# Advice needed on possibility of paying off PEPPER / BOS mortgage with low offer



## Stephenflongo (1 Sep 2021)

Not sure if this it correct place for this post, apologies if it isn't. Myself and my ex partner have a joint 30 year Interest Only mortgage of €210k with PEPPER / (previously BOS) there is ten years left on the loan before the full amount has to be paid. We separated four years ago, my ex partner moved out of the home and I live there and have paid the mortgage since, I have not missed any payments to date.   I have not worked in over ten years and am currently on disability allowance so I struggle to make the monthly payments when mortgage protection and  home insurance are factored in. Nine months ago I inherited €170k from my deceased parents estate so I  employed a solicitor to engage with PEPPER on my behalf offering them €160k as a final offer in the hopes that they might write off the balance. I must add at this point that one of PEPPER's telephone reps indicated that they sometimes accept offers like this. Eight months later and my solicitor has not had a response from PEPPER despite contacting them several times. Five weeks ago I asked MABS for their advice as they have been assisting me with a moratorium during the first lockdown , they suggested that they contact PEPPER and find out what is happening with the offer which they did, but again they have had no response from PEPPER.  

At this stage I just want to know where I stand with this, is this something PEPPER might consider or is it a definite no. If it's a no then I can decide what to so next. 
I must add that I have no intention of selling the property at this point as I have put so much work into it over the years. 

So my question is... am I wasting my time trying to negotiate a lump sum offer with PEPPER or is it something wort pursuing and if so is there anything else I can do to move it past the current deadlock. Any advice is very much appreciated.


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## Brendan Burgess (1 Sep 2021)

I don't know why they told you that Pepper sometimes consider such offers.  They did years ago and might do a settlement in a case of deep arrears and high negative equity. They  would probably agree not to pursue the shortfall if you sold the house and gave them the proceeds.

But you are well able to pay your mortgage and you should do so.

Your best strategy now is to pay the €170k off the mortgage and then try to clear the balance over the next 10 years, so that you won't have to sell the house when the term is up.

Brendan


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## deanpark (1 Sep 2021)

Brendan Burgess said:


> I don't know why they told you that Pepper sometimes consider such offers.  They did years ago and might do a settlement in a case of deep arrears and high negative equity. They  would probably agree not to pursue the shortfall if you sold the house and gave them the proceeds.
> 
> But you are well able to pay your mortgage and you should do so.
> 
> ...


Brendan - the OP says they struggle to pay the mortgage so why do you use slanted language like "you are well able to pay the morgage".

To OP - get some serious independent/ non judgemental advice and proceed armed with that.


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## Gordon Gekko (1 Sep 2021)

deanpark said:


> Brendan - the OP says they struggle to pay the mortgage so why do you use slanted language like "you are well able to pay the morgage".
> 
> To OP - get some serious independent/ non judgemental advice and proceed armed with that.


It’s best to have a basic understanding of how mortgages and personal finance work before diving in two-footed like you did.

- The OP was struggling to pay the mortgage
- However, the OP has inherited €170k
- It’s most likely an interest-only tracker
- Surely the OP could quite easily repay the mortgage over the remaining 10 years using a combination of ongoing income and the €170k? Or follow Brendan’s advice, which ordinarily is what I’d do to save the interest and avoid spending the €170k on other things, but in this case the OP’s money would be bailing out the ex-partner
- If not making a lump-sum repayment, the OP probably needs to find €50k over the next 10 years to clear the mortgage (i.e. €210k plus €10k interest minus €170k); that’s €5k a year or €416 a month; imagine what rent would cost?!

And what about the ex-partner’s obligations as highlighted above? And what about the ex-partner’s claim on an unencumbered property…walked away from a trainwreck and returns to claim 50% of the debt-free property?!


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## NoRegretsCoyote (1 Sep 2021)

deanpark said:


> the OP says they struggle to pay the mortgage so why do you use slanted language like "you are well able to pay the morgage".


Because the OP has said that they have €170k in the bank.


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## skrooge (1 Sep 2021)

From peppers perspective you sound like a profitable customer  who indicated 9 months ago they had €160k at hand. I don't really see why they would consider a write down. It's just not credible. They have a further 10 years of interest payments to look forward to. 

You say your ex partner moved out but  are they still on the mortgage? Again from the lenders perspective they are unlikely to negotiate with just one of the parties.


You should engage with the lender but you should also sort out some sort of legal agreement with your ex partner. If they still have a claim on the property and you clear some or all of the mortgage they may have a right to some of the equity.


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## deanpark (1 Sep 2021)

Gordon Gekko said:


> It’s best to have a basic understanding of how mortgages and personal finance work before diving in two-footed like you did.
> 
> - The OP was struggling to pay the mortgage
> - However, the OP has inherited €170k
> ...


