We are fast approaching peak holiday season and with School Summer Holidays close by, overseas property investors can expect to cash in on excellent rentals during this period. But are you ready for when the holiday season ends?
It can be easy for your mortgage to become unaffordable when rentals die down after the summer holiday season ends, and you may no longer be able to pay it.
What happens if you don’t pay your foreign mortgage?
If you don’t pay your mortgage overseas it is likely to have the same consequences as if you didn’t pay your mortgage in your home country.
Some with foreign mortgage debt in Europe hope that it will not follow them to the UK or Ireland.
However, this is incorrect, and the foreign lender can legally come after you for outstanding debt.
Consequences if you are in Negative Equity
EU Property Solutions regularly see borrowers with a foreign mortgage greater than the house value stop paying and leave the keys with the lender.
Many of these borrowers do not know that they are in negative equity and are putting themselves in serious jeopardy as the outstanding debt can be aggressively pursued back in their home state.
If you don’t pay your mortgage, arrears will mount on your account and, following a period of greater than three months, your lender can commence repossession proceedings.
Many courts in Europe are inundated with repossession cases so the process may take some time.
Once repossessed your lender will then likely market the property. Many properties sold in possession are purchased at a far reduced value, often around 60% of open market value. This can increase losses for both the Bank and the borrower.
When the Bank sells the property, you will be left liable for any shortfall balance if the property was in negative equity, and this can be collected by lenders in your home country. We have seen instances when lenders have appointed UK Solicitors or Collection Agents and placed a second charge on a borrower’s home. This is something we can assist with.
Where we can help
EU Property Solutions are currently assisting borrowers to find a solution to their Negative Equity burden in the following countries:
- United States of America
- New Zealand
Should you have an issue with an overseas property including lack of rental income leading to mortgage arrears, difficulty in maintaining your mortgage payments, negative equity or property repossession then call EU Property Solutions today on