# May be about to go into arrears on family home; two BTLs



## meath man (28 Oct 2022)

Brendan, taking your earlier advice I've attached the money makeover information here:

*Personal details*
Age: 55
Spouse’s/Partner's age: 49

Number and age of children: 2 children – both 18 years of age (both going to college in 2023)

*Income and expenditure*
Annual gross income from employment or profession: *€170,000 (self-employed family business)*
Annual gross income of spouse: *included on above figure*

Monthly take-home pay about: *€8,500*

Type of employment: e.g. Civil Servant, self-employed:* self employed*

In general are you:
(a) spending more than you earn, or *Yes*
(b) saving? *nothing


Summary of Assets and Liabilities*
Family home worth *€900K with an €850K *mortgage
Pension fund: *€200K*
2x Buy to Let Properties worth *€750K* with mortgages of *€645k


Family home mortgage information*
Lender: Pepper
Interest rate ECB+2%

Value: €900K

Mortgage: €850K

(No need to tell us the monthly repayments or what term is left)

*Other borrowings – car loans/personal loans etc N/A*
Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? Circa €5k rolling

Car loan: €480 per month 

*Buy to let properties

Property 1*

Value: €550k
Rental income per year: €22K
Rough annual expenses other than mortgage interest: €5K

Lender: Start Mortgages
Interest rate ECB +1%

Outstanding balance: €475K

Paying interest plus a tiny part of capital on this mortgage

If we were to sell this property at €550K today we would receive a net of €25K after paying the mortgage, costs of sale and CGT

*Property 2*
Value: €200k
Rental income per year: €10K
Rough annual expenses other than mortgage interest: €3K

Lender: Pepper
Interest rate ECB +1.25%

Outstanding balance: €175K

Paying interest plus part capital on this mortgage (paying €650 per month)

Notice given to tenant of this property, notice expires in June 2023. Potentially sell this property at that time. We need to sell for €205K to be able to pay off the mortgage and costs of sale and CGT.

*Other savings and investments:*

Do you have a pension scheme? Company that runs the family business is pay €1K per month into a pension
Savings = €45K (needed in case of emergency/illness as we both work in the family business and we need a cushion if one of us becomes ill)
Do you own any investment or other property? Yes please see above

*Other information which might be relevant*

Life insurance: €800K cover on oldest spouse, €500K cover on younger spouse, both terminating in 5 years time

One holiday per year.

No frivolous expenditure. Live like hermits. We simply don’t have the spare cash. We are the classic example of what people would outwardly see as ‘successful’ but we have a debt level that’s not sustainable.


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

We’ve always known that the only way we will pay off the home mortgage will be to sell the house and trade down. We plan to do this in 5/6 years time when our children are hopefully self-funding and with a bit of luck the value of the home has increased sufficiently to give us some equity.

Now however with the increases in interest rates, our outgoings exceed our income and it will probably be like that for the next couple of years. We’ve done up an SFS for ourselves and it’s very clear to see.

Effectively the combination of the low interest rate environment in the last 8/10 years and paying interest-only on rental property #1 (rental income = €1,850, mortgage = €650, meant €1,200 ‘spare’ cash that effectively went towards paying our home mortgage) saved us.

We are self-employed in a labour intensive business and whilst we have a good income relative to lots of people we cannot continue to sustain that level of income as we get older so unlike most people we envisage our income reducing rather than increasing.

We are paying over 50% of our income on bank borrowings and it’s increasing. 
In addition we’re paying interest and part capital on both BTL properties and we know it’s just a matter of time before they come knocking and looking for our plan.

What I’m wondering is this – has anyone had any experience of dealing with Pepper whereby they have a grown up conversation with them with a view to doing some deal that looks at the long term and not just the short term?

One thing were thinking about is whether Pepper would warehouse part of the home mortgage until the time we sell the house, as part of a coherent long term plan?

I tried to broach this with them before 3 years ago but to be honest I felt the people I was dealing with didn’t really understand what they were doing and either couldn’t or wouldn’t engage


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## Zion2022 (6 Nov 2022)

meath man said:


> Brendan, taking your earlier advice I've attached the money makeover information here:
> 
> *Personal details*
> Age: 55
> ...


Difficult situation and agree with your assessment that trading down is realistically your only chance of clearing down PPR mortgage debt. You should probably look to do this sooner rather than later.

