they can't pay despite their best efforts, like the big factory in town shuts down and all work dries up...but that's not the OP's situation...take the whole migration factor out of it...would you be handing the keys back if you weren't moving abroad? It's not the fact you are in negative equity per se which is the issue here, or that you can't afford to pay your repayments in your current situation, it's that you want to move abroad. Maybe it's just not the right time for you to move? It might be hard to say when is the right time, just that it's not now. It's fine to say, go and don't look back...but Australia really isn't a paradise with money growing on trees and employers queuing up to employ you...what if you go and can't find work? Outside of the mining sector, companies are going bust. The property market is also on a rollercoaster here. What if you don't like it? It isn't for everyone. Loads of people end up moving back, and what sort of life would you have if you landed back in Blighty, not a penny to your name, with a mountain of debt and a hopeless credit rating? The OP is right, there is no guarantee the value of the house will ever increase. That's not their mortgage provider's fault. There's also no guarantee a move to Australia will work out. personally i agree with others, bankers have and are hurting too many families. Yes, those nasty bankers loaned you money so you could buy the home of your dreams. They loaned you money to buy a car so you could get to work and get out to see the country. They loaned you money so you could go a holiday to the Med. They had the audacity to pay you interest on your savings just for putting your money in their pockets for a while. Right evil bunch every single one of them. You would be much better off stuffing used fivers under the mattress and saving up a hundred and twenty grand to buy a house with cash so you don’t have to taint yourself with their blood money. Or is it just possible that the bank loaned the OP enough money to buy something they wanted to buy, and they have enough money to pay the repayments…as long as they don’t emigrate? Not really the banker’s fault that the OP wants to move to the other side of the world and that doesn’t happen for free is it? This poster also suggested you stop paying your mortgage immediately as you plan on handing back the keys and put all the cash into the Oz fund. Actually, you might as well be hung for a sheep as a lamb, eh? Why not stop paying the Council Tax too…it’ll be no use to you once you’re in Oz…OK, so it pays for the community, education, sanitation, etc, but what have that evil Council actually done for you personally?? Stop paying them. And don’t get me started about those utility companies. Stop paying them too…that’s a fortune you could be saving right now. Do you owe any money to family members? Great news, you’re going to be out of sight soon and you’ll have a new phone number, stuff them too, you’re not coming back. Still all good with this or do you think it’s a bit too far…and if it is, why is it all good just because it is a Bank you’re doing it to? Incidentally, it might not be a bank…it might be a Building Society, owned by its members. To the OP Do we give up on the dream, stay in a house thats worth nothing and eats every penny we earn just to keep it going and be miserable knowing we will regret this? Do we hang on and start application again in years to come hoping goal posts are still flexible but not knowing if house price will improve? Do we try and negotiate with mortgage company even though they have flatly refused any flexibility or compassion? You don’t need to give up on the dream…it might not be the right time for you. You could be creating a nightmare for you to return to if things don’t work out. The house does have a value…it just happens to be less than you owe on it. That makes moving house difficult, (overseas is probably easier because the debt would follow you if you only wanted to moved across town!), but it still has a value. The house price could go up or down, no-one know for certain. History suggests that over a longer period of time house prices increase, so if you sit tight and can cover your bills then the value of your house should increase. At the same time your debt is decreasing, so the situation can get better over time. How long will it take? Who knows, there are no guarantees. The same goes for whether life will be better or worse for you in Oz…no-one really knows. Leaving a trail of destruction behind you isn’t something I’d recommend. I think you have two options…the first is to delay emigrating, it’s not a good time for you, wait until there is a more positive situation at home. The second is to negotiate, and this is possibly the preferred option…also speak to an Independent Financial Advisor to make sure you know all the options, they may even have more flexible contacts within your own lender. Link to comment Share on other sites More sharing options...
bensdad Posted January 12, 2012 Share Posted January 12, 2012 If I was in your position I'd get my visa and give the keys back what's the point of paying for nothing you may as well rent! Cut your losses and get to oz. there is no reciprocal agreement with banks either so the bank cannot do diddly about it. I was fortunate my lender played ball but some like yours are not interested. What have you got to lose? Loving Fremantle! Link to comment Share on other sites More sharing options...
Guest guest57545 Posted January 12, 2012 Share Posted January 12, 2012 If the house is worth less than the mortgage post the bank the keys and head off to australia and forget about it. The mortgage company may threaten to sue you for the difference but if you don't have any assets in the UK there's nothing they can do. I think a couple of other posters have mentioned this but there is a chance things wont work out here! You need some form of rental history to get a place here in oz, i didn't so used the fact i owned my own home as evidence i can make payments. Having you home repossessed effectively means the UK is off limits for quite a while. Could you send some money home from here to make up the shortfall? the exchange rate is amazing going back to pounds. Link to comment Share on other sites More sharing options...
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