# Expecting to go into arrears with bank. What would you do in my situation?



## On_A_BEACH (26 Mar 2011)

Hi folks,

Staring next month and the month after, our two mortgages will go to interest and capital after being on interest only for three years.  Naturally the bank want their money back.  This we knew from the outset and have done our utmost to prepare for same.

Unfortunately having assessed our financial comings and goings it looks like i'll be going into arrears on the largest mortgage - i'd say a month or two into it.

Past three years have seen a fall in our own income and the rental income. It's not a question of won't pay - but - can't pay.

The smaller mortgage is 1.8% tracker on 300K.
The larger mortgage is 1.7% tracker on 834K.

The smaller mortgage i've declared as my principal residence some four months ago.

The larger mortgage is charged against a particular property with three other properties cross charged to it.

I have emailed, written and phoned the bank, but this is their general policy at the moment - of trying to force everyone off their buy-to-let trackers and onto variable rates, which they'll put up whenever it suits them..

I'll be a bit more specific in the next post re: info/answers on what i should do, but have to go now as baba needs feeding.  Is there any other general info ye need in the meantime??

Cheers everyone...


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## ajapale (26 Mar 2011)

On_A_BEACH said:


> The larger mortgage is 1.7% tracker on 834K....and is.... is charged against a particular property with three other properties cross charged to it.



What does "cross charged" mean? Do you own the other properties? Can you sell any/all of them?


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## 95a (26 Mar 2011)

Any chance the larger mortgage is cross charged against your home as well?  

Depending on how your bank is dealing with the Code of Conduct on Mortgage Arrears you may get protection here on that loan.  Protection meaning the bank being obliged to work with you on alternative repayment measures and not being able to require you to lose your tracker.  

(Ajapale - Cross charged here means the mortgage is secured on a number of properties.)


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## On_A_BEACH (26 Mar 2011)

*Response to ajapale and 95a*

Hi Ajapale,

Yes, I would like to explore possibility of selling properties to reduce debt. Although, I'm of the opinion by checking daft.ie that all properties are in negative equity individually and collectively within the mortgages.

Mind you - if they sold at all, and the banks allowed it - and the remaining debt (negative equity bit) was less then 15% of the original debt, then maybe yes, this could be a route..

But in this market selling properties seem to be a non-runner.

Hi 95a,

Larger mortgage is split into 4 properties with 3 cross charged against the 4th most expensive one.  So if i want to be included in 'the Code of Conduct on Mortgage Arrears' we'd have to move back into this property and announce it as our new PPR. Sounds like tactical house hopping  It may well have to be done.

Yes, I don't want to lose my tracker. 

Can a bank force you off your pre-existing tracker / rate if you go into arrears? Where would I see that written?


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## 95a (27 Mar 2011)

They won't for home loans but for buy-to-lets it's a possibility.  Check the t &cs of your mortgage.  

I know that PTSB are using interest only expiry to force customers off trackers. - i.e. customers have the option of reverting to cap & interest and keep tracker OR stay on interest only and lose tracker.  

For most customers the only option will be to take the smaller increase (in the short term) and stay on IO and lose tracker.  

Given the difference in the size of your mortgages, tactical house swapping may be the way to go.  Regardless whether you do this or not, you should contact your lender for a financial review and see what your repayment options are.


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## Bronte (28 Mar 2011)

On_A_BEACH said:


> But in this market selling properties seem to be a non-runner.
> 
> So if i want to be included in 'the Code of Conduct on Mortgage Arrears' we'd have to move back into this property and announce it as our new PPR.
> Can a bank force you off your pre-existing tracker / rate if you go into arrears?


 
If you don't pay your mortgage you may well be forced to sell.  Better for you to sell before getting to the stage of being court ordered to do so.  

Can you afford the mortgage of 834K if you moved back into that property?

If you go into arrears than all bets are off with the bank and it will be them telling you what rate you'll have to pay.  

You need to meet with the bank and have all your facts and figures.  They may be willing to let you continue on interest only but only if it makes sense.


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