I need to advise of some issues we are currently having regarding our property in Spain & our Mortgage payments with Bancaja.
We were in contact with them previously about our financial difficulties in England wherefore we were both made redundant & we were struggling to pay the bank payments for the mortgage.
You were very helpful & between us we agreed to extend the term of the mortgage to decrease the monthly payments until the situation improved or as you suggested we possibly found a tenant to rent the property.
This at the time was a big help & we have managed to find a tenant to take out an 11 month contract to let the property consequently covering our monthly payments.
However, the tenant seems to have left without prior notice & we are chasing payment of over €1000, the payment was due on 03.12.10, we did contact her, but she has been away from Christmas & sent me a text message explaining the payment was late & would be deposited in the next few days.
We have since had a text message to say she isn't coming back & have no forwarding address.
We have become overdrawn recently, only slightly & have managed with the help of family & friends (only just to cover the mortgage) but with our increasing debt in the UK, and the rent increasing on our house in England, plus the money which we have borrowed over the last few months until things improve, as well as this recent situation with our tenant, we now find ourselves in a difficult situation as borrowing this amount of money isn't an option for us.
I am currently in work earning much less than I was earning & my partner has some occasional temporary work, which looks like will becoming to an end soon. In total this amounts a little over half what we were earning when we initially took this apartment on.
Can you please offer us some advice on where we go from here? We have discussed this previously, and agreed to a longer term on the mortgage, but are now faced with another issue and the financial situation is becoming increasing worse, as all the savings including redundancy money has been sent to Bancaja so we have not got this to fall back on.
The house we were renting in England and we can't afford to cover the rent & therefore are looking for somewhere more affordable, but again at the moment this isn't looking promising, we may also be looking for something separately as the increasing stresses are beginning to take there toll but again this comes with extra costs.
Can you advise us of some options available as we are now seriously thinking we will have to let the property go, and not sure even how to do this, I have heard about dación en pago and would appreciate more information. We physically can't afford to continue like this, we have both been prescribed antidepressants and have been advised by our doctors that we really need to raise the matter with our mortgage provider.
At the moment we owe €114k on the mortgage and without a valuation not sure what it’s actually worth now, although would like to think that we are not too far away.
We have had two valuations on the property, one when we took the mortgage in 2006 valued at €167,555k and again earlier this year when we were struggling financially at €129k, I would imagine it has dropped again, but not sure by how much.
Would we be able to default on payments for a while?
Would we be able to decrease the monthly payments by anymore, but without extra costs as we simply do not have anything left?
If we were to return the keys back & try walk away, would they chase us in England if we owe anything if the property is outstanding as we are going to maybe stay with my partners mum for a while if we can persuade her & worried that they will come to her house even though it isn't owned by us. We don't have anything expensive in the UK; the most expensive thing is my partner’s car which has a loan outstanding, but only worth a few thousand if that!!
Another issue we have is we have another property in Spain & are struggling with this mortgage too, these are with different banks & neither know about the other for fear that they can take this property if they find out as payment & what will happen to the other mortgage lender then? At least if we only have the one mortgage then we only need to struggle through paying out half as much, and could scrape through, two are just un-bearably stressful & just un affordale.
We have sent some money to cover this mortgage for December & January, but worried after that what can happen & what we can do, as If we slip into arrears I have heard that the banks won't even offer to help - Is this true?