Case study AIB won't extend tracker - partner in denial/depression

Hi Patrick

I am a bit confused.

A loan of €300k over 25 years at 1% would have monthly repayments of €1,130.
So it seems that the €1,180 repayments you are making are reasonable. The interest would be €250 a month and you are paying €900 capital off the mortgage every month. In the last two years, you have cleared the arrears and reduced the balance by €30k.

Over the next two years, you will have paid off a further €20k.

What is AIB looking for? Are they looking for higher repayments?

They might huff and puff. They might even issue legal proceedings. They might even get to a court. But no judge will give them an order for possession given the efforts you are making.

If you leave your wife, will you be able to get accommodation for less than €1,130?
How much rent would you get if you rented out your house?
Would you be able to get your wife to agree to rent out the house?

I think it's better to answer these questions first, and then I will address the other issues.

Brendan

Hi Brendan,

I am making a full repayments at the moment and I actually might have some small amount overpaid.
- just to clarify, I am currently not paying any more than the actual automatic repayment from account.

AIB is not actively looking for any higher repayments and I have cleared the arrears.

I might be able to get an accommodation for me for about €550-600 including utilities.
or another option is I leave and go abroad and find a job abroad (there is a prospect that my current employer might allow me to work from home).

I might be able to agree with wife that she stays with her family and I rent out the property.
I would be able to get €1,300-€1,400 in rent (before the tax).
Yes I would be able to get her to agree to rent out the house (not sure if she will ask me to pay her to do that).

Patrick (tired)

OK, so you have an up to date tracker loan. You are not looking for advice on further rescheduling. Well done on getting it in order.


- can i rent out this property without penalty such as a interest rate increase?

You could rent it now and AIB wouldn't do anything about it. It is not their policy to take tracker from people who rent out their houses.

I am not sure if it's a good idea. It wouldn't improve your finances in any way.



So there is no point in renting it out, unless you move abroad and have to rent it out.

If you split from your wife, you could rent a room tax-free.



- what happens if i get a divorce?

The judge might rule that you get sole ownership of the house. But he might also rule that you stay in it and continue paying the mortgage, but she continues to own half of it.

He might also rule that the house is sold and then you would end up owing the mortgage shortfall, with nothing to show for it.


- if i manage to remove her from the mortgage, am i gonna get this house repossessed as me being only one person on the mortgage?

You will not be able to remove her from the mortgage. The bank must agree, and they won't do so.



- can i draft a legal agreement with her and buy off her share in the property? I have some savings (not much, maybe 7k at the moment).

You could do a side agreement where you take responsibility for her share of the property and her share of the mortgage. But it might be difficult to enforce. She would remain liable for the mortgage.

I think that what you have achieved here is fantastic. No arrears, and 7k in savings!! The biggest challenge appears to be your marriage and your wife's mental health issues. Is marriage counselling an option? I also think that you need to consult a family law solicitor. Not necessarily for a divorce, but to see how best to protect your own interests. You must look after yourself first, you are no use to anybody if your own physical or mental health deteriorates with this stress. Might also be worth considering counselling, just for yourself, a depressed and abusive partner can be very difficult to cope with alone. Best wishes.

hello again, i would need ask for help here. Perhaps if here is an affordable solicitor available i would need to obtain contact details, i feel i may need support.

I continue to make full repayments on my own. I received message from my spouse that she thinks we need a divorce which she says i need and she might need in future. Nevertheless I would like to sort out situation with the property.

Question which comes to my mind is: would bank oppose me to take full ownership of situation claiming affordability could be an issue? I'm worried to call to bank to ask about this, however this is the case that I am fully cooperating in terms of what has been previously agreed and I continue with mortgage by taking care of all repayments on my own since day one - this I can prove).