The main thing that jumps out at me is what terrible investments the two BTLs are. I assume you’re stuck in RPZs? Getting gross yields of only 4% and 5% is bananas. It’s extremely easy to pick up an 8% yield with rental properties at the moment.
Borrowing close to 100% of capital, soon to be paying 4/5% interest on said capital, and getting a gross yield of 4%/5% just makes no sense.
Assuming you can’t significantly up the rent, you should serve whatever notice you need to serve to sell these, today. Not sure if eviction ban precludes that, but essentially you need to sell those things at the earliest opportunity. They will bleed you dry and the pain will only get worse as ECB hikes further.

Even if you can increase rents, you should probably sell both anyway as you have wayyyyy too much exposure to Irish property.

Best of luck with it!

Edit: just on the car loan. This is a personal thing, but I wouldn’t underestimate the risk in your current situation. A very small drop in the value Irish property and you will be completely bankrupt, such is your level of leverage. Personally I wouldn’t be able to justify driving anything but a heap of scrap until I got my wider debt problem under control. €480 a month is extra pain you can’t afford right now.


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## Brendan Burgess (6 Nov 2022)

I am missing something here.

You have a great income -€170k. 

But you have three big mortgages.   You say you live like hermits. How come you still have such huge mortgages and so little equity in your homes? On top of that you have a car loan and a credit card loan effectively.


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## Brendan Burgess (6 Nov 2022)

meath man said:


> credit card? Circa €5k rolling





meath man said:


> Car loan: €480 per month





meath man said:


> Savings = €45K



I understand that you get comfort from having €45k in the bank. But it's costing you a lot. 

Clear your car loan and clear your credit card and then you can rebuild your savings after that.

Brendan


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## Brendan Burgess (6 Nov 2022)

meath man said:


> ne thing were thinking about is whether Pepper would warehouse part of the home mortgage until the time we sell the house, as part of a coherent long term plan?
> 
> I tried to broach this with them before 3 years ago but to be honest I felt the people I was dealing with didn’t really understand what they were doing and either couldn’t or wouldn’t engage



No, they wouldn't.



meath man said:


> Family home worth *€900K with an €850K *mortgage



You are close enough to negative equity already. 

If they allow you to reduce your repayments, the chances of negative equity are much higher. 

Brendan


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## Brendan Burgess (6 Nov 2022)

meath man said:


> Annual gross income from employment or profession: *€170,000 (self-employed family business)*



Has the business a value? 

When you retire, can you sell it? 

Brendan


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## Brendan Burgess (6 Nov 2022)

@meath man 

I would need to know the history to see how you got into this situation, as I suspect that there must be some other story.

I see three options for you, none of which is attractive

*1) Sell the 2 investment properties*

This was my first thought as you are overexposed to property.  But on reflection, it does not solve your problem.

 You will get a net of €50k

You will still have an unsustainable mortgage on the family home. You will eventually sell it and have equity of about €100k and own no property.

With €100k equity, you won't be able to buy a home.

*2) Don't sell anything*

This is a very risky option and a small drop in property values or further increases in interest rates, and you would be insolvent.

However, if property prices continue to rise, your equity will increase and just maybe you will eventually have enough equity from the three of them to buy one smaller house.  Seems unlikely though.

*3) Sell the family home and move into one of the investment properties.*

This is the strategy which is most likely to leave you ending up owning your own home in retirement.   I know you hate the thought of it, but I think it's one you need to give strong consideration to.  If you sell your home and sell the second investment property, you will have a manageable mortgage.

The term may be up and Pepper may demand full repayment, but you can usually drag that out for years if you keep making substantial repayments.   They may even be happy to leave you in it as long as you are paying the full interest.

*Timing*
I think you should get used to the idea that you will be moving into one of the investment properties eventually.

So keep the best one and maybe sell the other one.

You could try to hold off until the two kids are finished college.  But that is very risky.  A small fall in prices would scupper this plan.

