Q We are splitting up and have to sell our apartment. It has been on the market for eight months with no interest. The estate agent says we must drop our price if we are to have any chance of selling but if we drop to the price he suggests we won’t cover the mortgage (shortfall of €20,000). Do lenders really come after people for this small amount? This has to be happening to other people so what do they do in this stalemate?
A The first thing is that while the agent has suggested a new asking price, that doesn’t in any way guarantee a sale or that you will even get that amount – so your shortfall could be greater than €20,000. At a new lower valuation, might one of you be able to buy the other out? Could you rent it out? What’s been happening in the eight months that your place has been for sale? Are you both still living there? Could one of you stay and get a tenant in to part-pay the mortgage? Or might it be time for you to cut your ties with this property and your ex and be prepared to sell at a lower price and take out a loan (or eat into your savings) and pay off the outstanding mortgage amount. And yes, if you don’t pay back a mortgage in full you can expect the lender to come looking for the outstanding balance no matter how relatively small it is. Not paying it will, at the least, ruin your credit rating for seven years, which could stop you moving on with your life in all sorts of ways.
The Irish Times
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