# 900k of mortgage debt & really struggling



## 3rd Gen (26 Jan 2012)

Hi all, below is a snapshot of our financial situation.  We would really appreciate advice on what we should do given our circumstance.  All we see ahead of us is struggling to pay I.O mortgages that will never be repaid.

(Me and Wife) PPR - BOS / Chartis - variable rate, Interest only for entire term 37 years (5 years into it) €2000 paid off principle figure of €485,000.  Mortgage (IO) is €790 per month

(Me) Investment 1:
1 bed Apartment - KBC - annuity - tracker 1.1%- 
Rent= €825
Mortgage = € 1145
Term 30 years remaining 25yrs
Amount outstanding: €255,000

(me) Investment 2
2 bed apartment in England, KBC, was 5yr I.O. but agreed to go to 6 (last yr) as i was not able to meet the monthly repayment.  remaining term is 14 yrs.  Tracker @ 1.45%. amount outstanding is approx £166,000 (or 215k euro)
Rent = £600
Mortgage = c.£265 
Management fees/expenses = £125

When you factor in tax, nppr etc the investments are costing me a fortune.  I am contributing approx €700 to investment 1 and about €100 to investment 2 per month.

Our income:

Combined our NET income is *57,400*

Rough Total expenditure
Includes - Mortgages, cars, gas/elec, broadband, mobile phones,car tax, personal loan (15k), Child care (one child), TV license, Household charge, medical Ins, house ins : *48,000*

this leaves us with approx €180 per week to spend on food and clothes for 3 people.

Now, going back to my original question how can we ever look to pay off or home mortgage and what advice can you give us -who should we talk to.  Help needed..

To date we are not in any arrears...but....in July the Investment 2 mortgage will be up for review with the bank and also as I am self employed I will be very lucky to achieve the same salary I did as last year.


Many thanks

3rd Gen


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## ClubMan (26 Jan 2012)

Can't see how this is sustainable. Have you considered the possibility of cutting your losses on one or both of the investment properties? Did you ever have a reasonably viable business plan for these investment properties and if so what happened to throw it so off course?


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## 44brendan (26 Jan 2012)

PDH; - Your'e on an interest only agreement for another 32 years. This is somewhat cheaper than equivalent rent (assumption) and further assumption is that the property is either in negative equity or closeto it. Why are you worrying abount paying off this mortgage. You have a great deal. Why not sit on it and keep paying the interest. 

Investment1 & 2: Given your lack of repayment capacity go to each Bank and give them a summary of your financial position. The RI from the properties will cover the interest plus a little capital. Offer to pay them the RI for 12 months. If your financial position does'nt improve next year extend the deal. I'm approving deals like this all the time. we're generally happy if we get the RI from the properties. 

Don't present this as an appeal to the Bank. They really have little option but to accept it as alternative is to proceed for re-posession. We generally don't do that if we are at least getting interest cover on the facility.


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## 3rd Gen (26 Jan 2012)

ClubMan said:


> Can't see how this is sustainable. Have you considered the possibility of cutting your losses on one or both of the investment properties? Did you ever have a reasonably viable business plan for these investment properties and if so what happened to throw it so off course?



i have considered moving to the UK to declare bankruptcy (as a last resort).

I was earning between 70-85k for the guts of 6-7 years. The good old days...


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## 3rd Gen (26 Jan 2012)

44brendan said:


> PDH; - Your'e on an interest only agreement for another 32 years. This is somewhat cheaper than equivalent rent (assumption) and further assumption is that the property is either in negative equity or closeto it. Why are you worrying abount paying off this mortgage. You have a great deal. Why not sit on it and keep paying the interest.
> 
> Investment1 & 2: Given your lack of repayment capacity go to each Bank and give them a summary of your financial position. The RI from the properties will cover the interest plus a little capital. Offer to pay them the RI for 12 months. If your financial position does'nt improve next year extend the deal. I'm approving deals like this all the time. we're generally happy if we get the RI from the properties.
> 
> Don't present this as an appeal to the Bank. They really have little option but to accept it as alternative is to proceed for re-posession. We generally don't do that if we are at least getting interest cover on the facility.



