Anyone have their arrears capitalised without asking?

Brendan Burgess

Brendan Burgess

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I have heard of a couple of cases recently where people have seen that their arrears have just disappeared. They weren't notified of it.

It's no problem to them, but it's a bid odd. I was wondering if it's widespread.

Brendan
 
Have 'actually' disappeared or are just showing on bank statements as part of the mortgage? My own don't show on a yearly statement, they show as part of the remaining balance but they are there, the interest is accruing and I am waiting on capitalisation at the moment. If I thought there was a simpler way I would be going that route so please enlighten if you can?
 
Hi Markswoman

The mortgage statement should show something like the following

Balance due: €127,000.

There should be a separate figure somewhere on the statement entitled "arrears" or "arrears balance". It may be a separate column e.g. Arrears balance: €7,000

The arrears balance is what is known as a "memo figure". It doesn't actually affect any calculation unless they charge penalty interest on the arrears figure.

In the above example, if you pay off the €7,000, it will wipe out the arrears balance and bring the balance on the loan account down to €120,000.

I have heard that some banks are just wiping out arrears. As I have said, this does not mean that the balance on the loan is changing.

Brendan
 
Interesting post Brendan. I agree with the bank that my arrears are my own fault however I have asked them if they can freeze for a time or at least look at deducting the interest part of the arrears off the full amount before capitalisation. I have a meeting with them next week in this regard.
 
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