Going interest only - possible with arrears?

Just reading on other threads that you can simply tell the bank you are going interest only and that is that. Just wondering would the same apply with arrears on the property?

It doesn't really apply at all in some ways, you can decide yourself to pay nothing more than the interest amount each month but it would be better if the bank agreed to it. The arrears don't really matter and are probably in your favour as the bank is more inclined to agree to interest only if it is obvious you cannot pay the full amount as presumably you can't or you wouldn't be in arrears. Ask them for interest only, if they don't agree then you must decide if you are going to make the decision for them, just deciding to do it yourself does not change it on their systems to that status.

Thanks for the response.

Spoke to bank, cannot go interest only as ex would need to agree to it and send in financial statement but he is refusing to even speak to them. Would anyone advise me to just send them a letter and tell them I am only going to pay the interest (740) and a further 60 off arrears? I currently pay 44p/m off arrears with a mortgage of 1061 on top of that. Will it look bad for me in court when looking for home in the divorce that I went interest only for a time?

Just an update, my ex finally relented and sent them a financial statement. We are due in court this month over the divorce. What difference will it make that he has finally sent in a statement to them? He still wants the house sold regardless of the fact that his disposable income is substantial right now. He is still not paying for any of the mortgage.

There are two separate issues here.

The bank's attitude
If the bank sees that he can pay the mortgage, they will want him to do so. If you are paying it, then they won't care as long as they are getting their money. Continue as you are this month, but revisit after the court case.

The court's attitude
I can't advise on this. But I would hope that a judge would give more consideration to someone who has been paying the mortgage than to the person who have been refusing to cooperate.

This is one for your solicitor. What does she say?

You might ask a separate question about this in the askaboutlaw forum.

Brendan

The question of whether the banks will allow interest-only is somewhat academic because banks do not repossess properties where the debtor is paying at least the interest payments and where there are no arrears.

So whether the bank says it will not allow interest-only payments means very little in practise. They take them and do nothing else but huff and puff.

Indeed, according to yesterdays E.Herald only 10 - ten - properties were taken by the banks in the whole of Dublin -and in each case arrears had built up. (As I write this I doubt the veracity of the report. Can this really be the case - only ten?)

This does not mean things may change in the future but it appears that banks are almost desperate not to take anyone's properties -and if banks do go after anyone in the future surely it'll be some of the several thousand paying nothing.

One caveat - banks may not take one's property at present, but if one is on a tracker I the banks could put one on a higher interest rate-variable or fixed because one has breached the conditions of the loan-agrement.

I think Old Nick is absolutely right. Banks are not interested in repossessing houses at the moment and a number of reasons have been put forward including a legal problem with recent property legislation. The IMF have also noticed this and are putting gentle pressure on the banks to have this sorted out as soon as possible.

Can it be that the banks don't want to repossess houses as that is the time when they come face to face with their losses. Only time will tell.

I have finally got a meeting with the bank so going to discuss everything with them next week before the divorce case is heard.