Diving in 2 footed -  very apt given night thats in it!  Like you above and BB on the OP.

@ OP - supplement the input given with your own impartial advice too  that has your interests and complicated set of circumstances factored in .


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## Brendan Burgess (1 Sep 2021)

deanpark said:


> Brendan - the OP says they struggle to pay the mortgage so why do you use slanted language like "you are well able to pay the morgage"



Hi Dean

I think you are missing the point. 

The guy has a real problem in that his/their mortgage will be called in, in ten years. 

He needs to deal with that now.  

If he pays the lump sum off the mortgage, his current level of repayments will probably clear the mortgage within ten years or very close to it. 

If he squanders the inheritance, he will be in trouble in ten years. 

Of course, he also has an issue with his ex. However, he presumably has addressed this as he was prepared to pay €160k in settlement of the mortgage.  But that might be too big a presumption.  

Brendan


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## Brendan Burgess (1 Sep 2021)

Stephenflongo said:


> Myself and my ex partner have a joint 30 year Interest Only mortgage of €210k with PEPPER / (previously BOS) there is ten years left on the loan before the full amount has to be paid. We separated four years ago, my ex partner moved out of the home and I live there and have paid the mortgage since, I have not missed any payments to date.



Hi Stephen

Have you reached an agreement with your ex on the house and mortgage? 

I mean a proper legally binding agreement? 

if you clear the mortgage, will she be able to claim half the house? 

Brendan


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## Stephenflongo (2 Sep 2021)

Brendan Burgess said:


> Have you reached an agreement with your ex on the house and mortgage?


Firstly thanks everyone for your comments above. 

Hi Brendan, thanks for your advice. I was initially taken aback by your first comment where you say "But you are well able to pay your mortgage and you should do so"  as I have been struggling to meet the monthly payments.  But then you say " If he pays the lump sum off the mortgage, his current level of repayments will probably clear the mortgage within ten years or very close to it"  I haven't looked at it this was to be honest.  I have no idea what the readjusted monthly rate will be after the amount owed to PEPPER is reduced to €40k , I need to find this out ... perhaps MABS can help me with this as I'm an absolute disaster with finances 

Regarding an agreement with my ex.. the equity on the house is approx €25k and we have agreed that I owe her €15k but the problem is she want's her name off the title and I can't see PEPPER doing that because of my current financial situation. My solicitor has prepared a legal agreement which my ex is happy to sign pending the outcome with PEPPER. The obvious solution is to sell the house but I do not want to do that for reasons that I won't go into here. A friend suggested that I could use the €170k as a bargaining tool with PEPPER so as the get her name off the title but I doubt they will entertain this idea.  The reason I originally said I offered PEPPER €160k is I was keeping the other €10k to partly  pay off my ex partner. I'm very conscious of the fact that if I can't get her name off the title now and the equity on the property increases (apart from the €170 I pay now)  she might ask for more in the future.  God it sound's so complicated, at this stage my head is completely melted so I'm open to any solution that will resolve it. 

Thanks again

Brian


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## Brendan Burgess (2 Sep 2021)

OK, this is complicated. 

Your ex's name is on the title deeds of the house and the mortgage.  You want her off both.  Your solicitor would understand this. 

1) I think that Pepper might well be open to taking her off the mortgage.  So this should be your first objective. If you reach some informal agreement or even a formal agreement without getting her name off the title deeds, she could make life very difficult for you in the future.  And contract or no contract, you might have to buy her off. 

So this is the absolutely priority to fix. 

Forget about getting a discount. 

Contact Pepper again and say 
1) We have split up.
2) I want to put the house and mortgage in my name. 
3) I have made the repayments for the last few years. 
4) How much would I have to reduce the mortgage by to get her off the mortgage? 

Don't offer them €160k at this stage.  They might settle for less. 
You are not getting any write off. 
You owe €210k. If you pay €110k off this, you will still owe them €100k. 

This really is your first objective and don't get distracted by anything else. 

Brendan


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## Brendan Burgess (2 Sep 2021)

What interest rate are you paying? 
What is your monthly repayment, if you don't know the interest rate.
I am guessing it's about €100 a month.

Brendan


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## Stephenflongo (2 Sep 2021)

Brendan Burgess said:


> What interest rate are you paying?
> What is your monthly repayment, if you don't know the interest rate.
> I am guessing it's about €100 a month.
> 
> Brendan


I'm not sure of the interst rate but the next monthly interest only  repayment is €260


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## NoRegretsCoyote (2 Sep 2021)

Stephenflongo said:


> I'm not sure of the interst rate but the next monthly interest only repayment is €260


Looks like an interest rate of 1.5% which is a bit odd.

Seems very high for a tracker but low for a variable. 

I know it's complicated by your ex but if the mortgage was €40k today, and you were paying it off over ten years at 1.5%, it would cost you €360 a month.