Brendan


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## Clamball (6 Nov 2022)

Yeah I agree with Brendan, and I think you see it yourself, you are on the brink of having the house of cards come tumbling down.  

ppr.   Value 900K.  Owe 850K.  - Clear €50K
No 1. Value 550K   Owe 475K.  - Clear €25K
No 2. Value 200K.  Owe 175K.  - Clear -€5K

So can you sell you PPR and house no 2, move into house no 1?  You will have €90K (your savings plus what you clear from selling 2 properties.). A lot may get eaten up in the move, but pay off the cc bill and the car loan and you will have only 1 loan to service on your €8500 income.  Then focus on reducing your mortgage and increasing your pension pot.

I can’t see how talking to Pepper can help you, they sound like they have zero incentive to do so, if you go into arrears they would sell the asset to cover the loss. 

I think you should aim at moving by next summer, the kids will be through the leaving and away to college, and if you start now you should be able to wrap it all up by summer.  Instead of paying €4K a month to service all your loans you could then afford to pay €2K a month on paying back the mortgage.  This will leave you with €2K a month to fund the kids through college and spend a little more on yourself 

There probably is a whole back story on how you got into this position in the first place, but if you gain some breathing room you can start to focus on how to pay off the home loan before retirement.


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## RichInSpirit (6 Nov 2022)

Is your Net income figure right @ €102000? 
In a self employed senario sometimes business and personal expenses can get a bit confused.


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## Zion2022 (6 Nov 2022)

Clamball said:


> Yeah I agree with Brendan, and I think you see it yourself, you are on the brink of having the house of cards come tumbling down.
> 
> ppr.   Value 900K.  Owe 850K.  - Clear €50K
> No 1. Value 550K   Owe 475K.  - Clear €25K
> ...


The chances of either BTL being the ‘right’ house for the OP and his family would be quite slim since they are essentially two random houses they happen to own. 

Sure there are some cost savings to moving into an existing owned house (CGT, legal, stamp etc.) but given this is the OPs last move and family home possibly for the rest of his life, I’d be inclined to say sell all 3, take 90k of equity and buy a reasonable house in the 300-400k range that suits their needs.

The tracker mortgages are significantly less valuable now which I think further supports this.


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## Brendan Burgess (6 Nov 2022)

Zion2022 said:


> take 90k of equity and buy a reasonable house in the 300-400k range that suits their needs.



This would be correct if they could get a mortgage. But at 55 and 49 , I think it would be very difficult.  (He says that he is paying some capital, so it sounds like a restructured mortgage. If so, they have no hope of getting a mortgage.) 

The attraction of my approach, is that they have a mortgage already and at ECB +1%, it's not bad. 

We don't know when it's term is up. 

 But your suggestion, Zion, is not incompatible with mine if done in the following order:


1) Sell the family home and Investment 2 at the same time.
2) Move into Investment 1 temporarily while looking for the final home. 
3) Apply for a mortgage and see if it's possible to get the mortgage size you need.


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## NoRegretsCoyote (6 Nov 2022)

@meath man - I think you need to delveraage and deleverage fast (you know this yourself!). Interest are only going up short term. I won't speculate on house prices but you are at a point with valuations where you can get out out jail free essentially and that might not be the case in one year or five years or ten years. For me the downside of negative equity is far worse than the upside or more capital appreciation even if interest rates weren't rising.



Brendan Burgess said:


> 2) Move into Investment 1 temporarily while looking for the final home.


I agree if BTL 1 is suitable to your needs it is by far the simplest option, it also has the cheapest tracker. Paying €4k a month for 12 years at even 3.5% will have the mortgage cleared if the business stays profitable. For me zero debt by 67 should be your out-and-out financial property. You don't want to be facing into retirement with any mortgage at all ideally.

I have zero first-hand knowledge of how Pepper would deal with you. The fact that you are cashflow positive, are in positive equity, and have a healthy non-rental income makes me think that won't entertain you at all.


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## goingforgold (6 Nov 2022)

You have 50k equity in your PPR and 105k equity in investment properties. You have 45k cask so 200k positive equity in total. If this was a situation where your house value was 400k with 200k mortgage then it wouldn't be a worrying situation.
Therefore sell the investment properties asap and trade down asap and live a far less stressful life. Get your house in order right now (so to speak)


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## Brendan Burgess (6 Nov 2022)

NoRegretsCoyote said:


> you are at a point with valuations where you can get out out jail free essentially and that might not be the case in one year or five years or ten years. For me the downside of negative equity is far worse than the upside or more capital appreciation even if interest rates weren't rising.



Coyote

In the very particular circumstances of this case, I don't think that this is correct. 

