# Struggling With Rental Property Mortgage



## Newera (15 Jan 2014)

Hi folks, I’m looking for some help please. We bought principal private residence in late 2004 with mortgage of €390,000 , bought rental investment property in early 2007 with mortgage of €302,000. The latter had a split mortgage on it i.e. €213,000 secured against the property itself and €89,000 equity release from the principal residence. Both are now in serious negitave equity with the investment property worth in the region of €185K. 

We’ve managed to keep up with all payments (both capital and interest) and both properties are funded by tracker mortgages. At the peak of interest rates, we were paying roughly €4,000 per month in mortgage repayments and now approximately €2,700 without any restructuring. 

The investment property is in a small enough village with poor rental potential, however, we’ve managed to have it rented to the same family for the past 5 years or so at approx €8,000 per year before income tax. Forgive the approximate figures but we’ve pumped approx, €106,000 into repayments on the investment property, with approx €30,000 coming off the capital such that there is approx €270,000 still owing on this property.

The problem is that due to a reduction in both of our incomes, a large tax settlement last year and the increased costs associated with having children we are struggling to make ends meet. Luckily, we both have jobs but cannot entertain the possibility of one of us working less than 5 days a week.

We’ve streamlined our outgoings as best as possible but looking at the next few years when interest rates are only going in one direction and hopefully we’ll have a second child, its plain to see that we’re only fooling ourselves by thinking that the repayments are sustainable. Whether we hit the dead end now or in 3 years time, as far as we can see, it has the same end point and most of our savings have been decimated already. 

Trying to be proactive and evaluate our options: Ideally we’d like to sell the investment property, even at a huge loss and pay off the balance over a number of years. We’ve had the house advertised for sale since completion in 2008 but there has been no movement in it. We’ve tried a few different estate agents and even advertised it ourselves. 

My questions are: 

a) do we need the banks permission to sell? 
b) are BOI writing down the amounts owed (e.g.25%) in cases where people sell as this benefits both the Banks as they do not have to incur the losses associated with tracker mortgages and also benefits the individual.
c) if we sell at a loss, given that there is €89,000 secured against our principal provate residence, can we pay off the shortfall on current rates or would that part be transferred to a different type of loan with higher interest rates? 
d) are we better off approaching the bank ourselves or getting a professional mediator as I’ve heard unconfirmed reports that the banks are more likely to do deals via a mediator than directly with the customer. 
e) any other options that do not just kick the can down the road but that give us a lasting solution? 

Any advice would be greatly appreciated.


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## Brendan Burgess (15 Jan 2014)

You should complete this information to get a proper answer 

Standard Format for mortgage arrears Case Studies


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## Newera (15 Jan 2014)

Income details:
Net monthly €3,666 self-employed. 
Income history: Reasonable job security currently, never out of work but earnings reduced many times.
Net monthly income spouse: €2,890
Income history: Permanent public sector employee.
Amount of child benefit received: €130 per month 
Amount of Mortgage Interest Supplement received: Nil 

Personal circumstances:
Two adult family, one infant, one on the way
Do you need a car for work or do you use public transport? 2 cars needed due to residental location and working in different directions, childcare drop offs / collections. 
Number of children 0- 2 years old: 1 & aother on the way
Number of 3 years old children: 0
Number of 4 - 11 years old: 0
Number of 12 - 18 years old: 0
Monthly childcare costs: €800
Montly spend on special circumstances: €260 on health insurance



Home loan
Lender: BOI
Amount outstanding: €310,000 out of €390,000 originally.
Value of home: Approx €240,000 
Interest rate: Tracker - ECB +1% 
Monthly repayment: €1385 currently 
Amount in arrears: Not Applicable

Summary of discussions and agreements with the banks: None Applicable

Investment property -
Lender: BOI
Amount outstanding: €270,000 out of €302,000 originally (Approx €106,000 in repayments made in under 7 years) 
Value of home: €175,000 +/- 10K
Interest rate: Tracker ECB +1.25% (€89k equity release portion from PPR) (ECB +1.30% €213K portion secured against RIP). 
Monthly repayment:€1,289 
Amount in arrears: Not Applicable 
Monthly rent received: €700


Other loans and creditors - 
Credit Card - €750 
Family loan - €17,000

Other savings and investments 
€30,000

Do you expect any lump sums in the medium term future? No

Other Information: Tax settlement in past 12 months for €60,000. Wife is Irish but has dual citizenship. Would reluctantly consider a fresh start in another country as a last resort. 

