# interest only declined



## !RAY (31 Jul 2010)

Hope i am posting this in the right place.
I have a investment property.I had to take out  two mortgages on the property to fund it. Anyway i pay capital and interest on the small mortgage.On the large Mortgage i have interest only which is now up.
The bank (AIB) has sent me out the new repayment which has increased by 650 euro p/m.I wrote to them ,saying that the rent is low and cant afford the repayments can i stay interest only. Got a letter back saying no ,they gave me no reason.Has this happened to anybody and if so how did you get on.I dont know what the hell they what me to do as i cant meet the repayments.My guess is that i have a tracker and they will try to get me to change.
Thanks


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## Brendan Burgess (31 Jul 2010)

Hi Ray

It's not just a question of whether the rent covers the repayment or not. 

It's your total financial position as to whether you can afford to cover the repayments. If the rent doesn't cover the repayments, then you will have to make up the shortfall from your other income.


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## !RAY (31 Jul 2010)

Thank's for your reply Brendan
We have a number of loans out which will finish late next year.We could afford the Whole mortgage if it was not for the loans.All i need is 1.5 more years of I/O.
Eg one of the loans repayment is 600 euro per month.thats the extra mortgage.


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## dmos87 (31 Jul 2010)

Unfortunately as the bank has refused the I/O for longer, your only option at this stage is to try and extend the term of the loans you have. Extending them may free up the income necessary to cover the mortgage.


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## !RAY (1 Aug 2010)

Thanks dmos87
Going to get on to them again.I dont think after 20 years  with the bank it is good enough to just say no and not give a reason.


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## Marietta (1 Aug 2010)

!RAY said:


> Thanks dmos87
> Going to get on to them again.I dont think after 20 years with the bank it is good enough to just say no and not give a reason.


 

Yes, I agree with you but we are now living through strange times


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## Brendan Burgess (1 Aug 2010)

Hi iRay

Their reasoning is clear. You have a commercial agreement to pay off your mortgage and they want you to stick to that agreement. 

The other reason is that they are losing money on the mortgage as it is a tracker and so they want you to pay it off as quickly as possible. 

Can you sell the property and pay off the mortgage?


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## !RAY (1 Aug 2010)

There is not much selling at the mo. 
Marietta we are in strange times .We are not the people who caused the problem,i dont belive in dwelling on who is to blame,we all need to work together and get through this period . Ill get it sorted, the main thing that anoyed me was there responce with no reason given.Some customer service.


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## orka (1 Aug 2010)

!RAY said:


> the main thing that anoyed me was there responce with no reason given.Some customer service.


I think Brendan has given you the most likely reason for refusal - you are on a loss-making tracker and the bank would like to reduce the balance on this as soon as possible.  If it's critical to you to stay interest only for 18 months, you could maybe offer to come off the tracker - doesn't make much sense overall but if it's short-term cashflow that's the issue, this may help you and I'm sure the bank would be happy to consider this.


!RAY said:


> We are not the people who caused the problem


What problem are you referring to?  That the rent hasn't caught up with your mortgage? That the bank want you to keep to the terms of your agreement? Or do you mean the big problem with the economy? Do you really think that people who bought investment properties in the expectation of big capital gain and easy money did not cause at least part of this problem?


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## Rico (2 Aug 2010)

Have you given them a statement of affairs to show you are unable to pay the capital at present. Again its been said many times I find it hard to stomach the lack of flexibility by AIB to accomodate people in these difficult situations. The bank has to be forgiven for there gross mismanagement.They would have been flushed down the toilet had they not been bailed out by the taxpayer. Hopefully they will be in government ownership soon and some mercy will be shown.


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## !RAY (3 Aug 2010)

Thanks for your reply Rico.
Orka to your question of people who bought investment properties been part of the problem i disagree myself and my wife want to have a family and would like to have a basic 4 bed s/d house, the bank would not give us the cash  they suggested an investment then sell and buy a 4 bed s/d .i do not want special treatment just work together and get through this time .


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## Marietta (3 Aug 2010)

!RAY said:


> the bank would not give us the cash they suggested an investment then sell and buy a 4 bed s/d .


 

So they lend you money to buy an investment property and not to purchase a home.    What terrible advise


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## Wishes (10 Aug 2010)

Marietta said:


> So they lend you money to buy an investment property and not to purchase a home.    What terrible advise



Marietta, that is the exact same advise I received when I took out my mortgage a couple of years ago with a different institution.

Rico, I agree with your last post; the sooner the better the Government take control.  My only concern at the moment is between now and December - is the bank going to run every Tom, Dick and Harry to the courts to retrieve unpaid loans?


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## canicemcavoy (10 Aug 2010)

Surely a bank is not going to give an interest-only mortgage in a falling market?


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## Wishes (10 Aug 2010)

Some are and some aren't.  I have heard of banks giving interest only mortgages for periods of three to six months.


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## dereko1969 (10 Aug 2010)

Wishes said:


> Marietta, that is the exact same advise I received when I took out my mortgage a couple of years ago with a different institution.
> 
> Rico, I agree with your last post; the sooner the better the Government take control. My only concern at the moment is between now and December - is the bank going to run every Tom, Dick and Harry to the courts to retrieve unpaid loans?


 
Would there not be a case of mis-selling here similar to the endowment mortgages? Were the risks fully explained?


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## cartman1 (10 Aug 2010)

!RAY said:


> Thank's for your reply Brendan
> We have a number of loans out which will finish late next year.We could afford the Whole mortgage if it was not for the loans.All i need is 1.5 more years of I/O.
> Eg one of the loans repayment is 600 euro per month.thats the extra mortgage.


 
Hi !Ray

Just getting back to the original point on this thread. I am amazed that AIB won't extend the interest only if you only need another 18 months to clear other debts. You could try brazening it out with them and tell them that its all your going to pay them. They would be mad to pursue it legally because a judge will see that you are trying to be reasonable and it would probably take them 18 months to get a hearing at the moment. It would obviously affect your credit rating but then again there's going to be so many people in the same boat, the banks won't be able to hold everyone back in the future if they want to sell them mortgages etc.


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## canicemcavoy (11 Aug 2010)

Wishes said:


> Some are and some aren't. I have heard of banks giving interest only mortgages for periods of three to six months.


 
Do despite being bailed out to the tune of tens of billions, they're still being reckless. Fan-tas-tic.


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## !RAY (15 Sep 2010)

HI
i sent them a break down off all loans and finish dates and told them i would pay the whole amount in 1.5 years. Well i heard nothing from them but the mortgage has come out of my account and i have reverted back to interest only.I have no idea for how long ill have to ring them to find out but at least i am interest only again.I did state to them in my letter that they are obligated to follow the code of conduct set out for banks and they have .
Thanks all for your reply's .


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## saintstephen (27 Sep 2010)

I wonder will AIB just allow the unpaid portion accure on top of the existing mortgage amount, you could be in for a nasty shock when the statement comes in.
I think its still better to contact the bank and get a written agreement


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## Wishes (28 Sep 2010)

dereko1969 said:


> Would there not be a case of mis-selling here similar to the endowment mortgages? Were the risks fully explained?



No, never at any time were the risks explained.


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## Robin Banks (28 Sep 2010)

Wishes said:


> No, never at any time were the risks explained.


 
The risk of being asked to repay the money? 

What risks were not explained to you


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