We are in negative equity to the tune of about 180k on our PPR.  Our worry is that we can only afford the IO and when the term is up the house is gone....we will be both 65 then and homeless....

On Investment 1&2 both mortgages are with KBC.  Both are on trackers.  if they agree to take the RI what happens at the end of the term and the outstanding amount?

Thanks for your advice..much appreciated.


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## kaza (26 Jan 2012)

For your rental propery in the UK with KBC, that only has 14 years remaining on the term so you could ask them for a term extension to make the repayments more managable? I have done this with my rental property with KBC, I extended the term by 5 years and they allowed me to keep my tracker. Now I add less to it each month and at least the capital is coming down.

With regards going into a RI agreement with them - I was told by KBC that they will only do this generally on a 12 month arrangement, then they will re-access in 12 months. So basically it is an option, but really all you are doing is threading water with it because the term is decreasing and the amount outstanding will then by divided up over the remaining term whenever you come off your agreement with them. So at that stage the repayments will be even higher per month.  

How much negative equity is in the apartment in the UK? Is it possible at all to sell it?


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## 44brendan (26 Jan 2012)

Stand back & think about this. Currently your financial position is such that you are unable to afford any capital reductions on the mortgage. Given your deal with the lender, you have the option of paying no capital for the next 32 years. I.e. in 32 years time you will owe 450K on the property in today's money. Given the cheap mortgage available I would not want to pay anything off the principle. As time progresses the economy & your own income will improve. Rather than paying off the mortgage you gradually put surplus funds into a pension investment. Yield, will be betttter than mortgage interest. The value of the property will also increase over time. That will give you plenty of options by then. Don't believe me, go to an independent financial advisor on this.

Trackers are the norm for investment mortgages. Standard variable rates apply to Hl's. In the case of my own Bank we apply no extra interest increase where a client has financial difficulties, as that is only likely to increase our potential loss. Interrest rate is not the issue now for you. 

Sometimes these problems can seem bigger than they are. KBC are generally a pragmatic Bank and are not looking for quick exit strategies. As I proposed earlier, write to theme & give an honest summary of your financial position & make the offer of paying them the rental income. They should accept. They would be foolish not to. There is no need to beggar yourself & your family trying to maintain the higher repayments.


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## 3rd Gen (26 Jan 2012)

44brendan said:


> Stand back & think about this. Currently your financial position is such that you are unable to afford any capital reductions on the mortgage. Given your deal with the lender, you have the option of paying no capital for the next 32 years. I.e. in 32 years time you will owe 450K on the property in today's money. Given the cheap mortgage available I would not want to pay anything off the principle. As time progresses the economy & your own income will improve. Rather than paying off the mortgage you gradually put surplus funds into a pension investment. Yield, will be betttter than mortgage interest. The value of the property will also increase over time. That will give you plenty of options by then. Don't believe me, go to an independent financial advisor on this.
> .




Not to argue with you, but 15k a year is needed to pay off the outstanding 480k.  For every year that passes where we dont pay anything off the increase is obviously dramatic and becomes more and more impossible to pay off.  Lets fast forward for a minute and we are 64 and our mortgage term is to conclude next month.  If we still have (lets say) 250k outstanding on the mortgage what will happen to us?  I have no pension, my wife will have somthing small and we could find ourselves homeless or having to rent in our retirement age, which will be impossible....

I appreciate your views but is this not a classic case of kicking the can so far down the road that by the time you come to it again it is too late to make serious changes...at least we have youth on our side at the moment.


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## DerKaiser (26 Jan 2012)

A lot going on there.

Focus on one issue at a time.  I think the UK property is the one to deal with first.

*Question 1*
Are you in negative equity?  If not, sell as quickly as possible.  If yes, have you any hope of making up the difference if you sell it?