Could someone please walk me through to meet experienced professional who could help here?

financial circumstances update:
Personal and income details
Net 34,000 (after tax) Income self: public company
Income history: employed in past 7 years
Net income partner/spouse: NIL (self employed for past 7 years, nil income - not actively trading) no social welfare (unable to know if eligible), spouse got into depression after being made redundant. Not willing to apply for social welfare.
Income history:
number of children: none
Amount of Mortgage Interest Supplement received: none

Home loan
Lender: AIB
Amount outstanding: 285,000
Value of home: ? (275,000-285,000 as per daft)
Interest rate: specify whether tracker or SVR or fixed rate: Tracker
Monthly repayment: 1,150 (the ECB interest rates are low now)
Amount in arrears: 0.00


Patrick

Hi Patrick

Have you separated from your wife at this stage? In other words, are you living apart?

If so, how is she supporting herself?

I think that AIB will be reluctant to allow her to take her name off the mortgage. If your salary is €60k, you would be borrowing almost 5 times that .

If your wife is not cooperating, then there isn't much you can do. While it would be nice to sort this out and terminate your involvement with her, you cannot afford to give up your cheap tracker. So I suspect that the answer will be, just keep on as you are going.



Brendan

Hi Brendan,

We have not officially separated.

She just stays recently with her family a lot saying she is not well (i believe she does some part time hours, but i don't have any visibility to that, i work a lot and am pretty much all day out in town at work).

my salary is €40k (gross)

i would like to not become a fool at the end of this whole thing. Would asking court to remove her from deeds force me to be removed from the tracker?

regarding affordability, does it matter whether i have repaid mortgage by myself from day one (I afforded to do so) and that my annual income x5 is €200k vs €275k/€285k (estimated value of the property)? i would have thought that €1,15k x 12 = €13,8k (annual cost of mortgage repayments) is still below €34k, making me thinking that i can afford the mortgage. €34k is a yearly amount which i receive after tax

maybe i am wrong with all above,

Patrick

patrick43 said:

i would like to not become a fool at the end of this whole thing.

maybe i am wrong with all above,

Click to expand...

Patrick I think it is time for you to sell the house and divorce. I think it's absolutely amazing what you have put up with and what you have achieved. It is time for a clean break and the only way to do this is to sell, divorce and go your separate way.

I am responding based on what I've read of your years of this and in particular the two questions I've quoted above.

Is there a particular reason you want to hold onto this house? Because it seems like a noose around your neck and it's tying you to your long gone spouse if you ask me . You are not in zero NE, so the timing couldn't be better. I'd also advise you to go the full hog and go abroad. Make a mint, see the world, forget the decade of hell and come back to retire with a nest egg to buy somewhere small. Also perhaps there is another possibility yet for you to meet someone else. But with baggage, the house and your spouse, this will just drag on and on and on.

patrick43 said:

i would like to not become a fool at the end of this whole thing. Would asking court to remove her from deeds force me to be removed from the tracker?

Click to expand...

As part of a separation agreement, the court could order that her name be taken off the deeds, but this would be as part of a much broader settlement agreement.

The court cannot order that her name be taken off the mortgage. They cannot interfere with a contract between the lender and the two of you. (Some courts do make such orders, but they have no validity.)

This house is not a noose around your neck. You have a mortgage of €285,000 on a cheap tracker, so the interest is costing you around €250 a month. Yes, your accommodation is costing you €250 a month. You are paying €1,150 but the other €900 is paying down the capital, so it's a form of savings.

Even if the court ruled that you were to continue paying the mortgage and she was to continue owning half of the equity, it would still be a good deal for you.

She has asked for a divorce. Strike while the iron is hot and try to do a deal now. While there is no equity in the house, she might walk away. If you wait for 5 years, there will be about €50k paid off the mortgage and she might demand, and a judge might order, and Bronte might applaud, that the house be sold and the equity split in half.

Brendan

Why would I applaud if the equity was split in half. It's clear to me he's paid the equity. From the beginning. But courts in these circumstances are liable to do anything. So he's at the beck and call of the bank, the courts, and his ex. One sure way of getting out of this is selling. Then they can all whistle dixie. He's a free man. But if he keeps his head in the sand and keeps going he may not own the house that he paid for himself.

