# Refinance



## riverrushes (13 Feb 2017)

Age: 43
Spouse’s/Partner's age: None

Annual gross income from employment or profession: 50,000
Additional 14,000 other income



Type of employment:  Public Servant

In general are you:
(a) spending more than I earn

Rough estimate of value of home 110,000
Amount outstanding on your mortgage: 75,000
*What interest rate are you paying? 4.2 % BOI*

Other borrowings – car loans/personal loans etc 48,000
Do you pay off your full credit card balance each month? No
If not what is the balance on your credit card. 16,000

Savings and investments: Credit union 8,000

Do you have a pension scheme? Yes

Do you own any investment or other property? Yes

Ages of children: None

Life insurance: bank BOI mortgage

*What specific question do you have or what issues are of concern to you?
*
I want to refinance my Borrowings. I want to extend my mortgage (currently has 12 years left) back out to 20 years (where it started in 2009.) I currently pay 690 a month. I originally borrowed 110,000(75,000 remaining). I wish to borrow an additional 40,000 on switching my mortgage from BOI bringing my total mortgage to 115,000 over 20 years. The additional 40,000 will be paid down against the 64,000 other debt I have outstanding. Does anyone know a bank/ lender willing to do this.


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## gnf_ireland (15 Feb 2017)

@riverrushes  The simple answer here is no - this would not be permitted.
No bank is likely to give you a >100% LTV mortgage to allow you clear off other debts. In fact its unlikely any bank would even entertain the mortgage application given the level of other debt that exists. Sorry to be a bit hard here, but I think you know this to be the case already.

From a mortgage point of view, the best thing you can do (in my personal view) is to fix for 3 years on 3.1% with BoI and at least move to a lower interest rate. It is unlikely you will be able to switch mortgage providers before then in any event.

In terms of the other debt, you have 48k of a loan and 16k of a credit card debt. I have no idea what the 48k is for, but I am assuming it is unsecured?
The other thing that is confusing is the fact you have said Yes to "do you own any investment or other property". I don't know how they all hang together and what levels of debt and/or equity you have on those.

If you have equity in the investment or other property, I think you need to seriously consider selling this and paying down the debt, if you are in a position to do so.

If I was you, I would consider how you handle the unsecured debt - you have 64k of what I understand to be unsecured debt. I do think you need to seriously consider alternative options on how you handle this, including going so far as a PIA. I am not best placed to advise on this, but you need to weight it up against the alternatives and timelines against repaying it back. How long would it take you to pay back this back, if you are being honest with yourself. You probably need to consider professional advice here.

You will need to provide more detail here for others to be able to advise, or there is a specific Personal Insolvency forum on here that may be able to assist with additional data.


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## riverrushes (15 Feb 2017)

Thanks for the honest reply. Plenty to consider.


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## Brendan Burgess (16 Feb 2017)

I would just like to reiterate what GNF said 



gnf_ireland said:


> The other thing that is confusing is the fact you have said Yes to "do you own any investment or other property". I don't know how they all hang together and what levels of debt and/or equity you have on those.
> 
> If you have equity in the investment or other property, I think you need to seriously consider selling this and paying down the debt, if you are in a position to do so.



How much is the investment property worth? 
What is the mortgage? 
Which bank and what interest rate? 





riverrushes said:


> Other borrowings – car loans/personal loans etc 48,000
> Do you pay off your full credit card balance each month? No
> If not what is the balance on your credit card. 16,000
> 
> Savings and investments: Credit union 8,000



Why have you savings of €8,000 and borrowings of €64,000? 
Or as gnf has asked, why have you borrowings of €64,000 when you are single and on such a good salary? 

GNF is also right about fixing with BoI. However, I would fix for one year, rather than three. 

Brendan


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## elcato (16 Feb 2017)

A few steps to do straight away. Change the mortgage rate to fixed. Put the 8k of the credit union immediately into the Credit card account. Change your credit card providor if you can and don't use the CC again till it's paid off fully. If you earn 14k additional income then after tax that should be 7k and add the mortgage savings for the year and you are finished with that in a year.


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## Gordon Gekko (16 Feb 2017)

I'm not so sure about using the €8k to repay the credit card debt.

That €8k is a safety net.

By all means hammer away at the expensive credit card debt, but someone in the OP's shoes will not be able to obtain credit in the case of an emergency; that cash provides a lifeline.


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## gnf_ireland (16 Feb 2017)

Brendan Burgess said:


> GNF is also right about fixing with BoI. However, I would fix for one year, rather than three.


It all depends on whether the OP will be able to refinance the loan (unlikely in the short term) and whether fixed rates will drop in the next 12 months.
1 year fixed for existing customer on 60-80% LTV is 3.4%; 3 year is 3.1%. The rate would have to be 2.95% of lower for the second 2 years for the OP to be better off fixing for 1 year than 3. Again, this is a matter of opinion, but 3 year fixing may give them a level of security in the short term



elcato said:


> Put the 8k of the credit union immediately into the Credit card account.


Not sure I agree with this. As @Gordon Gekko says, this is the OP's security blanket in case anything goes wrong and they need money in an emergency. Given current levels of debt, it is unlikely they would be able to borrow money elsewhere for emergencies
Also, it depends on what the OP plans to do with the unsecured debt. If they pursue a debt write down strategy, then paying unsecured debt off before secured debt may not be advisable.They may be better off paying it against the mortgage. Again others closer to this process would be better able to advise here.

But yes, if a debt write down strategy is not possible/practical, then they should consider paying down the most expensive debt first, but keeping some level of cash reserves for emergencies


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## riverrushes (14 Aug 2017)

Ok I've had some positive changes since I first logged in. Mainly I've cleared the credit card debt, gotten older but I am still looking to refinance. I've had a valuation done on my house it is now worth 125,000. I have updated details below. Any assistance would be appreciated. Thanks.


