Homeloan write-off / loan reduction

B

BrokeGuy

Registered User
Messages
62
Hi there,

I have a catalogue of debt problems with the plan that I am dealing with them on a case by case basis. However the main thing I am worried about is my home loan which is at €286k and which I am paying €700 per month towards.

This month I am moving jobs going from private sector to the civil service but suffering with a €700 per month reduction in pay.

The loan is with Bank of Scotland and for us to service that loan term there would have to be some give on the principal but is that even considered? I know you may need to know my other circumstances but there are essentially too long to type!. The key thing is that I have a tracker mortgage and am very happy living where I am (three kids settled there).

Has anyone heard of the Bank cutting the principle for a payment upfront so to make the loan servicable? My brother has floated the idea of giving us a loan which we could use to pay down the mortgage provided the Bank work with us on same, e.g. pay €30k now and they write off €30k too to bring it down to €216k or thereabouts.

Is this pie in the sky talk?
 
BrokeGuy said:
I know you may need to know my other circumstances but there are essentially too long to type!
Click to expand...

Well you've even posts to know that this is most important !

Why would the bank go for this. Involving your brothers money, is that really a good idea.

Please post up all the finances, take the time to do it.

Sounds like you need to extend the mortgage term or maybe a repayment holiday in order to service your other debts.
 
You posted up all the details here In general, you seemed unwilling to address your overspending and expected the banks to sort out your problems for you.

It seems as if you are totally insolvent and should try for a PIA, but BoS will probably veto the PIA unless you introduce some cash from your brother.

Home loan
Lender: Bank of Scotland
Amount outstanding: €286,000
Value of home: €180,000
Interest rate: specify whether tracker or SVR or fixed rate: Tracker so paying very little, 1% over ECB maybe
Monthly repayment : €700 now, reduced repayment
Click to expand...
I see no point in your brother giving you money at this stage, while you are insolvent with all the other properties and mortgages. If he does give you money, it would have to be part of a total PIA.

The only thing which might work for you would be something like the following:

1) Hand back the investment properties and write off the shortfalls.
2) Write off the unsecured debts
3) Switch the home loan to an interest only SVR mortgage equal to the value of the property with €20k from your brother.

But you would need a PIP to put this together for you.

But you will be insolvent again, if you are not prepared to live well within your means.
 
Sorry guys for limited information.

The Reaosnable Living Expenses with AIB is with regard to my fiance's house, it isn't up and running yet but AIB said they will allow RLE plus 20%. Plan here is to sell the house and go on an informal PIA over 6 years for the balance - we will have no surplus in money so they will get very little.

The other loans are with BOS and all we do with them is pay them €1,200 per month off the three loans and this is an ongoing arrangement.

In terms of overspending, as of September our income will be down €1,100 per month net due to the loss of rental surplus on the AIB loan and the change in jobs... if I am overspending I'd like to see how.

Re my proposal to BOS, why would they do it? If I do nothing and they take the houses from me and sell them they will be down more than if they were to give me some foregiveness on the PPR subject to me honouring the remainder of the mortgage of course.

No point in going interest only on a variable rent, may as well rent.
 
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