You will be in serious trouble if you have to make capital repayments on that property.

*Question 2*

How are you subsidising the UK property if rent is £600pm and mortgage is £265pm?


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## 3rd Gen (26 Jan 2012)

DerKaiser said:


> A lot going on there.
> 
> Focus on one issue at a time.  I think the UK property is the one to deal with first.
> 
> ...



Negative equity is about 30-50k. Have personal loan of 15k so don't think I'll get a sort term loan nor do I think I could afford on.  Yes, there is no way I can afford capital repayments. It's about £1300.

The rent is £600, mortgage is 265. Management fee is 50, ins, ground rent, maintenance etc is about another 100. I then have to pay tax on that income. So breaking about even


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## DerKaiser (27 Jan 2012)

3rd Gen said:


> Negative equity is about 30-50k. Have personal loan of 15k so don't think I'll get a sort term loan nor do I think I could afford on. Yes, there is no way I can afford capital repayments. It's about £1300.
> 
> The rent is £600, mortgage is 265. Management fee is 50, ins, ground rent, maintenance etc is about another 100. I then have to pay tax on that income. So breaking about even


 
Looking at it in the cold light of day you have 900k of debt on assets worth about 550k.

In the short term you probably should try to go interest only on all 3 loans. This would stave off capital repayments on investment property 2 and reduce the monthly mortgage by €700 on investment property 1, leaving you a reasonable disposable income.


This leaves you with three problems in descending order:
Should the banks look for capital repayments
If interest rates increase
How you are eventually going to pay off the debt
I do genuinely think 3 is the least of your worries for now as a lot can happen in the next 20 to 30 years. You may have a couple of years before 2 happens. Negotiating interest only is your big challenge now. If successful, it might buy you a few years to improve your income or cut out expenditures (e.g. childcare costs will be lower when you child starts school).

I think you should also assess how much of your monthly disposable income you need to live off (excluding mortgage repayments). Let's say this is €2k, each month when you are paid you should immediately transfer this to a separate account, maybe in your wifes name. Be clear with the banks that you refuse to contemplate touching this money for anything other than living expenses, and the banks can figure out how they get their money back from what's left over.


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## 44brendan (27 Jan 2012)

Highly unlikely that KBC will agree to interest only on the 2 RIP loans. Best option is that they will agree to accept the net rental income per month. However, no harm in asking!


In my view OP is overly concerned about the non repayments on the PDH loan. He currently has a great deal with BoS on the facility and  is concrened about what is likely to happen in 32 years time. The Bank cannot look for capital payments on this facility and this gives the poster various options over the next 32 years to deal with the facility. Negative equity on this property should not be a concern, unless the OP wants to sell/move house.


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## 3rd Gen (27 Jan 2012)

Thanks so much for all the advice.

Our concerns are as follows:

1. little or no disposable income from week to week.
2. Ability to pay off our mortgage(s)
3. Risk of accruing massive arrears if my job continues to decline..business has been on a downward spiral for the last 2-3 year and does not look good going forward.
4. Further austerity is coming in future budgets, increase in costs of living etc..

i dont have a crystal ball but if you asked me what the future holds in our current position i would say that we will be in arrears on the 2 investment properties shortly and that we will never be able to pay off our PDH loan.

I have been reading about bankruptcy in the UK.  If I went over for a year on my own and was declared bankrupt would we get to keep the PDH??


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## Marcusgil (27 Jan 2012)

I found this is very unpredictable.


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## 44brendan (27 Jan 2012)

You are ignoring my advice! Would you not consider getting a 2nd opinion on it!! In my opinion you don't need to take the dramatic step of applying for bankruptcy. However, if you are proposing to take this extreme text I suggest you look at Steve Thatchers posts on the issue & perhaps consider contacting him!


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## 3rd Gen (27 Jan 2012)

44brendan said:


> You are ignoring my advice! Would you not consider getting a 2nd opinion on it!! In my opinion you don't need to take the dramatic step of applying for bankruptcy. However, if you are proposing to take this extreme text I suggest you look at Steve Thatchers posts on the issue & perhaps consider contacting him!




