# Can interest only mortgage be restructured



## mojo18 (5 Jan 2021)

Hi maybe someone could advise best solution for outcome.

Situation

Couple mix sixties interest only mortgage of 400,000 expires in 3 years. Security is on family home/asset rich cash poor.  Statement of Means/assets exceeds 400,000 due to Pepper. This debt was originally with Bank of Scotland.  Bearing in mind Bank of Scotland would/may have sold this debt for 25-30% to Pepper.  Am I correct in saying Pepper might accept 50% of debt?  It will be impossible for us to pay 400,000.


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## Brendan Burgess (5 Jan 2021)

How much is the house worth? 

What is the couple's income? 

Brendan


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## mojo18 (5 Jan 2021)

Brendan Burgess said:


> How much is the house worth?
> 
> What is the couple's income?
> 
> Brendan



500,000
Income approx 42000 total at present.


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## Ravima (6 Jan 2021)

Hi mojo, sorry to read of your predicament. I feat that Pepper will not have any interest in your proposal of 50% to clear. I have heard that if one wants to do deals like that, one should do them at the earliest opportunity,  before they get a chance to suss you out re assets and value of property.

 As things stand, you are still  €100K ahead, but will have lost the property. You might not want to read this, but you are in a better situation than most. 

How did you propose to clear the debt? What was the plan first day?  You took out an interest only loan for X years in the knowledge that it would have to be cleared in the one fell swoop. 

Don't give too much info lest it identify you.


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## NoRegretsCoyote (6 Jan 2021)

mojo18 said:


> Couple mix sixties interest only mortgage of 400,000 expires in 3 years. Security is on family home/asset rich cash poor.


So this is an IO mortgage for a second property secured on family home?

Or is the mortgage actually on the family home?


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## Brendan Burgess (6 Jan 2021)

This makes no sense.

You have a mortgage of €400k on a house worth €500k.

Why on earth would a lender give you a discount?   They lent you the money.  Now sell the house and pay it back when it is due. 


Brendan


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## Jim Stafford (7 Jan 2021)

You have not indicated the interest rate. Given that it was originally a BOSI mortgage the likelihood is that it is a tracker. The P & I payments on €400,000 with an interest rate of 1% over 20 years would be €1,839 a month. If you have pension income that could afford those mortgage payments then you could force Pepper to accept such a re-structure through a PIA. 

If your pension income is insufficient than you may have to consider generating income from a Rent a Room scheme.

In the meantime, you need to start saving as much as possible.

Jim Stafford


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## Brendan Burgess (7 Jan 2021)

Jim Stafford said:


> If you have pension income that could afford those mortgage payments then you could force Pepper to accept such a re-structure through a PIA.



Hi Jim

That is very interesting. 

So a borrower comes to the end of the mortgage term and still owes €400k.
He has a house worth €500k 

He can sell the house and repay the loan.

But the courts would intervene and tell the lender to extend the loan? 

No wonder we have the highest mortgage rates in the eurozone.

Brendan


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## NoRegretsCoyote (7 Jan 2021)

Brendan Burgess said:


> So a borrower comes to the end of the mortgage term and still owes €400k.
> He has a house worth €500k



It's not clear if this is their PPR or not though.

My understanding is that IO mortgages were only given for BTLs, but open to correction.


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## Jim Stafford (7 Jan 2021)

Brendan Burgess said:


> But the courts would intervene and tell the lender to extend the loan?


The whole thrust of the PIA is to keep people in their family homes. Provided the lender is not "_unfairly prejudiced_" by the PIA the court will approve it. 

Jim Stafford


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## mojo18 (7 Jan 2021)

Brendan Burgess said:


> Hi Jim
> 
> That is very interesting.
> 
> ...



Initially the 400k was borrowed from BOSI who sold it to Pepper (vulture fund ) for a fraction of this 400K.  Would it not be reasonable to suggest that they would grab 200k to leave this elderly couple in their family home rather than fight for further 10 years or so.  Surely they would agree rather than put old couple on street.


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## mojo18 (7 Jan 2021)

Brendan Burgess said:


> This makes no sense.
> 
> You have a mortgage of €400k on a house worth €500k.
> 
> ...



Harsh reply I thought you might have a business suggestion on how best to deal with it.  Maybe restructuring with family member involved would be possible.


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## vandriver (7 Jan 2021)

What was the original plan to clear the 400k and why is that not possible in 3 years?


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## NoRegretsCoyote (7 Jan 2021)

mojo18 said:


> elderly couple in their family home



It wasn't clear to me or other posters that it was the family home.



mojo18 said:


> from BOSI who sold it to Pepper (vulture fund ) for a fraction of this 400K.



This is completely irrelevant. Pepper bought a large number of mortgages, some performing better than others. The average discount was for the portfolio, not for the mortgage itself.


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## Brendan Burgess (7 Jan 2021)

mojo18 said:


> Harsh reply I thought you might have a business suggestion on how best to deal with it. Maybe restructuring with family member involved would be possible.



Not at all.

You don't want to pay your lawful debts when you can do so.

You want young mortgage holders to pay them for you by paying the highest mortgage rates in the eurozone. 

Brendan


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