How important is retaining the family home to you? 
Which of the following best describes your situation?
I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.

What is your preferred realistic outcome? 
Ideally, we'd like to sell the investment property, get the bank to write down part of the loan and we would pay back the shortfall but its hard to see how keeping going the way we are will work in the long term.


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## Brendan Burgess (15 Jan 2014)

> a) do we need the banks permission to sell?


Yes, although you should probably not sell it. 



> b) are BOI writing down the amounts owed (e.g.25%) in cases where people  sell as this benefits both the Banks as they do not have to incur the  losses associated with tracker mortgages and also benefits the  individual.


No, and are very unlikely to do so at any stage. 



> c) if we sell at a loss, given that there is €89,000 secured against our  principal provate residence, can we pay off the shortfall on current  rates or would that part be transferred to a different type of loan with  higher interest rates?


Your figures are extremely confusing. Forget the amounts of the original loans and the amounts paid to date. What do you owe now? And how much is secured on each property? 

You have an investment property worth €175k
There are two mortgages outstanding relating to this totalling €270k
This is probably a mortgage of €200k against the property 
and €70k against your home. 
You have €30k  in savings.
So if you wish, you can sell the investment property and use your savings to pay down the shortfall.  You don't need the bank's permission to do this.

The €70k equity release will continue on your home as it is. It won't be affected by the sale of the investment. 

In reality, your situation is something like the following 



|equity |Value|mortgage|
Investment| -€25k|€175k|€200k
Home|-€140k|€240k|€380k| €270k + €70k
Savings|€30k
Total|-€135k



> d) are we better off approaching the bank ourselves or getting a  professional mediator as I’ve heard unconfirmed reports that the banks  are more likely to do deals via a mediator than directly with the  customer.



I can see the discussion with the bank as follows. "Dear bank, we have €30k in savings but we want to hold onto it. So would you mind terribly writing off some of our mortgage so that we can hold onto our savings?" 

If you can get a mediator to persuade BoI to agree to that deal, please post their name and contact details here.


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## Brendan Burgess (16 Jan 2014)

> e) any other options that do not just kick the can down the road but that give us a lasting solution?


You have an investment property worth €175k with a mortgage secured on it of €200k

You are getting rent of €8,400 a year on it.
You are paying interest of around €3,000 a year.
So you are making a profit of around €5,000 a year. 

Because of your confusing figures, I can't figure out your repayments on this. But any excess over €3,000 is capital repayments. In other words, you are lashing down the negative equity, probably by about €7,000 a year. You will have eliminated the negative equity in a few years. 

*You have a mortgage of €380k on a home worth €240k 
*Again, the interest on this is only around €400 a month. So again, you are lashing down the negative equity rapidly. 

*Summary
*You have an income of €6,600 net per month.
You have a profitable investment generating €400 a month
Your accommodation is costing you €400 a month. 

You are in great shape.  You are not kicking the can down the road. You are kicking around €20k a year off your debts. 

*What on earth are you doing with €30k of savings? *




> we are struggling to make ends meet. Luckily, we both have jobs but  cannot entertain the possibility of one of us working less than 5 days a  week.
> 
> We’ve streamlined our outgoings as best as possible but looking at the  next few years when interest rates are only going in one direction and  hopefully we’ll have a second child, its plain to see that we’re only  fooling ourselves by thinking that the repayments are sustainable.  Whether we hit the dead end now or in 3 years time, as far as we can  see, it has the same end point and most of our savings have been  decimated already.


You are not struggling to make ends meet. You are struggling to pay €20k a year off your mortgages and to retain €30k of savings. 

Assuming no increase in house prices, you will have cleared the negative equity in around 7 to 8 years - without touching the €30k of savings. 

You will then have an even more profitable investment.
You will still have very cheap accommodation because of your cheap tracker. 
At that stage, your annual capital repayments of €20k will be building up your wealth and not just reducing your negative equity. 

Tactically, you should probably repay the family loan of €17k.  The €30k in savings will block any deal.  If you have €13k in savings and run it down, the bank might do a deal. Although, I imagine their deal will involve you losing the tracker on your investment property. 

*You are in a great position - you just need to clarify your thinking on it.

*You should not be struggling.  Assuming you are under no pressure to repay the family loan, then you should gradually run down your savings to fund a normal lifestyle and the monthly capital repayments. 