Hi Brendan

I am not ignoring your advice!

I genuinely appreciate your comments and they are being considered.

we need to consider all options and only as  a last resort will I/we seek Bankruptcy.  We love our family home, out neighbours and community so its the last thing we want to give up.

can you advise what will happen 'if' in 31 years and 11 months time when we are 'potentially' facing an outstanding mortgage of, lets say, 250k??

I would rather, while we have youth and one baby (under 6 months) to start again now then face our retirement years broke with potentially no home.  I agree that our mortgage on the PDH is cheaper than rent (we do live in a nice Dublin suburb on the North side).


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## DerKaiser (27 Jan 2012)

3rd Gen said:


> can you advise what will happen 'if' in 31 years and 11 months time when we are 'potentially' facing an outstanding mortgage of, lets say, 250k??


 
Unless we go through an unprecedented 32 years of no inflation, sticking with interest only repayments wouldn't actually leave you in that bad a position. 

You have €550k of property and €900k of debt. The debt will remain at €900k as long as you pay interest only, whereas you only need inflation of 1.5% p.a. over the 32 years for your properties to be worth at least as much as the outstanding loans.

Sure you'd be be back to square 1, and need to find a way of paying the rent/outstanding mortgage at that point, but it has to be the least of your worries now when compared to securing a minimum standard of living for your young family.

I genuinely believe you can afford interest only repayments on all properties for now and that's the only logical outcome. If interest rates go up you may need social welfare supplements for mortgage interest. If KBC insist on capital repayments you may be forced into bankruptcy, but I really can't see that happening if you can service interest only.


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## 44brendan (27 Jan 2012)

Well put Der Kaiser! 
3rd Gen, I'm in the business of giving financial advice (acknowledging that this does not necessarily mean that I'm always right!). You need to focus on the 2 RIP mortgages & postpone any concerns about what will happen in 32 years time. 
As I mentioned earlier you have a strong negotiating position with KBC and if you approach them as proposed you should receive a favourable response. make sure that you put your offer in writing and attach a summary of your financial position.


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## 3rd Gen (31 Jan 2012)

Thanks guys for your advice.

Going to go and send a letter to KBC along with a statement of affairs.  i will let you all know the outcome seeing that this thread has had so many 'views'.

I discussed the family home with my wife and seeing that we love it so much we have decided to stay put and see where we are in a few years.  The interest only payment is affordable on her salary (at the moment).

Back to you in a few weeks.


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## 44brendan (31 Jan 2012)

Good stuff. Make sure you enclose an income/outgoings summary to KBC to underline your inability to cover more than the net rent. 
Best of luck.


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## Bronte (1 Feb 2012)

3rd Gen said:


> Principal Private Residence: husband and wife BOS
> Interest rate:?
> Term remaining: 32 years
> Balance €485,000
> ...


 
I've done this as best I can based on what you've posted, can you go back and fill in the blanks and make corrections. 

You may have to default on the 2 investments and concentrate on the PPR, but do the figures please.


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## DerKaiser (1 Feb 2012)

I think we have pretty much all the info we need.

Approx €12k of the €48k expenditure would be on cars, utility bills etc (roughly €36k on mortgages, childcare and personal loan).

This €12k could probably be lumped in with the €180p.w. leaving about €20k p.a. disposable income per annum after loans & childcare.  

There is no way that will cover the capital repayments on investment property 2, even if all discretionary expenditure was cut out. So step 1 has to be to renegotiate interest only for an extended period -  a no brainer.

The PPR loan is the most positive aspect of the whole deal.  At less than €800pm, you'd pay more to rent so continuing with this is another no brainer.

Finally there is a need to assess whether they can continue to live on the current budget or whether they are living so frugally that they'd be better off on the dole.  It's clear to me that the best source of additional disposable income would be to go interest only on all 3 properties (this would free up €7k p.a. in repayments on the first investment property).