Age: 44
Spouse’s/Partner's age: None

Annual gross income from employment or profession: 50,000
Additional 14,000 other income



Type of employment: Public Servant

In general are you:
(a) spending more than I earn

Rough estimate of value of home 125,000
Amount outstanding on your mortgage: 75,000
*What interest rate are you paying? 4.5% BOI*

Other borrowings – car loans/personal loans etc 48,000
Do you pay off your full credit card balance each month? Yes.
If not what is the balance on your credit card. Balance cleared.

Savings and investments: Credit union 8,000, Bank 5,000.

Do you have a pension scheme? Yes

Do you own any investment or other property? Yes

Ages of children: None

Life insurance: bank BOI mortgage

*What specific question do you have or what issues are of concern to you?*

I want to refinance my Borrowings. I want to extend my mortgage (currently has 11 years left) back out to 20 years (where it started in 2008.) I currently pay 690 a month. I originally borrowed 110,000(75,000 remaining). I wish to borrow an additional 25,000 on switching my mortgage from BOI bringing my total mortgage to 100,000 over 20 years. The additional 25,000 will be paid down against the 48,000 other debt I have outstanding. Does anyone know a bank/ lender willing to do this.


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## Evie1962 (14 Aug 2017)

I'm out of the banking scene a few years now, but I can't see any lender being willing to take on that amount of unsecured debt, 
Well done on getting the credit card sorted. I think you'll just have to plug away at the 48k for the nest while unfortunately.


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## elcato (14 Aug 2017)

Are you able to pay off the loans early or are they for a set time ? If you managed to pay off 16k in 6 months then you need to keep going and you will be rid of the debt in 18 months. If you add the extra 5k savings you will be free of debt in a year. All this depends on whether you are locked into loan deals though.


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## RedOnion (14 Aug 2017)

Is you other income (14k) guaranteed? 

You've said you have investment property. What are the details of that? Is that where the 14k is coming from?

What rates are you paying on personal debt, and what monthly payments? Is the 8k in credit union held as security against Credit union loans?


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## riverrushes (14 Aug 2017)

I'm out of the banking scene a few years now, but I can't see any lender being willing to take on that amount of unsecured debt, 
Well done on getting the credit card sorted. I think you'll just have to plug away at the 48k for the nest while unfortunately.

_The total of my debts 75k + 48k come to 123k. By the standards of some the mortgages being held in the country it is not a huge sum. It is not even 2 and a half times my wages. I just want to streamline my repayments.
_
*Moderator*
New
Are you able to pay off the loans early or are they for a set time ? If you managed to pay off 16k in 6 months then you need to keep going and you will be rid of the debt in 18 months. If you add the extra 5k savings you will be free of debt in a year. All this depends on whether you are locked into loan deals though.
_
The 48K is divided in two 22k to the credit union and 24k in a business venture that did not work out. The 22k to credit union is being re-payed at the rate of 5k (€520 month) a year. I can roll over the 24k year to year. _


*Frequent Poster*

You've said you have investment property. What are the details of that? Is that where the 14k is coming from?

What rates are you paying on personal debt, and what monthly payments? Is the 8k in credit union held as security against Credit union loans?                                Is you other income (14k) guaranteed?


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## riverrushes (14 Aug 2017)

I'm out of the banking scene a few years now, but I can't see any lender being willing to take on that amount of unsecured debt, 
Well done on getting the credit card sorted. I think you'll just have to plug away at the 48k for the nest while unfortunately.

_The total of my debts 75k + 48k come to 123k. By the standards of some the mortgages being held in the country it is not a huge sum. It is not even 2 and a half times my wages. I just want to streamline my repayments. I have never defaulted on any of my loans. Just frustrated dealing with this. Thanks for replying.
_
*Moderator*
New
Are you able to pay off the loans early or are they for a set time ? If you managed to pay off 16k in 6 months then you need to keep going and you will be rid of the debt in 18 months. If you add the extra 5k savings you will be free of debt in a year. All this depends on whether you are locked into loan deals though.
_
The 48K is divided in two 22k to the credit union and 24k in a business venture that did not work out. The 22k to credit union is being re-payed at the rate of 5k (€520 month) a year. I can roll over the 24k year to year. _


*Frequent Poster*

You've said you have investment property. What are the details of that? Is that where the 14k is coming from?

What rates are you paying on personal debt, and what monthly payments? Is the 8k in credit union held as security against Credit union loans?                                Is you other income (14k) guaranteed? 

_    The 14K is coming from investment property/business venture that did not work out and is gauranteed. I am paying 8% on my personnal loans. The 8k is security               for the credit union. 

THANKS FOR ALL THE REPLIES._


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## RedOnion (15 Aug 2017)

The only lender I know of who consider equity release as part of a refinance is Pepper. The rates rise quickly for higher LTVs. Others consider funds for home improvement but not repaying personal debt.

Paying personal debt over 20 years is never a good idea, so I'd suggest you don't go down that road unless you've no other choice.

You've done well to clear the credit card and build up some savings, so you're heading in the right direction.

My advice would be:
1. Fix your mortgage rate. There's no point paying 4.5% when you could fix for 3%. BoI might consider extending the term for you. Just ask them.

2. Use you CU shares to offset against the loan. CU loans are expensive - this is effectively costing you 12.5% because you're paying interest on 22k although you've only net borrowing of 14k when your shares are counted. As a minimum ask the CU to offset shares against loan to the extent they can (usually 4:1). You should be able to reduce the loan to less than 19k immediately. This should give you breathing space.

3. You haven't said much about the business loan / investment, so all I can say is make sure you've the right tax treatment for this.


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