# Trying to be proactive regarding mortgage and debts



## misterk (27 Oct 2011)

Hi folks, having searched the forum for my queries i feel the need to pick your expert opinions.

Have 30 yrs left on mortgage with PTSB, balance 225,000, interest 6.15%, repayments 1324. Both lost our jobs. Maxed out cr card at 6600, credit union loan 7,200. No arrears on any loans or mortgage by using our savings to keep afloat.

Slashed monthly expenditure by 570 per month and put this on MARP forms for meeting today. Met PTSB and asked for a moratorium so i could clear personal debts over the few months and was told NO. Asked would they transfer balance of cr card to their 0% 6mth offer they said No. Asked would they give me a loan to clear it they said NO.

I was told that my mortgage had a 3 month holiday periodevery 3 years, news to me! asked could i take that then they said NO as you are in negative equity, seems bizarre.

Trying to be proactive and they are being difficult, i want to pay my debts but they are not being helpful, has anyone any advice or suggestion or tips to help me out of this black hole i feel i am trapped in.


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## ClubMan (27 Oct 2011)

On the _CU _loan - how much do you have in shares? Offsetting shares against the loan balance and reducing the regular repayments may buy you another small bit of cashflow breathing space. See here and bear in mind you may need to dig your heels in to get your _CU _to accede to such an offsetting request!

http://www.askaboutmoney.com/showthread.php?t=155464

What is your monthly income right now?
Presumably you don't have any savings of any great significance that could be used to reduce/clear any of your debts?

The lender has an obligation under _MARP _to deal with your situation reasonably. If it transpires that you don't think that they are doing this then there is an appeals process. 

Maybe post a more detailed financial summary (here or in the _Money Makeover _forum) so that people can give more specific suggestions and advice?


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## wbbs (28 Oct 2011)

Ok, not defending the bank but you must go about this another way.  The bank is not going to give you a break on your mortgage to repay other bank debt, their attitude is always going to be your mortgage takes priority.   You should approach all other lenders first including credit union with a view to decreasing those payments, only when you have done as much as you can with them will the bank be more inclined to do something.  They wont give you the 3 month break because it would make the negative equity worse, what they will more than likely give you is interest only for maybe 6 months initially and then you will be expected to apply for Mortgage Interest Supplement.  This will make sure the bank gets some money each month and more importantly your debt will not be growing as it would if you got a payment break.   The bank knows the MIS is there for you to claim so that is going to be the first option when they are satisfied that you are prioritising your mortgage debt and not your unsecured debts.   Not fair I know and of course it would be great to clear the small debt but that not the way it works.


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## ClubMan (28 Oct 2011)

wbbs said:


> Ok, not defending the bank but you must go about this another way.  The bank is not going to give you a break on your mortgage to repay other bank debt


That's not necessarily true - somebody I know got 6 months interest only on the mortgage to facilitate reduction/repayment of their _CC _balance (which also happened to be on a card with the same bank - but each bank department was looking after their own turf and there was no centralised oversight on this process). Surely _MARP _is designed to deal with exactly this sort of situation - i.e. giving breathing space on the mortgage to allow other (unsecured and high cost) debts to be reduced/cleared so that the mortgage situation eventually becomes sustainable again?


> You should approach all other lenders first including credit union with a view to decreasing those payments, only when you have done as much as you can with them will the bank be more inclined to do something.


I would agree with this. 

BTW - presumably you are already claiming owner occupier mortgage interest tax relief? If not then do so immediately on a backdated and ongoing basis:

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html


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## misterk (28 Oct 2011)

thanks for the feedback here are some more figures to help clarify situation. These are from the MARP forms

Total monthly income 2145, which includes MIS of 415,part time work of 1075 and social welfare of 555.

Credit union loan has been restructured from 120 per week to 30 per week. Already offset my shares to get this deal with them.

Credit card are minimum payments every month so not making any in roads with it.

Monthly expenditure 1133.44
Mortgage                1324
Total Expenditure     2457.44

Interest only figure would be 1140 so still unsustainable
Deferred interest figure would be 755 when you take away the MIS reduction would be also unsustainable, when i explained the mis reduction amazingly the bank employee told me not to tell the social welfare and there would be no deduction in mis, i was shocked at that


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## ClubMan (28 Oct 2011)

Your mortgage capital repayment is only €184 - is that correct? Seems very low but I haven't crunched the numbers...

Are you definitely already claiming owner occupier mortgage interest tax relief? I've come across cases of people not knowing about or claiming this!