I see no logic in default when interest only repayments are affordable leaving a reasonable disposable income to live off.  If they can start to contribute to the capital repayments to some extent all the better.


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## Bronte (2 Feb 2012)

DerKaiser said:


> I see no logic in default when interest only repayments are affordable leaving a reasonable disposable income to live off. If they can start to contribute to the capital repayments to some extent all the better.


 
But long term is it sustainable, OP wanted to know how if things stayed as they are how would he pay back capital?  

Also banks are playing ball now, not putting interest on interest etc but will they do this forever.  Not nice being subject to the whim of banks.


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## 44brendan (2 Feb 2012)

Bronte said:


> . Not nice being subject to the whim of banks.


 
To be fair I see no evidence here of any approach to the Banks by OP. The core problem is the ability to meet P&I repayments on the 2 investment mortgages. My previous advice to the OP was to approach KBC and request that the monthly repayments be reduced to the level of the net rent. The Bank should not have an issue with this, but may insist on 1 or both properties being put on the market, given that a return to full monthly repayments appears unlikely.
I don't see this strategy as being unfair!


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## 3rd Gen (7 Feb 2012)

Bronte said:


> I've done this as best I can based on what you've posted, can you go back and fill in the blanks and make corrections.
> 
> You may have to default on the 2 investments and concentrate on the PPR, but do the figures please.




Principal Private Residence: husband and wife BOS
Interest rate:1.5 over ecb 
Term remaining: 32 years
Balance €485,000
Value: €305,000
NE: 180K
Mortgage (IO) is €790 per month
Mortgage with capital: it's IO for entire term. 

Investment 1: Husband
1 bed Apartment - KBC - annuity - tracker 1.1%- 
Rent= €825
Mortgage = € 1145 - is this interest only? No. 
Mortgage with capital: 1145
Term 30 years remaining 25yrs
Amount outstanding: €255,000
Value: 175k
NE: 80k

Husband: Investment 2
2 bed apartment in England, KBC, 
Term remaining 14 yrs. 
Tracker @ 1.45%. 
Balance: £166,000 (265k euro)
Value: €205 in £ ? Yes
NE: €50,000 in £? yes
Rent = £600
Mortgage (IO?) = c.£265 
Mortgage with capital = £1300
Fees/expenses = £125
Total costs €390 plus taxes


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## 3rd Gen (7 Feb 2012)

44brendan said:


> To be fair I see no evidence here of any approach to the Banks by OP. The core problem is the ability to meet P&I repayments on the 2 investment mortgages. My previous advice to the OP was to approach KBC and request that the monthly repayments be reduced to the level of the net rent. The Bank should not have an issue with this, but may insist on 1 or both properties being put on the market, given that a return to full monthly repayments appears unlikely.
> I don't see this strategy as being unfair!



Investment 2 was to go P&I last August. Filled out income and exp sheet and they gave me another year IO. 

Been away with work last week so only started to draft letters and data for bank


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## Wipetheslate (7 Feb 2012)

Principal Private Residence: husband and wife BOS
Interest rate:1.5 over ecb 
Term remaining: 32 years
Balance €485,000
Value: €305,000
NE: 180K
Mortgage (IO) is €790 per month
Mortgage with capital: it's IO for entire term. 

Investment 1: Husband
1 bed Apartment - KBC - annuity - tracker 1.1%- 
Rent= €825
Mortgage = € 1145 - is this interest only? No. 
Mortgage with capital: 1145
Term 30 years remaining 25yrs
Amount outstanding: €255,000
Value: 175k
NE: 80k

Husband: Investment 2
2 bed apartment in England, KBC, 
Term remaining 14 yrs. 
Tracker @ 1.45%. 
Balance: £166,000 (265k euro)
Value: €205 in £ ? Yes
NE: €50,000 in £? yes
Rent = £600
Mortgage (IO?) = c.£265 
Mortgage with capital = £1300
Fees/expenses = £125
Total costs €390 plus taxes 


You have a 32 year IO mortgage on your home which you love -790 pm
you have a secure home to live in for the next 32 years at 1.5% above ecb on 485k - I would love that kind of security - In 32 years 485k euro may look like small potatoes.Inflation will be your friend. When your term is up simply sell the house and pay back the capital,there may even be a nice surplus.