If he does nothing, and house prices fall, he will lose all three properties eventually and have no home to live in.  

If he deleverages, he will have no home to live in Ireland.  So that is not too different from negative equity.

However, if house prices increase, he may have enough equity to buy a property.


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## NoRegretsCoyote (6 Nov 2022)

Brendan Burgess said:


> If he deleverages, he will have no home to live in Ireland. So that is not too different from negative equity.


I'm recommending that he sells PPR and property 2, move in to property 1 and pay down that mortgage as aggressively as possible.

I don't think he should leave himself with no property at his age.


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## dubdub123 (6 Nov 2022)

You need to cut your cloth to suit your situation here..

How much is your car worth now and what loan is left on it? Its actually reckless to have 480pm loan repayments on a car when your financial situation appears to be so risky. Can you sell the car?? Use some savings to buy another and funnel those repayments elsewhere. 

And what is the breakdown of your outgoings? You mention one family holiday per year - how much is this costing for 4 adults? That is not essential spending whatsoever and its not clear what the costs are. This could be anything from a weekend in Kerry to 2 weeks in the sun, so you need to look at this spending as part of overall budget and being honest having a nice family holiday yearly is not living like a hermit. There are plenty of people who sacrifice holidays in order to pay bills. 

What else is being spent ? Your net income of 8500 doesnt stack up to living like a hermit whatsoever.  You dont have high creche fees etc, so where is the remainder of income going? You really need to look at this closely. 

Why are you holding 45k savings when you are paying high interest on credit card? 

One recommendation here is to get in touch with a really good broker. Find out your options regarding the different scenarios above as that will drive your options. You may get a mortgage but term will be quite short due to age. My own mortgage goes to age 67 which is frightening but im hoping to overpay.

Also get estate agents in now to value each property in current market and see where things are at. If selling multiple properties through same agent and solicitor, push for a deal on fees. 

For next year, will you be funding third level next year and is the plan for your children to live at home? Can they pick up summer/part time jobs outside of family business? If not living at home  can you consider rent a room? Can they consider deferring for a year and work for that time? You might need to consider student grants though if going this route.

Would it be worthwhile for your spouse looking at employment outside of family business? Spread out the risk on this front..

You are in an enviable position with such a high level of income and while there are costs relating to college, low interest student loans can be looked into and your adult children take on that responsibility, so that you can focus on other areas.  You have a number of options here but you may need to take some pain regarding car/holidays etc to get back on track and look at the options outlined by earlier posters regarding sale of assets. 

This level of stress cant be good either and it will be stressful trying to assess the situation but the sooner you make decisions and act on them, you can move ahead.


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## NoRegretsCoyote (6 Nov 2022)

meath man said:


> Rental income per year: €22K
> Rough annual expenses other than mortgage interest: €5K





meath man said:


> Rental income per year: €10K
> Rough annual expenses other than mortgage interest: €3K


I don't really understand this part either. I don't see how insurance, LPT, maintenance, etc, are coming in at a *quarter *of gross rental income.

Are they apartments with big sinking funds? Do you have rents well below market rates?


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## Zion2022 (6 Nov 2022)

Brendan Burgess said:


> This would be correct if they could get a mortgage. But at 55 and 49 , I think it would be very difficult.  (He says that he is paying some capital, so it sounds like a restructured mortgage. If so, they have no hope of getting a mortgage.)
> 
> The attraction of my approach, is that they have a mortgage already and at ECB +1%, it's not bad.
> 
> ...


That’s a good point, I was thinking with a decent household income and 30-40% down, you’d get a loan of 2x income at least despite being a bit older - but you are probably right if poor credit history which seems likely .

Talking to a broker would be a wise next step.

OP, do you have any backstory for how you ended up in this situation and are you  confident in your valuations?
Unless you bought all 3 properties in 06/07 or in the last few months, the loan to value ratios don’t make much sense.


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## Scoobydoobydoo (6 Nov 2022)

I agree that the primary focus is to keep a roof over the head....there is 200k sitting in a pension. Is it worth exploring to see if this could be accessed now?


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## dubdub123 (7 Nov 2022)

Scoobydoobydoo said:


> I agree that the primary focus is to keep a roof over the head....there is 200k sitting in a pension. Is it worth exploring to see if this could be accessed now?