This will keep you going for at least three years.  At that stage, your negative equity will be paid off on the investment property and will be a lot lower on your home.   You don't have anything to worry about for around 3 years. 

If your savings are gone and you can't borrow from the family to make the capital repayments, you will be able to sell the investment property at that stage. Again, it is such a profitable investment, that it may not be a good idea, but you may have no choice. 

If you are still struggling with your capital repayments on your home loan at that stage, you may be able to reschedule the loan.


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## QED (16 Jan 2014)

Brendan Burgess said:


> You have an investment property worth €175k with a mortgage secured on it of €200k
> 
> You are getting rent of €8,400 a year on it.
> You are paying interest of around €3,000 a year.
> So you are making a profit of around €5,000 a year.


 
But how secure is the rental income? If the current family leave (after 5 yrs+ renting from you), how likely is it that you will get new tenants?

Make sure to look after this part of your business!! It is very important to your overall situation.


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## Bronte (16 Jan 2014)

Newera said:


> Investment property -
> Lender: BOI
> Amount outstanding: €270,000
> Value of home: €175,000 +/- 10K
> ...


 
These are what strike me:

On the investment property do you currently owe 270K plus 89K, is the repayment of €1289 covering both those loans?

I imagine the original 89K has also been reduced?

What is the term remaining of all mortgages. They are very cheap loans. 

I'm very curious why you purchased an investment property with such a low return, you've got one of the cheapest mortgages, yet your rent isn't even close to the repayment amount?

Odd that you would owe 17K to family, and have 30K in savings?

I find the house value of 175K very high (and it's 185K in the first post). Rent by 12 X 12 makes 100K, even at 15 it only gets to 125K. Plus the market is abysmal, and your property is in what you describe as a small village, with low rental potential. And you've it on the market since 2008 ! Have you ever received a bid?  Very lucky to have a family steadily renting from you.


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## Newera (16 Jan 2014)

Hi Brendan, QED and Bronte,

First of all, thank you all for taking the time to reply and give your excellent opinions. Apologies if my figures were confusing, I was just trying to give as much info as possible in case it was relevant. Hopefully, this will help clarify the figures and remaining repayment terms somewhat. 

Home loan
Lender: BOI
Amount outstanding: €310,000 
Value of home: Approx €240,000 
Interest rate: Tracker - ECB +1% 
Term Remaining: 21 Years
Monthly repayment: €1385 currently 
Amount in arrears: Not Applicable


Investment property -
Lender: BOI
Amount outstanding: €256,000 split across two mortgages (not €270K as previously estimated)
Value of home: €175,000 +/- 10K
Interest rate: Two interest rates since two mortgages used to fund this purchase. 1) Tracker ECB +1.25% (this is the interest rate we have on €74,500 outstanding secured against our main home).  2) ECB +1.30% on €181,500 outstanding secured against investment property. 
Term Remaining: 21 years remaining on €74,500 @ ECB + 1.25%, 18 years remaining on €181,500 @ ECB + 1.30%. 
Monthly repayment:€1,289 
Amount in arrears: Not Applicable 
Monthly rent received: €700

Regarding the €30,000 savings, most of this is my wifes and the €17,000 family loan is mine. So the savings are not accessible to me to clear the loan and it is my responsibility to clear the loan. 

Investment / Rental Property: There are costs of approx €1700 per year associated with the rental property (Property Tax, Insurance, Garden Maintenance, plumber, electrician etc). The rent is as high as I can realistically expect for the area so I cant pass on these costs to the tenants. It took a long time to rent the property out originally and I doubt we'd get as consistent rental income if the current tenants left. We have never had a purchase offer on this property. Yesterday, I spoke with the estate agent from whom we purchased the investment property. He estimated that the selling price would be anywhere in the region of €150-200,000 with €200,000 not being very likely at all in his opinion, so my figure of €175,0000 +/- €10,000 is based on this guesstimate.

Brendan, just checking ..... did your calculations take into account that we have a 2nd baby on the way, the increased childcare costs we'll have, mortgage interest rate increases, rental expenses and upcoming water charges on two properties?

I am encouraged by your assessment of our situation. We have little or nothing left at the end of each month and we see sustainable existence as one where our incomes support our outgoings. Having to deplete savings each month is what caused me to seek advice. I hadnt looked at our situation in terms of clearing the negative equity and then selling if we needed to but this is an excellent way of looking at it. There has to be some point in our lives that we can have a life again, go on a holiday or change the car if we have to.

