Restructuring current home loan - increase the term

G

g05l

Guest
Question on the Income/Expenditure or (Standard Financial Statement form), the form for the bank in order to restructure the current home loan.

In the Section B: Your Monthly Income

- Is it good idea to put down room rent or leave it nil ? (as it is not guaranteed income, not sure what would be bank's approach in future, not ideal to rent-out the room - currently not renting out, rented out in the past 5 months, possibly again)

In the Section C: Monthly Household Expenditure

- In order to get our application for the loan extension approved, is it better to say truly that we are currently spending more than we are earning (as we are borrowing from family members).

Or

- Would it be better to fill the Expenditure part of the form ''within'' the income limits to ''present'' expenditure as a manageble expenditure?

The aim is to get bank to extend the current loan term by X amount of years and no other option is currently an option for us.

PM's welcome, please do not ask why such a route has been chosen by us.

Any specific questions please ask - will try to answer.


Loan/Mortgage: EUR350,000

Current Property Value: EUR 350,000 (in my opinion) or EUR200,000 (DAFT)

Current Loan term: 28 Years (down from 34 Years)

Planned extension: to 34 Years

Income: EUR35,000 p/a salary, room rent EUR 2000 p/a (not guaranteed)

Expenditure: above EUR35,000 p/a

Other Loans: personal loan EUR3k remaining over the next 3 years

Professional advice would be appreciated.
 
If you are unsure of the income, don't put it in.
Yes, give full details of your household expenditure. The BS/Bank will question any items that they may regard as excessive or unessential.
A formal extension of the term is unlikely, given that you are unlikely to meet the income criteria. However if your proposal for payment reduction is equivalent to full repayments on an extended loan to 34 years, the Bank are likely to agree to a temporary arrangement. This may run from 1 to 5 years depending on the institution. In reality, provided that you meet the new arrangement, an extension of the agreement upon expiry should be facilitated.
Ideally you should focus on clearing the external loans as quickly as possible, so ensure that you have an adequate level of residual funds (after HL repayments and household expenditure) to do this.
 
Any current banking staff (home loan department or loan restructuring department) who might give me insight on the process? (PM's welcome)
 
Note, that the above advice comes from current experience in the banking sector.
Don't put down more than you are earning. Just give straight details of current income and expenditure. The Banks have standard parameters of what is acceptable household expenditure based on family size etc.
Banks are currently not extending the term of facilities for those who have repayment difficulties. They do agree to reduced levels of repayments for a limited period. In some instances, when the borrowers have established a good track record in meeting the new repayments, they can formally extend the term after an initial test period of 2/3 years on the revised schedule.
 
It's effectively the same thing. i.e. reduced payments means a term extension, unless the borrower makes up for the period of reductions with increased in subsequent payments.
 
44brendan said:
It's effectively the same thing. i.e. reduced payments means a term extension, unless the borrower makes up for the period of reductions with increased in subsequent payments.
Click to expand...
yes I agree
 
So would I just put down what's in my bank statements and not in cash expenditure (as cash was from family).

I.e: Electricity, Gas, Internet, Refuse Chrgs, Food, House Insurance etc - these are within the limit and I would have leftover of about EUR300 - EUR500 in cash after the these monthly commitments.

As a result I understand you are saying that I would only put down the items which are on the bank stat's and I would leave the rest for sake of approval, am I right saying it?
 
Family loans are not income so no need to include them as such.
Put down all of your normal expenditure. No need to worry that the Bank will forensically examine your attements re each outlay. Unless the expense is unusual in nature or exceptionally large it will be accepted.
 
You must log in or register to reply here.
Back
Top