I think before going that route OP needs to look at other areas. op mentuined in other thread that they are spending 50% of income on mortgage repayments.  Where is the other money going? 
Why are they going on annual holidays? Why have a car loan of 480pm ?  None of that jars with someone living like a hermit being honest..

OP has an extremely high net income but somehow got in over his head with 3 properties, blaming his lender for not taking a long term approach now, even though hes in his mid 50s.. and seems to have buried his head in the sand about the situation until the eleventh hour even thiugh interest rates were at a record all time low. He is also sitting on 45k and carry credit card debt.

He and his spouse would really need to consider all other options before pulling money out of pension. Its unclear if all this is all in his name or whether his spouse has a pension.


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## Brendan Burgess (7 Nov 2022)

@meath man 

Another way to look at this. 

Say you are living in a house worth €550k with a mortgage of €475k with a tracker rate of ECB +1%. 

Would you consider taking out a mortgage of €850k at ECB +2% to buy a house for €900k. 

Of course you wouldn't.  It would be the height of madness. You might like to trade up but you would realise that you could not afford to.

So, it's absolutely clear to me that you should sell your family home and move into Rental Property 1.

I think it's very important to do that as quickly as possible. You can always find excuses for delaying it.  But delaying it is very risky. 

The big risk is that a property price "softening" or fall, might push you into negative equity and you would lose all three properties.  You could end up homeless and insolvent.  If the best price you are offered falls below the value of the mortgage, you will need Pepper's permission to sell it.  This could take a long time and the price becomes lower and lower. You would need to use your savings to fund the shortfall. And no, Pepper would not do a deal with you. 

And, of course, every month you delay is costing you extra and risking the risk of you defaulting on your mortgage. 

Brendan


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## noelÓm (7 Nov 2022)

Hi meath man,

You need to start cutting your debts ASAP. Waiting 4-5 years is just postponing dealing with your problems and you would be taking a big risk in the interim. You are already too old to have this high a debt burden and you say yourself that you might not be able to keep the business income up indefinitely.

Is the family business in a cyclical industry, where trade might suffer badly in a recession? This would make your situation even more difficult. Add to that higher interest rates or house price declines and you would be completely insolvent. You are really, really vulnerable and need to address this immediately rather than waiting.

Does the business have debts? Have you given any personal guarantees on these debts? Have you borrowed any money from the business? Could the business be sold, now or when you hit retirement age?

The fact that you have trackers and the very high LTVs suggest that you might have been in repayment difficulty before. If this is the case, then you might have difficulty securing a new mortgage. Even if you credit record is clean, you are still old applicants and will be older still in 4-5 years. The bottom line is that you cannot afford to live in a €900k house given your age and your very high debt burden. Other posters suggest moving to one of the BTLs and you should consider that as a relatively clean option.



meath man said:


> Live like hermits.


I doubt it. Perhaps you are just trying to portray your case in a positive light. But make sure you're not trying to fool yourself. €4k per month after the mortgage is paid is a very high income by any standard. If you are still struggling to save, then you might have a spending problem as well as a debt problem.



meath man said:


> Do you pay off your full credit card balance each month? No
> If not, what is the balance on your credit card? Circa €5k rolling


Use your cash to pay off the credit bill immediately.


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## Look ahead (7 Nov 2022)

I wouldn't be waiting to sell the family home, given the global slow down. I would be putting it up for sale immediately.


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## Look ahead (7 Nov 2022)

goingforgold said:


> You have 50k equity in your PPR and 105k equity in investment properties. You have 45k cask so 200k positive equity in total. If this was a situation where your house value was 400k with 200k mortgage then it wouldn't be a worrying situation.
> Therefore sell the investment properties asap and trade down asap and live a far less stressful life. Get your house in order right now (so to speak)


He can't as has to give 7 months notice to the tennents in one which is a real  bummer for him. And with the eviction moratorium now in place, will he even be able to get the tennents out of the second investment property.


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## RichInSpirit (8 Nov 2022)

Another option might be to go bankrupt.
Lose all the debt and the 2 buy to let's probably. 
Hold your principle residence hopefully.
Get any sort of a job and live your life.


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## NoRegretsCoyote (8 Nov 2022)

RichInSpirit said:


> Another option might be to go bankrupt.
> Lose all the debt and the 2 buy to let's probably.


