Interest only period almost up..advice on proposal to bank

Folks

Nora took this thread off topic with a story of her own/.

Please don't reply to such posts. I have deleted her post and the responses.

Brendan
 
Jizzy said:
We are not anticipating any favours from the bank and don't expect to be bailed out, .
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Well it looks to me based on what you posted that is exactly what you want.

Is the 3K on credit card spend in the opening post an error.

You are not willing to forgo lifestyle to fund your purchases, is that correct?

Where on earth is all your income going.

Income 7260, and mortgage of 2200 = 5060 to live on.

Investment 1. Rent 1400 less 770 + 66 + 250 + 116 = 1202. Excess 198

Investment 2. Rent 950 less 170 + 41 + 250 = 461. Excess 489

So on top of your 5060 you are getting income from the rentals of 687 Euro. I'm absolutely amazed the bank have even accommodated you thus far. You're not even paying that excess to them and you're not paying them a penny out of the income of 5060.

If the bank appoints a rent receiver you will be in really big trouble. You'll end up in a far worse situation, and when they get around to you, they have your lovely fat salary to take and you will be forced to an income of 1800 a month.

Maybe that's why they haven't bothered with you up to now, they know your income and the bigger the mess you're digger yourself into they will get everything back.

What exactly is the term of each mortgage, the actual interest rate, and were they originally interest only etc. How did the low payment of 170 Euro on Investment property 2 come about. A rough idea of your ages would also be helpful.

Do you have any savings?
 
" The Reasonable Living Expenses for a family of 4 with one car are €1,800 per month. " Quote, Brendan Burgess.

I've seen internal bank documents recommending a family of four live off 3000 euro per month.

Remember, some of your monthly expenses are property related (BTL's, insurance, management fees, Tax etc)

Best of luck in restructuring your loans. Unfortunately the banks only take notice of your situation when you're in arrears. They're snowed under at the minute.

My advice, protect the family home at all costs (and the tracker). Let the BTL's go into arrears. Write to the bank with a genuine proposal, meanwhile organise your monthly expenses to fall within 3000 euro per month.

The banks are doing deals. Remember there is already a bad debt provision in place for you negative equity.

Whatever you decide, best of luck.
 
Springsteen said:
"

Remember, some of your monthly expenses are property related (BTL's, insurance, management fees, Tax etc)

.
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Even with all that deducted the OP is taking money from the rentals.

I think it's very dangerous advice to give someone on a high income the suggestion to default on the BTL's. Fair enough if she cannot afford them, but that does not seem to be the case.
 
Thanks Springsteen, thats my thought too....we wil protect our home at all costs & keep the tracker on it. With the BTL's we will come up with some proposal that is realistic for us. If BOI agree great if not then we will go into arrears and they can have the keys.
 
Bronte, I'm not advocating arrears as a solution, where appropriate its a negotiating tool. Let me clarify, I'm suggesting the Op allow 3000 living expenses (not including BTL property related costs) and then pay PPR full Capital and Interest. If there is money remaining pay what you can off the BTL's. If not go into arrears on BTL's. PPR is safer. Tracker is safer. The number crunching and negotiating will start with the BTL's, selling them, refinancing or forgiving residual debt.

My point about arrears is sad but true, the banks will not negotiate with you as long as your loans are performing. Why would they? In fairness to them they're too busy dealing with much worse cases day in day out. Its akin to ringing the insurance company to tell them a tree is about to fall on your house, they'll ask you to call back when it does!

If the Op genuinely cannot cover all debt, which i'm assuming is true, then arrears is inevitable. In that case use the arrears to your advantage if the banks wont negotiate.

Best of luck Jizzy
 
Springsteen, the ideal situation would be if they allow us go interest only on our home and cap & int on the rest...then there would be light at the end of the tunnel as we would breakeven & sell within 10 years. We have a few proposals ready. We will of course cut back but we will not live afraid to turn on the heat or elec. & compromise on our kids education. We have US passports so if things get too rough then we will leave Ireland.
 
Jizzy, int only on your PPR will improve cash flow. Deleveraging on the BTL's will reduce the negative equity. Capital appreciation will do the same, however, speculation is not the best practice in these scenarios. (we both read the same papers and yes poperty and rent are on the up!).

For your PPR, consider your age and the years remaining on the loan. At some stage you'll have to pay it off or sell.
 