Your investment 1 is being paid in full and will be totally paid in 25 years 
your contribution to paying the difference between rent and repayments on this mortgage 320 pm consider this as a savings or pension figure .
In 25 years this property could be worth more and even if not it will be a great cash positive asset.


your investment 2 should be sold to make your life less complicated and any profit used to reduce any unsecured debt or put it aside for a rainy day.

I think you need to forget about the current values of the properties and realise your situation is really not that bad .
Id love to see your household income and expenditure , dont understand how your struggling on 57k pa net ,have a look at my situation and see what mess in in .


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## 3rd Gen (8 Feb 2012)

Wipetheslate said:


> You have a 32 year IO mortgage on your home which you love -790 pm
> you have a secure home to live in for the next 32 years at 1.5% above ecb on 485k - I would love that kind of security - In 32 years 485k euro may look like small potatoes.Inflation will be your friend. When your term is up simply sell the house and pay back the capital,there may even be a nice surplus.
> 
> Your investment 1 is being paid in full and will be totally paid in 25 years
> ...



I think on my PPR the question i have been posing is - suppose the house is worth less or the same or I have 250k left outstanding on that loan.  I should be retiring as will my wife with little or no pension.  You suggest selling the house - where do you propose we go?

Investment 1 is a drain on our funds. I am adding 320 per month to the mortgage but I am also paying HHD Tax 100, NPPR 200, Management fees 1300, tax on income is c. 1200 throw in another 1000 for maintenance and repairs.  I would love to keep it as its a great apartment just down from where we live.  Its beside the DART and always rents within the first week or two.  It was purchased with the intention of being a pension.

Investment 2 will leave me in NE of 50-60k.  I dont think bank will allow this sale to go through....I have filled out my forms and am submitting to the bank this week.

57k net last year.  Earnings for me this year until up to end Feb are 4500e Gross - Net about 2250.  I am self employed and business has dried up very fast.  This year that 57k will be 40-45k (joint).  I would be better off on the dole....Dont think I am entitled to dole though.


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## Wipetheslate (8 Feb 2012)

Well I suppose its a judgement call - 
would the house in 32 years be worth more than 485k in todays money ?
personaly I think it would, but its totaly up in the air though .
Would I be happy living in a house I like for 790 pm for 32 years- hell yes !
Between your (PPR) and (investment 1) your on the hook for for circa 1450
790pm + money being diverted to investment1 650 pm avg
. 
I think your situation is very sustainable on properties PPR & investment 1. 
For example : After 25 years you will have investment 1 fully paid and mortgage free producing a regular income and 7 years left to run on your home IO term.
Even if the home is worth 485k at time of maturity you can sell it and live in the appartment mortgage free or sell apartment and rent, Or live off proceeds - lots of options. 


The English property has to be addressed first 
If you want to try keep the property :
Make a proposal to the bank that you can continue to pay the interest, and any balance left over from the rent will 
be paid against the principal, after managment fees insurance etc are deducted.
If the bank dont accept these reasonable terms inform them that this is the best offer you can make in the current circumstances and you may have to default on the mortgage otherwise.

IF YOU WANT RID OF THE PROPERTY:
Tell the bank you want to sell the property for whatever it acheaves in the current market and you will give them an unopposed judgment or a loan for the shortfall. 
Further negociations can be done after property is gone on the payment of the loan . ie - extended terms , writedown etc.
If the bank refuses to accomodate any plan of action.

Stop paying anything ,( mortgage) and put any rent recieved into a fund and wait.... and wait... and wait ..and keep building up some reserves of cash
to face the inevitable repossesion ,could be 1-2 years.