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html


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## misterk (28 Oct 2011)

Just double checked the form the monthly interest after trs is 1121 which is crazy high figure, my wife bought the house in 2006 and we got married in 2011


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## ClubMan (28 Oct 2011)

c. €1,121 sounds plausible to me as the GROSS interest figure but I would have expected it to be lower net of _TRS _- e.g. _Karl Jeacle _gives:

http://www.drcalculator.com/mortgage/ie/

€225K @ 6.15% over 30 years:

Total capital + gross interest repayment: €1,370

Obviously captial/interest split changes over time but for the initial repayments:

Capital: c. €220
Gross interest: c. €1,150

So the interest repayment net of _TRS _should be less than €1,150. Not sure what rate of _TRS _you qualify for and the rules seem a bit convoluted to me these days.

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html

However €1,121 for net interest seems high to me.


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## misterk (28 Oct 2011)

There was 6 months reduced payments 2 years ago when we were both made redundant maybe that is the adjustment there.


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## ClubMan (28 Oct 2011)

Maybe but if you have €225K outstanding balance @ 6.15% over 30 years then the gross interest should be c. what _Karl Jeacle _calculates and then _TRS _should come off that. So it still doesn't add up for me. Where are you getting the capital + interest breakdown from? Mortgage statement? Lender? Elsewhere?


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## misterk (28 Oct 2011)

The form i am using is the one that PTSB filled in for the MIS review dated end of september and sorry my mistake outstanding balance is 222,000 not 225,000
current monthly repayment is 1324.12
current gross interest content is 1159.40
current interest after trs is 1121.90


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## ClubMan (28 Oct 2011)

What do you mean _"PTSB filled in"_? I thought that the individual applicant had to fill in the _MARP SFS_?

Anyway - _Karl Jeacle _gives:

€222K @ 6.15% over 30 years gives

Total repayment: €1,352
Initial capital: €215
Initial gross interest: €1,140

So maybe close enough...

But your net interest repayment is only c. 3% lower than your gross interest repayment which seems to make your _TRS _very odd/low.


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## wbbs (28 Oct 2011)

It is more the exception than the rule that the bank will give you a break to pay other debt, much better chance of it if the unsecured debt is with same bank.   Sometimes comes down to how good the pitch made for it is.


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## wbbs (28 Oct 2011)

I have found it  is more the exception than the rule that the bank will give you a break to pay other debt, much better chance of it if the unsecured debt is with same bank.   Sometimes comes down to how good the pitch made for it is.


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## misterk (28 Oct 2011)

If i do not have arrears why do i have to enter into the MARP process?

If mortgage states we can take a 3 month break why cant we take it while the house is in negative equity, makes no sense to me.

I must reiterate there are no arrears yet on the mortgage and have been making all payments


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## wbbs (28 Oct 2011)

Because if you take a payment break your debt goes up so the negative equity situation is worse.   Why not take interest only and apply for mortgage interest supplement, you will have to pay a small contribution yourself as well but it will at least keep the debt amount level.


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## misterk (28 Oct 2011)

if you look above at the figures i am in receipt of MIS mortgage interest supplement and the interest only option still comes in at 1100


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## wbbs (28 Oct 2011)

Sorry, didn't remember what I read earlier.


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## ClubMan (28 Oct 2011)

misterk said:


> If i do not have arrears why do i have to enter into the MARP process?


_MARP_ is slightly misnamed. It's for arrears and *pre*-arrears situations.


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## ClubMan (28 Oct 2011)

misterk said:


> if you look above at the figures i am in receipt of MIS mortgage interest supplement and the interest only option still comes in at 1100


As I said above this figure seems very odd and potentially wrong to me - at least I cannot reconcile it against the other details already posted. I cannot see how your interest only repayment is so high if you are getting _TRS _(and _MIS_?).


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## misterk (19 Nov 2011)

Update.

Got the letter yesterday from PTSB saying they are going to give me a 3 month moratorium happy days. 

Now gotta put the head down and clear as much debt as possible.

Only sting is when the mortgage restarts it goes up to 1348 ouch


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## ClubMan (19 Nov 2011)

I never understood your figures above and would reiterate the need to double check that you are claiming mortgage interest tax relief/_TRS_. A friend of mine had financial problems and I realised early on that they had never claimed this so the €1.5K backdated lump sum for one year and ongoing relief from then on made a big difference to the overall financial situation.


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## misterk (19 Nov 2011)

Had a look at revenue website but cannot see how it is calculated i know that the payment is approx 38 euro per month, does that figure increse or decrease?

Also should it change when you get married or stay at the single persons rate as there is only one borrower on the mortgage loan


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## ClubMan (19 Nov 2011)

I have no idea where the €38 figure comes from. It seems very low though. I have outlined my tentative calculations above. You need to make sure that you are claiming this and getting the appropriate amount. Maybe if you can post clearer details of the figures - e.g. from your mortgage and bank statements somebody might be able to figure it out? Or ask the bank what the capital/interest split is and how much _TRS _you are getting.

I don't know if you can claim the married _TRS _rate once you get married or if you need to put your spouse on the house deeds (unlikely) and/or mortgage deeds? I would have expected this to be clarified on the _Revenue _website.


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