OP is is not balance sheet insolvent, at least yet, and has capacity to service debts from income for the time being.

So I don't see how insolvency is even possible.

Even if that changes the business probably comes into play which is not desirable.


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## DannyBoyD (8 Nov 2022)

This level of debt on a good income didn't happen by accident; until thats addressed, the rest of it is just a band-aid


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## Laughahalla (10 Nov 2022)

You're in a very precarious position and it's because you are overleveraged. Your wife and children need to know (if not already) that money is tight and that you need their help to reduce outgoings..
You need to get rid of your debt. It's looking very likely that Recession is coming so you need to start acting while you can or it could be taken out of your control.
You need to get very real very quick.

If it was me I would sell the car and buy a cheap run around with cash. That will free up ~ 480 euro per month.
I would pay off the credit card in full with your savings and not use it again. That will save you another 70-100 per month on interest.

At least two of the properties will need to be sold as you cannot afford to keep all three.


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## Brendan Burgess (10 Nov 2022)

Laughahalla said:


> If it was me I would sell the car and buy a cheap run around with cash.



While normally this would be the right idea, I don't agree with it in this situation.

The OP's problem is that he is living in a €900k house, not that he is driving a €30k car. 

So focus on the big issue which is getting rid of the house. That is going to be traumatic enough.

Trading down the car is neither here nor there and might give the impression that he is addressing the problem.

Brendan


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## BoscoTalking (21 Nov 2022)

It's difficult to comment without knowing why you can't shore up your outgoings right now.  If you are spending 50% of your wages on bank borrowings then you have 4k and children allowance in cash every months so when you say you have no spare cash that really means that you *can't see* where that 4K cash flowing through your hands is going. While its not sexy you really do need to go back to itemising everything you spend outside of the bank loans and start being frugal, shopping around and foregoing the "nice to haves" for the "do it need it right now". Pay off the credit card and put it away - you can't afford it. 

I suspect that a large portion of your outgoings may be attributed to your two teenaged brought up to believe that they are "well off" and they act, spend and cost accordingly. You probably need to sit down to discuss their college plans and realign many expectations they might have. They may well believe that in 10 months they are going to be living on campus in a city university because they worked hard and that may need to be reset. It's as good a year as any for them to learn frugality ( forgo grinds, nights out, holidays etc., for the greater good).  

The " what will people think when i switch out cars, wear the same dress twice, don't have holiday this year…" will weigh heavy on everyone in the household  - but honestly nobody knows the reality behind closed doors so let 'em look while you do the hard yards getting yourselves back on track.


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## ClubMan (21 Nov 2022)

BoscoTalking said:


> I suspect that a large portion of your outgoings may be attributed to your two teenaged brought up to believe that they are "well off" and they act, spend and cost accordingly.


That's a massive assumption based on zero evidence!


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## Brendan Burgess (21 Nov 2022)

ClubMan said:


> massive assumption



He suspected it and did not assume it.  It's a perfectly reasonable suspicion.

Brendan


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## settlement (22 Nov 2022)

How does one get an 850k mortgage with a 50k downpayment, given the lending rules. Even with an exemption on an income of 170k, the maths don't work out. I guess it was due to the equity in the apartments? Or in a time before current lending rules? If so, it would be strange not to have paid off more of the mortgage


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## ClubMan (23 Nov 2022)

settlement said:


> How does one get an 850k mortgage with a 50k downpayment, given the lending rules.


Nobody said that anyone here got such a mortgage.


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## settlement (23 Nov 2022)

ClubMan said:


> Nobody said that anyone here got such a mortgage.


it says
'Family home worth *€900K with an €850K *mortgage'


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## Brendan Burgess (23 Nov 2022)

meath man said:


> Lender: Pepper
> Interest rate ECB+2%



It was a tracker so granted initially before 2009? 

Brendan


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## ClubMan (23 Nov 2022)

settlement said:


> it says
> 'Family home worth *€900K with an €850K *mortgage'


They may have got into arrears at some point which got capitalised thus inflating the capital balance of the loan.
No lender would advance €850k on a €50k down payment or be allowed to.