I feel your pain about being self employed , I was self employed 1998-2010 went looking for help when things blew up and went through the whole social welfare interviews etc 
only to be told I get nothing as my partner earns over 400 pw No Fas ,NO Bluebrick courses ,no re-training help , absolutlley nothing !! I CONFRONTED MINISTERS QUINN,Bruton, by email and
got fobbed off by Quinns office only RICHARD BRUTON gave any assistance ,he looked into it and agreed its a terrible anomolly in the system and said joan bruton may bring 
in some changes in the budget but alas NOTHING, He called to the door the other day and I confronted him again ,In fairness he took details again and said he would be in touch... see what happens
If your not on the register your not getting in !

Can you re check your figures for the English property maybe put everything into euro VALUES STERLING/EURO SEEM OFF.


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## 3rd Gen (8 Feb 2012)

Wipetheslate said:


> Can you re check your figures for the English property maybe put everything into euro VALUES STERLING/EURO SEEM OFF.



 Investment 2
2 bed apartment in England, KBC, 
Term remaining 14 yrs of 20
Tracker @ 1.45% I think
*Balance:* €219,000
*Current MKT Value: *€170-180
NE: €50,000 i
*Rent =* €790
*Mortgage *(IO?) = €270
Mortgage with capital = €1700 (from aug 2012, unless other agreement is put in place)
*Monthly* Tax,Fees/expenses/Mgmt Co etc = €288

At present there is a slight excess of c.€230.  I have had several months in the last few years where tenants have done a runner, refused to pay rent etc and as such Management Co etc have not been paid.  actually, now that i think about it, approx 4 yrs ago I was in arrears of 7-8k£ on the mortgage.  I had taken my eye off the ball and the Direct Debit was not coming out of the account but I was getting some rent.  The bank were writing to me directly to the property re arrears but obviously i never got the letters.  Proceedings were issued and I was summonsed to court in UK.  I phoned the bank solicitor and pleaded with him not to repossess.  I paid a lump sum off the 7-8 k with the remainder paid the following months.  Got hit with a 2k legal bill that was added onto the mortgage.  I probably should have let it go then...anyway, I'm rambling...in short the excess of 230 is being paid to the Freeholder and Mgmt Co.   thats 180 per month. So a whole €50 is profit!!


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## Wipetheslate (9 Feb 2012)

If I was in your situation I would pay the interest on the PPR and continue to live there ,pay full payments on Investment 1 and be happy in the knowledge that It will be your in 25 years .

I would direct my energies on extracting myself from the Investment 2 
take your pick which way you want to go about that.
I think If you can get rid of the uk property you should be fine ,even if you have to pay token ammount to a loan for the balance of what you sell it for and what you owe .

By the way I get 8 k per year tax free from renting a room in my home to a mature foreign student ,(I have 2 kids and they are picking up Italian for free ) This may be an Income stream you could look into .
PS. 
Cancel private health insurance ,not worth it IMO, review all insurances & life assurance & critical illness etc a good broker would be happy to review things for you to fine tune benefits v costs. 
Consider giving back cars on hire purchase under the half rule and downsize iF POSSIBLE ,you can get a perfectly good used car now for 1000.
Get a saorview/freeview tv box and get rid of sky/ntl
Make sure your family mobiles are on the same network which offers free calls text to each other if possible.
Order an extra Green bin from greyhound /panda and reduce the number of black bins you put out ,green bin pick up is free, you would be supprised how much can go to green if you try .
Im sure more people will have money saving tips and remember make sure you know where every hard earned euro goes and not to just give it away for something you dont need . 

Good Luck with everything .


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## 3rd Gen (9 Mar 2012)

Just to give you all an update...

I have submitted my SFS to the bank for Investment 1...I am waiting to hear back but id say they will suggest either IO for a year or take the rent less tax and fees....Kicking the can down the road me thinks.

On another front..I got word that my employment contract is now terminated with immediate effect....I am self employed so I will be starting another thread to find out what I am entitled to through social welfare....


