# BTL - should they have been given the mortgage?



## kildon (25 Apr 2012)

Hi,

Husband is 61, was working at application stage but retired at drawdown
Wife, 55, working 4 years after being a homemaker for previous 30 years, no pension entitlement and won't get a full state pension when she is made redundant this year
they got a BTL mortgage for 255k (80%) in 2007, term of loan was 25 years with the first 3 years interest only

should the loan have been issued? does it break any consumer protection codes?

I'm looking at this from the point of view of the term of the loan granted

Thanks
k


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## Black Sheep (25 Apr 2012)

Almost twenty years ago a friend aged 53,(permanent employment) wife aged 52 working part-time was buying a house in the city for his 3 kids to live in while in collage. He was only allowed a max of 15 years mortgage of  2.5 times his salary and he was putting 25% deposit. No mortgage on PPR.

Interesting how many times the goal posts have changed since then

Can you get a copy of the original loan application

I can't imagine how that mortgage could have been considered appropriate for that customer


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## wbbs (25 Apr 2012)

What is the husband's pension?


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## Bronte (26 Apr 2012)

It is totally outragous that someone aged 61 got a 30 year mortgage but I don't think it's illegal. It's just another sign of how mad the celtic tiger was. Someone far richer, the Killiney couple, got mortgages in later life and for sure if it was illegal they would have taken a court case. 

For the wife, she should enquire from social welfare on her rights in relation to purchasing pension entitlement. There are also nowadays credit given for a certain amount of years while being a homemaker bringing up children. Enquire initially on the phone but only rely on information in writing. The pensions office is in Sligo. Watch out there are time limits and now would be a good time when she is getting a redundancy, better to use that to buy pension instead of the bank getting it's hands on it for the investment property.


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## wbbs (26 Apr 2012)

You would need to know the income details, just because someone is retiring does not mean they could not afford the mortgage, there may be life cover in place as well to cover that side of the age issue.  

The loan was given in 2007 when obviously they were looking at the rent paying a large contribution to the repayment or did they buy with the intention of flipping it when the 3 yrs interest only was up like a lot of people or keeping it to full term to supplement pension at that time.  If they did then they lost their gamble but that doesn't mean they didn't know what they were doing at the time.


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## kildon (26 Apr 2012)

Don't know what the pension is. The intention I'm sure was to sell the property on a later stage. The Killiney couple are a good example to compare against although the couple above are Amateurs, just the one btl mortgage.


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## dereko1969 (26 Apr 2012)

Was a gun held to their heads prior to drawdown?
Why did they sign off on a BTL at that age?


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## p15574 (26 Apr 2012)

dereko1969 said:


> Was a gun held to their heads prior to drawdown?
> Why did they sign off on a BTL at that age?



+1. As in most of these cases, it comes down to greed, pure and simple - jumping on the bandwagon, "buy off the plans now, sell in two years at double the price - sure isn't everyone making a mint"

This is like putting it all on black in a casino and then whining when you lose. Or worse, whining about it and expecting me to pay your debts for you. It's bad enough having to pay the rest of the banks debts without greedy people regretting decisions they made as adults. If you can't stand to lose, don't play the game.


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## Bronte (27 Apr 2012)

I think the last two posts are a bit unfair. Kildon was only asking about legalities and did not mention not paying etc. Not everyone was greedy etc and some people were genuinely stupid and some banks gave out money when they ought not to have and the regulator did not do his job etc.

In any case the whole of Ireland is now trying not to repay if they can find that elusive loophole. Actually not the whole of Ireland, some people who can pay but don't want to pay. Particularly the very very wealthy.  And probably they will get away with it.


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## oldnick (27 Apr 2012)

+1 Bronte.

If the OP's elderly friends were "greedy" trying to biuy a hosue and accept a generoud loan from their bank so be it. They wwere also a bit silly to take on such a deal.

But the real stupidity and greed surely was with the highly paid ,so-called professional expert bankers who thew the money at them. 

Anyway, we've gone around this argument a hundred times on this AAM. It's an interesting debate. 

But in this particular case when a  frequent poster asks a reasonable  question is it necessary for immediate nasty gibes like dereko's  "did they have a gun to their heads"  or the quite vitriolic comments of p15574 ?


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## p15574 (27 Apr 2012)

> Was a gun held to their heads prior to But in this particular case when a  frequent poster asks a reasonable  question is it necessary for immediate nasty gibes like dereko's  "did they have a gun to their heads"  or the quite vitriolic comments of p15574 ?



I didn't intend to sound vitriolic, I'm just of the opinion that people should stand by their commitments without looking for excuses to get out of it and look for other people to suffer their loss. I agree that the bankers lent out a load of money they shouldn't have, but I don't think that that should void the contracts that people freely signed with a view to selling later, as the OP has said. I think issues with principal residences are a greyer area, but I disagree with debt forgiveness for second and subsequent properties - I didn't make a silly purchase, why can't I get my mortgage 'forgiven'?

This loan should never have been granted though, loan terms should never extend beyond retirement age, although I'd say that's more of a 'policy' than anything binding


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## Bronte (27 Apr 2012)

That sounds fair enough P15 as you've explained your stance which is absolutely understandable.


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## dereko1969 (27 Apr 2012)

kildon said:


> Hi,
> 
> Husband is 61, was working at application stage but retired at drawdown
> Wife, 55, working 4 years after being a homemaker for previous 30 years, no pension entitlement and won't get a full state pension when she is made redundant this year
> ...


 


Bronte said:


> I think the last two posts are a bit unfair. Kildon was only asking about legalities and did not mention not paying etc. Not everyone was greedy etc and some people were genuinely stupid and some banks gave out money when they ought not to have and the regulator did not do his job etc.
> 
> In any case the whole of Ireland is now trying not to repay if they can find that elusive loophole. Actually not the whole of Ireland, some people who can pay but don't want to pay. Particularly the very very wealthy. And probably they will get away with it.


 


oldnick said:


> +1 Bronte.
> 
> If the OP's elderly friends were "greedy" trying to biuy a hosue and accept a generoud loan from their bank so be it. They wwere also a bit silly to take on such a deal.
> 
> ...


 


Bronte said:


> That sounds fair enough P15 as you've explained your stance which is absolutely understandable.


 
Perhaps my gun to head was a little over the top but, as the OP has stated and this is the only information we have to go on - does no-one think that perhaps the original couple were seriously delusional or perhaps not fully truthful with the Banks?

From my reading the wife wasn't working in 2007 and the husband was either about to retire when the application went in and *had actually retired* when the mortgage was drawn down - did they seek to re-visit the mortgage at that point if the retirement wasn't planned? Did they inform the bank at that stage that their situation had changed? Who in their right minds would apply for a loan when they're on half the salary (if they were lucky) they were on and think it was a good idea?

Personal responsibility doesn't seem to be recognised in this country at all.


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## oldnick (27 Apr 2012)

dreko and p15 - yes fair enough-  I probably was also over the top in my reaction to your reactions... 
I confess that I,too, feel annoyed at times with the attitude of some who entered into debt but in many cases I think that they made commitments based on naivety and desperation ,not just greed.

Many purchasers in 2000-2007 were naive and/or desperate  and clever people like the banks -who  should have known better than the actual borrowers - took advantage of the naivety and desperation of those borrowers. 

This debate will run and run -as it is now on an adjoining thread about today's news about BOI's recent debt forgeness decision. I admit it does slightly worry me.


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