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## Sconeandjam (23 Nov 2022)

First thing and I am not being patronising you need to breath. You have to decide what you want to do. Keep going as you are or do something about it. You need a clear head to make a decision on this. You all have to agree on how to fix this.
Have you just been paying interest only on all the mortgages? Have you been putting money in your business and that is where the money has gone? The money has been used somewhere. You have very little equity on the properties? Are you covering the interest on the mortgages and have the bank allowed you do this? when you know where the money goes you can then try to fix it. If this is going on for many years you will run out of time.

Sit down and work out your income and your outgoings that you know of such as mortgage insurance, car payments food etc. Then it is the other expenses that you don’t know where it is going.
The shopping for clothes, entertainment meeting friends that can add up. Expenses on children add up also.

If you have been using the income from btl 1 to pay towards your home then money definately is not added up.
Then set a budget and stick to it. If you find you are in a negative situation then you need to start removing debt. Sell things you do not need or use. Increase wages.
From tomorrow every penny you spend, write it down. Take receipts for everything. You do not realise how many coffee and take outs add up when you do not watch. Even go back to paying with cash Better than tapping and find out money has gone without you knowing it. The two of you should follow this.
You say your jobs are labour intensive so get yourself some insurance if you are out sick your wages will be covered for a time. Can pm you a company we use. ( not connected to them) Also start taking lunches with you and bring a coffee with you on the way to work. Little savings can add up.

You have two children that are 18. They can get a part time job now and while studying. During holidays thay can work more hours. I had many part time jobs while studying to pay fees and keep myself afloat. Cleaning houses and offices in between classes. I paid money to my parents. Your children can help towards the bills. I am sure you did this yourself many years ago.

Your company. If you are doing well then rethink your wages and out that towards your mortgage. If you are paye in your company then hopefully the paye and prsi is paid as you earn each month. If you are self employed and you pay the tax at the end of the year you need to start putting money away for the tax bill as well. Hopefully you are in a good position with Revenue.

Ask your accountant for advice on travel expenses and other expenses that are allowed. What ever you get pay off your credit card and stop using it. If you have employees in your business and you normally given them a small gift exemption which was €500 per year. This year and next you can give them up to €1000 without tax implications. You can apply for this yourself but instead of spending it on clothing and treats put towards food bills etc. Is a small amount in the scheme of things but it is money towards your bills. does not have to be a one 4 all card. Can be store card but through corporate section.

there is a uk website that has a template you can use to work out your budget and it shows the areas you need to work on. Has great tips. Can pm you as do not want to spam the site.


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## Sconeandjam (23 Nov 2022)

ClubMan said:


> They may have got into arrears at some point which got capitalised thus inflating the capital balance of the loan.
> No lender would advance €850k on a €50k down payment or be allowed to.


Possibly only paying interest only or not paying the mortgage resulting in late payment fees and charges or interest only. We do not know how long they have the property or properties.


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## Sconeandjam (23 Nov 2022)

If you plan to sell the btl sell then in the right order. e.g. btl bought so you can carry the loss across to the next one so less or no capital gains tax. If you have not increased the rent follow the correct procedure on rtb site even if you have given your tenants notice. Low rents will affect the resale price.


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## settlement (23 Nov 2022)

ClubMan said:


> They may have got into arrears at some point which got capitalised thus inflating the capital balance of the loan.
> No lender would advance €850k on a €50k down payment or be allowed to.


I see, even more concerning


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## Gigggles (14 Dec 2022)

The reality of this situation is quite stark. As an ordinary person I wouldn’t be at all comfortable if I were in this situation. I think selling main residence and property 3 makes most sense . I wouldn’t sell all 3 as in some parts of Meath you would not purchase a family home for 3-400k. Doing nothing or delaying is not an option as this could mean in the end they whole family will end up homeless. To be fair once bills insurances and food are paid for I could see 4000 of the remaining monthly income easily diminish with the car loan and credit card. I would also get rid of these or at least reduce them to give breathing space or enable overpayment of a mortgage. I would also look at switching to a fixed or green mortgage rate if the remaining house of ber B3 or above. I am no expert but it could give more security in repayments and allow u to grown your cash cushion again over time.


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## Ryan (27 Dec 2022)

I don’t think you have msny options other than to sell the PPR. That level of debt in your position is not sustainable.
im not sure how the OP has ended up with such little equity?

The only other drastic option is to rent it out while in turn renting a more modest home and accelerating mortgage payments.


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