heading for mortgage problems

M

monstie

Registered User
Messages
54
Hi,

I was wondering if anyone had advice regarding our mortgage situation. We have a mortgage of 330k on a house worth 280k.

We are paying €1341 per month on a tracker ecb+1%. We took out the mortgage in 2006(385k) and have never missed a payment. We were earning combined income of 80k until 2010. My wife lost her job in december 2010, so our income now is €25k. We have been paying off mortgage since then with a combination of savings and earnings but now the savings are getting low. I know we cant keep up these repayments for much longer. We have 2 kids(6 and 2) so one of us has to stay at home. What would be the best course of action to take from here)

Any help would be really appreciated
 
Further to my earlier post, this is a more detailed breakdown.

Personal and income details
Income self: 25000 self employment
Income history: Dropping each year since 2010
Income partner/spouse: 7500 from means tested s.w
Income history: lost job 2010 was on 48k
number of children 2
Amount of Mortgage Interest Supplement received
Home loan initially 385000
Lender: BOSI
Amount outstanding: 329000
Value of home: 28000
Interest rate: 1.75%(ECB +1%)
Monthly repayment 1341
Arrears 0

We have no other debts

Other savings and investments Canada life 10k, current account 5k


How important is retaining the family home to you?
Very important
.


Any other relevant information

What is your preferred realistic outcome?
Stay in our home but not at the expense of a half decent quality of life for our family and not leaving a mortgage for our kids to pay when were gone
 
The annual interest you are paying on your mortgage is around €6,000.

Your annual repayments are €16,000.

So you are currently reducing the mortgage by about €10,000 a year.

Have you approached Bank of Scotland?

You should be able to , temporarily,, switch to interest-only under the MARP.

When your wife returns to work, you could resume repayments.

But the key thing here is that your home is costing you €6,000 a year. You would not be able to rent anything similar for less than around €15,000 a year. So you have to take every possible step to keep it.

BoSI are anxious to leave the Irish market as quickly as possible and so may encourage you to sell your home and may offer you a deal if you do so. For example, they may offer to write off the shortfall if you sell the house for €280,000. That would be a nominal gain of €50,000 for you but then you would have to find new accommodation which would be a lot less attractive than your present home.

What are your wife's employment prospects?

If you are making only €25,000 as a self-employed person, would you be better off looking for salaried employment?

Finally, what is the Canada Life policy of €10k? Are you still contributing to it? If so, you should probably stop assuming there are no charges for doing so? Can you cash it? Right now your priority is to keep your home and if you have to use your €15k savings to keep your home for a further year, you should do so. Your wife may get employment in the meantime.
 
You must log in or register to reply here.
Back
Top