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## Steven Barrett (2 Sep 2021)

You need to work out the net present value of the loan ie what will Pepper make off the loan over the next 10 years. Bring that back to what that amount is today. Take a bit off that and add in the outstanding capital. Then you have your price. If you are on a tracker, there is little reason for Pepper to give you a discount as they won't be saving much. 

The other way of getting a discount is to stop paying your mortgage and become a non performing loan that will be repackaged by a vulture fund. But having €170,000 in cash will count against you in this and there is all the hassle that goes with having a non performing loan. 


Steven
www.bluewaterfp.ie


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## Brendan Burgess (2 Sep 2021)

Stephenflongo said:


> I'm not sure of the interst rate but the next monthly interest only repayment is €260



Is that including mortgage protection insurance?  It seems too high.

If that is just the interest, and you paid that off a €40k loan you would be mortgage-free in 15 years.
After 10 years, you would owe €15k and it's unlikely that Pepper would take any legal action over you to recover that as long as you continued paying.

Brendan


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## Gordon Gekko (2 Sep 2021)

Stephenflongo said:


> Firstly thanks everyone for your comments above.
> 
> Hi Brendan, thanks for your advice. I was initially taken aback by your first comment where you say "But you are well able to pay your mortgage and you should do so"  as I have been struggling to meet the monthly payments.  But then you say " If he pays the lump sum off the mortgage, his current level of repayments will probably clear the mortgage within ten years or very close to it"  I haven't looked at it this was to be honest.  I have no idea what the readjusted monthly rate will be after the amount owed to PEPPER is reduced to €40k , I need to find this out ... perhaps MABS can help me with this as I'm an absolute disaster with finances
> 
> ...


The way you write “PEPPER” in capitals all the time keeps making me think of Star Wars.


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## Stephenflongo (3 Sep 2021)

Brendan Burgess said:


> Is that including mortgage protection insurance?  It seems too high.
> 
> If that is just the interest, and you paid that off a €40k loan you would be mortgage-free in 15 years.
> After 10 years, you would owe €15k and it's unlikely that Pepper would take any legal action over you to recover that as long as you continued paying.
> ...


No, that's just the interest.. the mortgage protection is paid separately to another company.  Should I query the interest rate if it seems too high, could they be possibly over charging me? 

Many thanks for all the good advice. 

Brian


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## RedOnion (3 Sep 2021)

Stephenflongo said:


> Should I query the interest rate if it seems too high,


Its 1.5%. 
BOSI had a variable rate product with a price promise that the rate would never be more than 1.5% above ECB. You could have this product, or one of their very early tracker rates if you're already 20 years into it and you never changed dates. I don't think you said you were on a tracker rate, but other posters assumed it?


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## Brendan Burgess (3 Sep 2021)

RedOnion said:


> I don't think you said you were on a tracker rate, but other posters assumed it?



Hi Red
Yes, I think we assumed it because he was hoping for a discount for early repayment.  

Well spotted on the 1.5%. That must be the product ok.

Brendan


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## Brendan Burgess (3 Sep 2021)

Stephenflongo said:


> Should I query the interest rate if it seems too high, could they be possibly over charging me?



1.5% is unlikely to be overcharging you.   

They should write to you every year and tell you the interest rate.

In any event, if you pay a lump sum off the mortgage and keep up the current level of repayments, you will have the mortgage down to €15k in 10 years.


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## Stephenflongo (3 Sep 2021)

Gordon Gekko said:


> The way you write “PEPPER” in capitals all the time keeps making me think of Star Wars.


Oh.. my bad.. I don't know why I did that.. cheers. I haven't seen Star Wars btw so don't get the reference


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## Stephenflongo (3 Sep 2021)

RedOnion said:


> Its 1.5%.
> BOSI had a variable rate product with a price promise that the rate would never be more than 1.5% above ECB. You could have this product, or one of their very early tracker rates if you're already 20 years into it and you never changed dates. I don't think you said you were on a tracker rate, but other posters assumed it?


Yes just checked that now with Pepper.. its 1.5% but its a variable mortgage.. cheers


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## peemac (7 Sep 2021)

What is the house worth? 

With €170k cash, there are other options such as buying a property outright in your name (depending on area of the country) and selling the current property.

Thus sorting out the issue of the ex partner and the loan with pepper.


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## Stephenflongo (8 Sep 2021)

peemac said:


> What is the house worth?
> 
> With €170k cash, there are other options such as buying a property outright in your name (depending on area of the country) and selling the current property.
> 
> Thus sorting out the issue of the ex partner and the loan with pepper.


As previously mentioned,  I do not wish to sell the property for reasons I won't go into here, if at all possible. Obviously if I can't find a solution I might not have an option but for now I'm trying to figure out a way to hang on to it. Thanks for your response


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