04 Mar 2009 11:28 AM:
Hi Tony, just joined thread so sorry for late comments.
You have three options
1. Re-negotiate the mortgage to interest only to make things more affordable - if you can
2. Miss three mortgage payments and legal proceeding will be started. The bank will reposes the property. At a later date the property would be sold through an auction and depending on the sum attained would depend on the decision by the bank.
If the auction managed to reach the mortgage value- no problem
If the auction did not manage the mortgage value then it would depend on the amount. The bank will not chase you if it is financially not worth it and your debt would become toxic.
3. Offer to give the property back. The process in Spain is called "DACION EN PAGO" The bank may allow this to happen but it depends on the value to loan equation. If the bank can see a potential profit when they sell the property at auction or in any other way they may consider this to be a way forward. You would lose any investment you have put in to date.
There is a 4th option and that is to carry on and keep the property. Yes things are bad at the moment; yes the scare merchants are out in their droves and having a field day. We humans have very short memories, when the upturn comes (and it will) you may look back and thank god you did not do anything daft.
Hope this helps
Ian
Thread:
If I cant sell - can I walk away without Spainsh bank coming after me in UK?
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