Jizzy said:
. We will of course cut back but we will not live afraid to turn on the heat or elec. & compromise on our kids education. .
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What do you mean cut back, you've into your hand near on 8k a month, and you think cutting back means not having heat or electricity.

You really need to be very careful before you do anything drastic with the banks, they are most definitely going after people this year. So I'll once again advice you to not default on the BTL's as you'll get their backs up, and your worst case scenario of losing the two great trackers will be on the table, as will the appointment of rent receivers.

It is absolutley not simply a case of you defaulting and you giving them back the keys. With your income you should actually seek proper financial advice from someone who can negotiate for you.
 
No they won't write off the deficit....They may put a judgement on our house but there is no equity there either..........
 
Jizzy said:
No they won't write off the deficit....They may put a judgement on our house but there is no equity there either..........
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Do they not also have the option of applying to the court a judgement and then an installment order for any deficit? With your income they could probably get a significant installment?
 
Jizzy said:
If it goes that far, we'll be gone
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So much for you not being bailed out as per post 20. You can afford to pay, don't want to pay and want us taxpayers to pay if you decide to high tail it to America.
 
Policy of threatening to leave the country may not in practise prove to be that simple. i.e. with both parties on high levels of salary & assuming employed by Irish companies it would likely be difficult to re-locate & assume that both jobs and salaries could be easily replaced in the US. OP, you have received good advice in how to approach the banks and you are likely to have some level of flexibility if you co-operate with them. Given your financial position, I would not be hopeful of agreeing any write down of the balances outstanding!
 
Yes good advice received. Thank you all.
Bronte don't know why you are annoyed with me. The government created this situation. The tax payers are paying for the governments decision to bail out the banks.
They aren't interested in looking after the people only institutions. I have paid thousands in stamp duty & now hit with property tax. I pay huge amounts of PAYE. What has the government done for me? I'm on my own.
I'm signing off now. Good luck to all.
 
Jizzy said:
Yes good advice received. Thank you all.
Bronte don't know why you are annoyed with me. The government created this situation. The tax payers are paying for the governments decision to bail out the banks.
They aren't interested in looking after the people only institutions. I have paid thousands in stamp duty & now hit with property tax. I pay huge amounts of PAYE. What has the government done for me? I'm on my own.
I'm signing off now. Good luck to all.
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There is something funny here. Lets look at the figures. The properties are currently worth 850k and loans outstanding are 1160k. That suggests the properties were bought say 6 or 8 years ago, as many properties were.
How much did the properties cost? Say 1.3 million as you have been paying off capital on the PPR and may have had deposits on some / all of the properties.
Now lets look at your joint income, which is 84k a year. I assume that is net of taxes? Are all borrowings in joint names : lets assume they are?

What bank lent you 1.3 million when your income is only a tiny fraction of that. Interest rate, tracker rates now are much lower than they were say 5 or 8 years ago....I remember they fluctuated between 3 and 6 % approx then. At one stage (about 2007/8? ) they were 6%. , in which case interest only on your loans then would have been 78,000? And you were paying interest plus capital on your ppr? How did you survive? What bank approved that?

Best of luck in whatever you do anyway.
 
Jizzy said:
...
. The government created this situation.

The tax payers are paying for the governments decision to bail out the banks.
They aren't interested in looking after the people only institutions. .
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Hi Jizzy

I would be concerned that this way of thinking will reduce your chances of getting a deal.

The government did not create this situation on their own. In fact, you are primarily responsible for your predicament, because you borrowed heavily for a speculative investment.

This is not some academic argument. If you accept that you are the primarly cause of the problem, you will then accept that it really is up to you to solve the problem. If you are hoping that the goverment or the tax payer or the banks will bail out a speculative investor with a net income of €80,000 , it may prevent you from sorting this out directly yourself.
 
Hey Jizzy, We are in a similar position but have already re-emigrated back to USA as unable to find stable employment. I am curious to see how your situation worked out. Our mortgages reverted back to variable rate and we are now in arrears on both investment properties.
 
Springsteen said:
" The Reasonable Living Expenses for a family of 4 with one car are €1,800 per month. " Quote, Brendan Burgess.

I've seen internal bank documents recommending a family of four live off 3000 euro per month.
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I think that Brendan may be quoting the Insolvency Service of Ireland figures. The banks may have their own figures for "necessary expenditure". Certainly in the case of a single parent with one child plus car the ISI figure (I think it's about €1.3K) is lower than BoI's (€1.6K).
 
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