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## DerKaiser (12 Mar 2012)

Sorry to hear about your job.  I think this changes everything, simplifying it to an extent.

The theoretically correct course of action would be to offload the investment properties and cut a deal (writedown) with the banks unless you get another job quite soon.


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## Bronte (19 Mar 2012)

3rd Gen said:


> On another front..I got word that my employment contract is now terminated with immediate effect


 
That's very unfortunate.  And I think self employed people are not entitled to anything.


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## 3rd Gen (26 Mar 2012)

Just an update.

It looks like KBC will suggest a payment of C&I of €700 per month on the Irish RIP.  Thats down from €1,150.  The rent less the service charge is €700 so I just pay the tax. 

They will review on a month to month basis.  It does not cost me any money from my pocket for now (aside from the tax) so it is manageable (unless tenant refuses to pay or moves out etc).

The RIP in the UK is up for review in August.

My wife is able to maintain (for now) the IO payment on our PPR.

On another note... I have found KBC excellent to deal with.  I am able to sleep at night for now!

Currently seeking work at the moment and a visit to the social welfare office to see what I am entitled to tomorrow.  Don't think I will get anything as self employed....

That's all for now.


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## Mrs Vimes (26 Mar 2012)

Glad to hear you've got a little breathing space to get yourself in order.



3rd Gen said:


> Currently seeking work at the moment and a visit to the social welfare office to see what I am entitled to tomorrow.  Don't think I will get anything as self employed....
> 
> That's all for now.



You will be means-tested on total household income and assets, so whether you get anything will depend on your spouse's earnings. As an aside, have you looked into FIS?


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## Bronte (27 Mar 2012)

3rd Gen said:


> Just an update.
> 
> On another note... I have found KBC excellent to deal with.  I am able to sleep at night for now!
> 
> .



Well that's good that you've posted that a bank are excellent to deal with.  Good for others to know.  Glad you're sleeping, most important to not let the stress take over your life.


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## munchy (27 Mar 2012)

over 32 years the rental income from your investment properties will also likely rise and rise and provide a very good form of income, and every bust era is followed by an era of prosperity (albeit probably many years to come still)


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## sustanon (28 Mar 2012)

Great advice from everyone, but it's one sided, only looking at your outgoings on the mortgages.. What can you do to increase your income? it seems if you can earn an extra 30-40k per year you're back in the black as per your original investment plans, no?

Take a hard look at your business, it's model, what you can do to imrpove it, grow the business. There's money out there. be a fisherman, not a farmer.


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## 3rd Gen (27 Mar 2013)

*UPDATE 12 Months Later*

Just wanted to give an update on where I am at the moment. 

I've been on rolling agreements with KBC on the 2x RIPs paying IO on the UK property and IO & part capital repayment on the Irish property. 

The Irish property is up for review and they currently have offered me a 3yr deal on THE SAME BASIS / agreement as the last year. The money that's not being paid off is accruing interest and the cost of that interest is €4500 approx. 

The Uk is up for review again in 6 months and I assume they will ofer the same deal. 

My wife and I are paying €250 every 2weeks off our PPR. 

I am in full time employment now with a salary of 40k ( thank God)

I have not yet signed the agreement with KBC and would welcome some feedback on what they have offered. 

Thanks to one and all for the support and advice.


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## ryaner (29 Mar 2013)

Can't offer too much advise other than speak to a financial advisor and let them map out everything, especially in line with the new personal insolvency stuff coming in. Without knowing all the figures, it'd be very hard to advise, and a forum is not really the place for dumping out line by line expenses or such.

One thing though, if the €4500 figure is the total extra interest on top of what you owe over the past year, i.e. your outstanding balance has only grown by this amount, then the deal isn't too bad. And from what you have said, you seem like someone who will end up in better job prospects in the future at some point and be able to properly recover.


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## bleary (29 Mar 2013)

For the second investment property , should you not be writing off the expenses against tax?


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