Would you really consider the investment property "such a profitable" one? As Bronte points out, there is a bit of a gap between the rental income and the repayments. 

I would be very grateful if you could assess our figures one more time given the clarified figures / information.  

Thanks again to all for your advice. I was delighted to see such good commentary, expert opinion and a different view on our situation this morning.


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## Brendan Burgess (16 Jan 2014)

> Investment property -
> Lender: BOI
> Amount outstanding: €256,000 split across two mortgages (not €270K as previously estimated)



Hi Newera

You have press the reset button on this one.  You have a mortgage of €181,500 secured on your investment property. 

You have a mortgage of €384,500 secured on your home.  

Is this not correct?  

If you sell your investment property tomorrow, what mortgage will you have to pay off? Just the €181,500 I presume. 

It's sort of handy from a calculation point of view that the investment property is worth the same as the mortgage. That way you get a true reflection of the profit. 

You are getting rent of €8,400; 
You have interest of €2,800 + costs of €1,700
So you are still making a profit of €4,000 a year before tax. 

You should keep this property.



> Regarding the €30,000 savings, most of this is my wifes and the €17,000  family loan is mine. So the savings are not accessible to me to clear  the loan and it is my responsibility to clear the loan.



OK, but who owns the houses? I presume you own them both jointly. That makes your wife jointly and severally liable for both mortgages.  

Unless both properties are in your sole name, I don't see the relevance of the money being your wife's.  You are both struggling to pay the capital. The bank is not going to give you a deal while your wife has €30,000 in savings. 

The only relevance of the ownership of the savings and loan, is that I can see why your wife might not want to pay off your loan. But she could lend you the money to pay off your family loan. By and large, if you do find yourself struggling, you will be better off with less cash.


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## Brendan Burgess (16 Jan 2014)

> We have little or nothing left at the end of each month and we see  sustainable existence as one where our incomes support our outgoings.



The reason you have nothing is because your wife is hanging onto her savings. 

You have chosen to make a risky investment in property. You have chosen to have two children.  These choices are incompatible with your definition of a sustainable existence.


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## Newgirl2014 (17 Jan 2014)

Hello Newera, Brendan's advice and observations are correct though it may be hard for you to see it like that now as your own thinking is so focused in one way. I suggest you wait for a couple of days, let these different perspectives on your situation settle in your mind a bit and then re-read the whole thing with a fresh mind. I am out the other end of a bankruptcy procedure, an IVA in the UK. It took three or four years to get to that, teasing out my situation, accepting the reality of the false financial foundations we were living on. We have three children. I understand the worry. The advice we got on this website was the best we got anywhere, so stick with the conversation even when it get uncomfortable.


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## Newgirl2014 (17 Jan 2014)

Can you just state clearly whose name is on the title deeds to each property??


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## Newera (17 Jan 2014)

Brendan Burgess said:


> The reason you have nothing is because your wife is hanging onto her savings.
> 
> You have chosen to make a risky investment in property. You have chosen to have two children.  These choices are incompatible with your definition of a sustainable existence.



Ok, my wife has kindly offered to lend me the €17000, now leaving us with €13,000 of a buffer which is essential given the monthly outgoings. I still have that €17,000 debt to clear, regardless of who my lender is. 

Regarding making a risky investment in property, well we weren't the only people in the country who made this mistake and made the 'investment' as we believed the hype that property was the best investment and that prices were only going one way. We also had the income to support the purchase at the time but as with many others, now find themselves in a much less robust financial position. 

Several years on, we all have the benefit of hindsight. We accept that we made a mistake but dont accept that the only solution is a potential lifetime of struggle / debt. People need to be able to move on and both lenders and those in debt need to take a hit and start afresh. At the moment it seems as though the expectation is that those who are in debt absorb all of the hit until they reach financial ruin and then some more, and the banks, who also made a risky investment get off lightly. 

My earlier proposal that, on sale of the investment property, the banks take a hit by writing off a portion of the initial borrowing to reflect what they would lose on the Tracker mortgage, the borrower, takes a hit by having lost a fortune in dead repayments, surely makes some sense? Nobody gets away scott free but both parties get to move on. 

As for having children, this is one of the blessings of life that we are lucky to be able to experience and nobody in their right mind would let economic policy dictate whether they have kids. There is only a small window of opportunity to have kids. I think there needs to be better mechanisms in this country to tackle debt and in time these mechanisms may very well be in place in time, but if I were to wait for this, then we'd have no children and someone else would surely come along in 15 years time and tell us "I told you so".

