Negative equity and education costs

F

floyd

Guest
Hi,
I have recently started paying principal and interest on 2 properties I have on tracker mortgage. The repayments have more than doubled and rents are down on both by 20%. Aib have refused an extension of the interest only period but since I have other properties with only 4-5 years left to pay off , I have requested interest only on those for a few years to cover 3rd level education costs. I have always had an excellent relationship with the bank and 4 weeks have passed and I have not received an answer on this request. I will be faced with USC and a big tax bill at the end of the year so I am trying to get a few years breathing space until the children are educated.
I do not have a mortgage on my home and I would sell a property if it were possible but seems nothing is moving at the moment.
Any advice would be greatly appreciated.
 
Have you met face-to-face with an advisor from the bank? I often find it's more difficult to deal with banks over the phone. Seems easier for them to reject your request, or put them on the long finger.

Have you reviewed other outgoings that you may be spending too much money on? Shopping around for insurance, etc. I am assuming you have substantial life insurance cover on all of your borrowings, so it might be worth reviewing those, with the goal of cutting costs (if you feel you need to)

You may be able to claim tax relief off any losses through your rental income also, which will help.

J
 
floyd said:
. I have always had an excellent relationship with the bank and 4 weeks have passed and I have not received an answer on this request..
Click to expand...

You're only a number to a bank and that's all you ever will be. Why don't you pop into the bank manager for a chat. But bear in mind the bank doesn't care about you wanting to educate your children.
 
I have shopped around for house insurance and got it down substantially. I probably need to revisit life cover - I have met with the bank manager but he says its out of his hands as business banking takes care of my accounts. I have also contacted them and they say they are waiting for home mortgages to give them an answer... they are up to their eyes in work as so many people are in difficulty right now.
On the other hand a friend of mine went to the bank with his accountant and showed them the new figures on business - dropped back to interest only for the moment as there just isn't enough to pay principal as well. His advice to me has been to get tougher with the bank and tell them to take it or leave it! I want to pay back what I owe as this has always been my policy.
 
You can't actually do what your friend did. Banks aren't stupid. He couldn't pay the mortgage so the bank was realistic. He backed it up with a professional, an accountant, bank would have looked at the figures, in those particular circumstances they agreed, but only because it made sense to them. You can't make people pay who don't have the money and the bank doesn't want the property themselves.

In your case you don't want to pay because you prefer to pay for education costs. It makes perfect sense to you but it won't to a bank. Don't think about what you want, think about what the bank wants. So if I were you I'd be proving I couldn't afford the mortgages, same as your friend. How you do that, well you'll have to do your best on the figures and maybe just maybe you don't have your savings with the same bank so they don't know about them etc.
 
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