BSOI mortgage problem coming, need solutions/suggestions

D

DeniB

Registered User
Messages
3
Personal and income details
Income self: €40,000 public servant
Income history: salary has reduced by 25% (between reducing hours to reduce childcare costs and pay decreases etct) since getting mortgage and likely to decrease more with croke park II
Income partner/spouse: single parent
number of children: 1
Amount of Mortgage Interest Supplement received: none

Home loan
Lender: Bank of Scotland Ireland
Amount outstanding: €78k on one interest only mortgage. Due to be repaid in full in September. Secured on mothers house but I pay it. €198k on own home, which is currently rented out as had to move for work. I rent elsewhere.
Value of home: €100/€110k approx
Interest rate: tracker
Monthly repayment €113 on IO & €670 + €950 rent.
Amount in arrears: 0

Summary of discussions and agreements with the bank: none yet, looking for suggestions of where to start

Investment property -
Details above.
Monthly rent received: €740

Other loans and creditors
Credit Union: Loan of €11,000 against shares of €4,000

Other savings and investments
none

How important is retaining the family home to you?
I would like to keep it, but will get rid of it if it means I can get rid of the mortgage associated with it.


Any other relevant information
I know that when I took out my loan that it was a crazy situation so no negative comments needed. When I took out my mortgage I went through a broker who suggested taking out the two mortgages in order to meet the amount I required. The idea being that I could afford the repayments and by the time the interest only portion was due my house would have equity in it and I could refinance it all under the one mortgage. Sounded easy at the time and sounds completely ridiculous now, but I am where I am as they say.
And where I am now is exactly this:
The interest only portion secured on my mums house is due to be repaid in September and neither of us can afford to either pay it or refinance it.
While my rent currently covers most of the mortgage, I am paying tax on the income and as of next year I will have to pay PRSI on it also. This is all over and above what my rental income is.


What is your preferred realistic outcome?

I don’t know if it’s realistic to say I want to pay back all that I borrowed, when you look at the figures it just doesn’t add up. But that’s what I want to do.
What I want is to relieve the pressure and reduce the amount I have to pay out. I can’t continue to live with only just enough to get by, paying for a house for the next 30 years that I am not even living in and that is costing me more to not live in than if I did.
So I suppose what I’m looking for is suggestions/options that are available to me and how to go about it. Am I looking at restructuring and hoping things improve for me and I can pay it off in the future or am I better off looking to sell my house and look for some sort of write down. Or am I looking at having the interest only portion written off and continue with the main part of the mortgage. What is my first port of call, do I get back in touch with my broker or deal directly with BSOI?
 
Complex enough financial structure and you will need to both examine all the options and the consequences before deciding what course of action is best for you. You have 3 loans outstanding;
1. Mortgage; - You obviously don't need the house as a PDH. Selling it will consolidate the loss and on your current income, you have minimal capacity to make any inroads on this debt. The bank will not want to consilidate the potential loss at this time so their preffered option may be to kep you on IO repayment schedule. However, BoSI (Certus) are more proactive, in looking at long term solutions, so they may be prepared to agree to a voluntary sale of the property. If so you need to seriously consider doing so, but in return for a realistic option in respect of a write-down of the residual loan.
Mortgage on Mothers home; - They will be after their full pound of flesh on this loan. It is likely to be well-secured and no doubt your mother is a guarantor. You will need to look at an extension of the IO repayment option on this facility, pending some improvement in your financial position.
Credit Union Loan; - Only option here is to continue servicing the net amount. I.e. agree to some level of net-off of the share balance. Some CU's are reluctant to let you net down the savings amount against the loan facility, but given your financial position, you need to insist on this being done.
The net rent outflow also looks quite high. Given your income, you are unlikely to be in a position to service all of the required repaymants plus living expenses. Have you completed a full realistic monthly budget? If not, this is a good starting point, before any discussions with the Bank.
 
I think you need to clarify in your own mind what your problem is.

I suggest that your problem is that your monthly housing costs at €950 plus €200 to support the rental property is a bit high.

On the capital side you are reducing your indebtedness to the bank each year by about €4,500 (I am assuming the main part of the loan is capital and interest over 30 years). This is not on the whole a bad situation. I would suggest that you don't anything radical at the moment.

Are you due an pay increment in the next few years? Could you get a Saturday job? A small extra income could change you from being a bit behind each month to being a bit ahead. You could also let the CU whistle for its money some months.

As for the €78,000 loan, realistically from the both your point of view and the banks, this will continue at interest only for the foreseeable future. They may get heavy about demanding repayment, but there is unlikely to be anything they can do.

It seems to me you are going through a lean patch, you are not drowning, your best plan may be to sit tight and do nothing.
 

I totally disagree, if the mother has equity, which she most probably does, the bank may go after this.

OP why is your rent so high at 950? Seems an extraordinary amount for a single parent on 40K income? To your question about the broker, forget this, you need to contract the bank urgently to agree a solution.
 
Bronte if the bank is receiving interest on the €78,000 secured on the mothers home I strongly doubt that they will try to repossess it in the current climate.

I dont claim any expertise here, maybe banks are repossessing homes even where interest is being paid on the loan. But from my general reading of the press etc I don't think so.
 
bronte if the bank is receiving interest on the €78,000 secured on the mothers home i strongly doubt that they will try to repossess it in the current climate.
Click to expand...
+1.
 

You are correct that banks have not sought repossessions but that doesn't mean that they won't start, even where you are paying interest only. We have the central bank making big soundings about the fact banks are not sorting out the mortgage crisis. Europe is telling us to sort out the Dunne repossession lacuna. So my take is that one fine day the banks are going to start doing something.

OP has stated she is supposed to repay the capital on the mother's property in September. Maybe the bank will agree to extend the interest only, but I'm just pointing out that maybe they won't.

OP is paying 950 in rent, 113 in one mortgage, not sure how much towards the CU and has a 'surplus of 70 in rental income to cover, NPPR, repairs, tenancy voids and tax. It looks very tight to me.
 
morgages

where there is no questions of non re payments or falling behind in repayments,can a morgage be extended to age 80 or 90 at lower repayments.I undestand that age discrimination leglislation is reversing the rule of 70 years of age max.Anyone know anything about this.Obviously it would be benificial for both lenders and borrowers.dk.
 
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