There needs to be some light at the end of the tunnel. Raising a family is one of those lights and the hug I get from my little boy each morning, makes all this doom and gloom somehow a little easier to get through.


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## Bronte (17 Jan 2014)

Newera said:


> Ok, my wife has kindly offered to lend me the €17000, .


 
Now this is nonsense, don't you both own the houses, both owe the mortgages, presumable the 17K you borrowed from your family made it's way to your family, ie your wife and child? Who is earning etc. Where did her savings come from ....

I disagree about keeping the investment property.

Rent 8400, less expenses 1700 and 75% mortgage interest of 2458 = 4245 'Profit' less tax, usc and prsi, I assume 50% so profit of 2122. That profit is going against the capital, which is good, but the remaining capital has to be taken from your salaries. 

74K @ 1.25 % = 925
181K @ 1.3% = 2353 Total 3278 X 75% = 2458

Yearly the mortgage is costing 1289 X 12 = 15,468. 

15468 less 8400 rent received makes 7068, plus expenses of 1700, plus tax of 2122 = 10,890 annually or 907 Euro a month this house is costing you.

You need to sit down and write down all the different options. Please also double check all figures.

If you sell for 175K, you will owe about 6K (181 - 175), plus auctioneer, and solicitor. Let's say you need about 10K.

On your home you owe 310K costing 1385 monthly, but you will also then have to pay the 74K (how much is this repayment? together with the mortgage of 181K you mentioned a repayment of 1289). You can also reduce the 74K if necessary by about 20K from your wife, to bring down the monthly amount. In that scenario would you be better off. I have a feeling you'd be a lot better off, once you have the repayment amount on the 74K we can figure that out.

Edit

As now clarified the 74K is costing 321 Euro. So by selling you have to pay 321€ but you are already subsidising the rental by 907 Euro a month, meaning you'll have an extra 586 monthly. So no need to pay 20K off the 74K. It's very cheap money. And you should forthwith pay back your relations the 17K.


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## Brendan Burgess (17 Jan 2014)

You made a risky investment. No one told you that there was some guarantee in place that prices were guaranteed to rise. 

You chose to have kids , presumably knowing that this would be expensive. 

You now have defined a sustainable lifestyle as only one of you working. 

These are incompatible objectives and there is no reason whatsoever that the banks and the taxpayer should take a hit to make your objectives compatible.  Especially when you have a joint net income of €6,500 per month. You seem to want the public, the majority of whom earn a lot less than you do, to pay for your choices.


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## Newera (17 Jan 2014)

Thanks Newgirl2014


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## Newera (17 Jan 2014)

Thanks very much Bronte, the €74K is costing €321 p/m currently


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## Newera (17 Jan 2014)

Brendan Burgess said:


> You made a risky investment. No one told you that there was some guarantee in place that prices were guaranteed to rise.
> 
> You chose to have kids , presumably knowing that this would be expensive.
> 
> ...



I never defined sustainable lifestyle as only one of us working. Both of us continue to work and always will.  

I'm not asking the public to absorb my losses. I'm asking the bank to look at what they would lose out by having or see the tracker mortgages through to end term and if they're going to lose that money anyway, deduct it from the capital now and let both them and the borrower move on. Everyone loses but you only get one chance at life and people need to  see this.  Is this a forum for help or finger pointing?


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## Brendan Burgess (17 Jan 2014)

Newera said:


> I never defined sustainable lifestyle as only one of us working. Both of us continue to work and always will.



Apologies, I misread this line as "one of our incomes"



> we see sustainable existence as one where our incomes support our outgoings.


The problem is that your outgoings includes €20,000 of capital repayments a year. 



> I'm asking the bank to look at what they would lose out by having or see the tracker mortgages through to end term and if they're going to lose that money anyway, deduct it from the capital now and let both them and the borrower move on.


I have called on the banks to do this to address their tracker book.   However, they probably reckon that there are enough people out there who will sell their home anyway and pay off their mortgage in full. You are in a position to do that on your investment property. 




> Everyone loses but you only get one chance at life and people need to  see this.


But you are in a great position. You are just not looking at it clearly.  You have 


well paying jobs
€30k in savings
a cheap tracker on your home and
a profitable investment.



> Is this a forum for help or finger pointing?


We do not shy away from pointing out to people how well off they are if that is what you mean? 