My main point being, despite the great tracker, and you know I love property, some times it's better to walk away and start with a clean sheet. And this case seems to me to be one of them.

this might be important:

marriage took place abroad (other EU state)
i may be able to get divorce abroad (it would take up to 12 months from what I have heard from the local government offices abroad, however I believe local judge may not deal with property which is based in Ireland (actually i am not even sure whether to mention Irish property in the application for divorce as it may cause the whole process to delay or not be dealt with if there is property involved - i could be incorrect here, these are just my thoughts)).

would getting divorce abroad cause an interference to the situation with the house here on my soil?

@Brendan, when you mention 'strike', do you mean file for a divorce or to start conversation to offer her money to sign something?

Patrick

The issue is that you are validly married, that you both live in Ireland and that the property is in Ireland. It will be an Irish court deciding on who gets what. And in my experience, despite what spouses have or have not contributed, with someone in mental ill health, judges are likely to do anything. I want you to think about being in postive equity of 200K and your ex being entitled to half.

There was a court case in Ireland, after a divorce, after the spouse (wife) had spent all that she was given, was still entitled to come back for more. (just saying) She was ill and needed care (something along those lines).

Is there a reason, other than the great tracker to hold onto the house?

with my limited ability i will try to answer using my own thoughts and opinion:

B: - The issue is that you are validly married
P: - married in another state (I was born in that other eu state)

B: - that you both live in Ireland and that the property is in Ireland
P: - I work and live in Ireland (i might be able to go back there for at least 12 months and then apply for a divorce from there), she is currently outside of the eu

B: - It will be an Irish court deciding on who gets what
P: - i guess so, yet would getting divorce in other eu state cause any issues with the above process of Irish court deciding on who gets what?

B: - I want you to think about being in postive equity of 200K and your ex being entitled to half.
P: - i am taking this thinking into consideration (this is why i'm here), yet it is totally unfair, i could also say i am ill and do what she did

B: - Is there a reason, other than the great tracker to hold onto the house?
P: - years of care put into the place, it is my first house and i put a lot into this - it feels unfair to give it up just because she turned away and because local law might not fully see or recognize all of the aspects in this situation

apologies for being too direct in my above answers

Patrick

Bronte said:

Is there a reason, other than the great tracker to hold onto the house?

Click to expand...

With respect: that is like asking someone, "Is there a reason, other than the fact you have a salary, that you work?"

He has a house which he likes for €300 a month rent.

Brendan

Patrick

It's clear that you should hold onto your house. You like it and it's astonishingly cheap.

It's clear that you should discuss with your wife finishing your marriage, as that is what you both want.

You will need to talk to a solicitor about how to achieve both of these issues given the complexity of the situation.

Brendan

Brendan

Is it allowed on this site to receive pm with a solicitor contact details? if no, where could i look for an experienced and reasonable solicitor?

Patrick

Patrick yes you can receive the name of a solicitor by PM. You can even start a thread looking for this information. One of the best solicitors is actually on this website. Poster Vanilla - she knows her stuff. And you really need a good solicitor experienced in this area. You can also ask your work mates, anyone who had a solicitor for a divorce/property issues that they can recommend to you.

You've done really well to get to this point. You are an inspiration to others. Depression is very very difficult to deal with. Best of luck.

it is people in this windy country that are an inspiration to keep going, i just do my job and am proud that i have one

Hi Guys,

Could you please help me to assess according to your knowledge whether divorce abroad would automatically means that I need to inform bank about my financial position and whether bank can force me to sale a property based on the fact that my current annual salary times 3 or times 3.5 would much less than the current mortgages is?

It is just hypothetically speaking or I am more contemplating about the divorce abroad. I don't necessarily want to divorce in Ireland as it will cost me significantly more: financially. Irish divorce will also deal with the property (which i don't necessarily want).

I agree, if my current spouse will return in future asking for her share, then fair enough, it will be then when i will need to deal with it.

My concern is: would banks have a right to force me out of property in the event of me being divorced abroad?


Patrick

I don't see how your marital status has any effect on your mortgage?

If you don't pay your mortgage, the bank can initiate legal proceedings against you for repossession. But in this country, they have little or no effect.

Brendan