I would hope that this thread has helped you and your wife to think more clearly about your situation and fully appreciate how well off you are.  Two days ago, you were talking about "dead ends". This must be galling for the many people who are unemployed, who are in huge arrears and who face homelessness.


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## Bronte (17 Jan 2014)

Newera said:


> People need to be able to move on and both lenders and those in debt need to take a hit and start afresh.
> 
> nobody in their right mind would let economic policy dictate whether they have kids. .


 
I missed this in your post. You are wrong on both counts. The lender doesn't have to take a hit, you do, galling as it is, but you took the risk, not the lender, look at it another way, if it had gone the other way, you would not be on here asking us how you could pay the profits to the bank for the help they gave you in giving you the loan in the first place. 

Many people chose not to have kids or limit their families due to economic reasons, including myself (and for a second reason I'm not going into).

I will add in your repayment amount of €321 to post 14 - reminder double check all figures.


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## 44brendan (17 Jan 2014)

There is a common belief from many investors that Banks should do the decent thing and write off a large portion of the balance where a property is in negative equity. This is based on the misunderstanding of the concept of loan v's investment. Banks are lenders and not investors. For simplistic purposes at a 2% interest rate (in line with many tracker mortgages) and 1% cost of funds, the Bank will achieve an annual return of 1% on funds lent. The investor (in return for taking the bulk of the risk) will expect to achieve a significantly higher return from using the funds borrowed to invest in business or property. However, if the gamble does not pay off the investor bears the full loss and there is no onus on the Bank (who lent the money) to share in that loss. Obviously if the borrower cannot pay back the funds the bank will lose all, or the bulk of funds lent. 
OP's opinion is that the bank should share the loss he incurred in his property investments. However, if that investment had doubled in value would he also be running in to the bank to share the profits. The obligation under a loan agreement has nothing to do with the success or failure of the use those funds are put to. Otherwise we would need to open up venture capital banks with extraordinary high rates of interest to compensate for potential high capital losses. Brendan B's response may not be what the OP wants to hear, but like it or not, the OP did enter into both lending contracts with a full awareness of the risks attaching to a property purchase and when that risk does not pay off, there is no point in expecting the Bank who has merely supplied the finance at a low interest margin to share the pain unless this can not be avoided.


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## Newera (17 Jan 2014)

Brendan Burgess said:


> I have called on the banks to do this to address their tracker book. However, they probably reckon that there are enough people out there who will sell their home anyway and pay off their mortgage in full. You are in a position to do that on your investment property.
> 
> 
> But you are in a great position. You are just not looking at it clearly. You have
> ...


 
Thank you Brendan, I really do value the advice on this forum from yourself and other contributors. I am hoping to focus on the solutions for the future and not dwelling on mistakes of the past that nobody can change. I have always tried to be conservative in my risks and proactive in dealing with problems. The former hasnt worked out so well, hence the need for me to start this thread, so I'm focussing on the latter. Thanks again for your advice.


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## Newera (17 Jan 2014)

Bronte said:


> I missed this in your post. You are wrong on both counts. The lender doesn't have to take a hit, you do, galling as it is, but you took the risk, not the lender, look at it another way, if it had gone the other way, you would not be on here asking us how you could pay the profits to the bank for the help they gave you in giving you the loan in the first place.
> 
> Many people chose not to have kids or limit their families due to economic reasons, including myself (and for a second reason I'm not going into).
> 
> I will add in your repayment amount of €321 to post 14 - reminder double check all figures.


 
Hi Bronte, I hope I have not offended you with my earlier opinion on having kids and I apologise if I have offended you. 

The banks saw opportunity to make money when they had an excess of cheap money thrown at them. THey took a risk by lending for a profitable return (invested) and not only that but incentivising large mortgages via cheap money and also fuelling the property bubble. 

Borrowers including ourselves have to take some of the blame also but all I'm saying is that where both parties are to blame, it would be better for the greater economy, that if the banks are going to lose whether the loan goes full term or not and the borrower may not be able to see the loan through to full term, in which case the bank takes a bigger hit, instead of the bank and borrower protracting the saga, just sit down, assess the figures, come to an agreement quickly and let both parties move on. Both parties will have lost but both parties can start again.

In my opinion this would allow the economy to recover faster instead of crippling it and those who made a mistake can get on with the rest of their lives and maybe do something to create jobs with the money that is now not going into a mortgage where everyone is losing money.


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## Newera (17 Jan 2014)

Bronte, I checked my figures from bank statements, original mortgage offer letters etc, before I submitted them last night so they should be accurate. Thanks again for taking the time to offer an assessment of the situation.


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## Bronte (17 Jan 2014)

Newera said:


> I hope I have not offended you with my earlier opinion on having kids and I apologise if I have offended you.
> 
> 
> Borrowers including ourselves have to take some of the blame also but all I'm saying is that where both parties are to blame,
> ...


 
No offence taken at all, but you should be aware that there are a lot of people reading what you write thinking how lucky you are. You are just not seeing this. 

Your second point I don't agree with at all, in your case you took the risk, it was not a shared risk with the bank, you would not have shared the profits if it had succeeded with the bank, you don't seem to understand that even if the bank took the 'hit' with you, it would be in effect other taxpayers, who would be on the hook.

I appreciate your thanks, it's nice to get feedback that we are helping someone, not only should you check your figures but all mine, I never stand over them.  Nor should any viewer on AAM.  

And not for a moment do I believe that the savings are your wife's !  The right thing to do is pay your relatives.  I have found that the right thing to do, is generally the best thing for society, and you mentioned that in what you wrote, bring it home.


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## Gerry Canning (17 Jan 2014)

Reading the Threads;newera, 

It is always difficult to ONLY stay on the clarity of FINANCE .

Try to take out any (family) type thoughts and let the true figures decide your financial position. 

If the figures add up today , run with those figures, as trying to guess the future is  @ best uncertain.


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## Newera (17 Jan 2014)

Bronte said:


> Your second point I don't agree with at all, in your case you took the risk, it was not a shared risk with the bank, you would not have shared the profits if it had succeeded with the bank, you don't seem to understand that even if the bank took the 'hit' with you, it would be in effect other taxpayers, who would be on the hook.



I completely disagree with this point. The bank, who are inevitably going to make a loss by the nature of the loan being a Tracker, would simply calculate what that loss is going to be over the lifetime of the mortgage and balance that against the risk of not being paid at some stage. Instead of realising all of the loss, even if they passed e.g. 80% of this figure on to the loan amount, they would be saving the Taxpayer money? 




Bronte said:


> And not for a moment do I believe that the savings are your wife's !  The right thing to do is pay your relatives."



I'm not sure what exactly you mean by this but I agree the right thing to do is to pay my relatives and thats what we're doing.


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## Newera (17 Jan 2014)

MrDerp said:


> I'd suggest that with baby no.2 on the way, you're time would be better spent sitting down with your wife and deciding what you're going to do to make up the shortfall of 570 that's coming (700 creche - 130 childrens allowance)
> 
> I'd also strongly strongly recommend that you discuss money in general, as a couple. The fact that you have separate savings and debt as a married couple suggests to me that you each keep a lot of personal income, and maybe you each keep a good few hundred back for personal expenditure like clothes and entertainment?



Thanks for the feedback MrDerp. We have very good control and records of our finances and regularly assess our situation together. A certain amount of the money is / was my wifes, a certain portion is mine and the balance is joint money. Whether or not this is what other people do, its the way we operate and has been ok so far.


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## Newera (17 Jan 2014)

Gerry Canning said:


> If the figures add up today , run with those figures, as trying to guess the future is  @ best uncertain.



Thanks very much Gerry


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## Bronte (20 Jan 2014)

Newera said:


> . We have very good control and records of our finances and regularly assess our situation together..


 

I completely missed the income. 6686 monthly, less mortgage of 1385 less creche of 800, new child creche, 800 'subsidy of rental' 900 leaves you with 2801 monthly??? And most of the rental cost is actually capital repayments, as are a lot of the 1385 on the home loan. Eventually you will have two assets and no loans.  I agree with MrDerp, it looks like a standard of living issue, other debt servicing or else other spending that is out of control.


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## DK123 (10 Feb 2014)

When are morgages,especially buy to lets going to have their repayment periods extended to age 80 or 90 in ireland as the population are now living longer and similiar to America where where i understand it is regarded as discrimination against older people not to give them morgages to these ages and in Britain where some financial companies have no upper age limit on the repayment term.?Surely for people say in their sixties with big debts restructureing their debts to these ages would be a win win for banks and for owners.


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## 44brendan (10 Feb 2014)

Yes of course. However, very few BTL mortgages are self financing and most employess still retire at age 65 with a significant drop in income.


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