Low salary with large mortgage. What will bank manager say?
- Thread starter Wishes
- Start date
Thanks Deeheg.
Latest so far; my mortgage provider are hell bent on finding out more information on the apartment in the UK. They are insisting I sell it. I have absolutely no problem in doing so if only I could find a buyer. The institution that funded the investment property are flabbergasted and feel that this is a very bad idea as I will be left with a large shortfall.
Latest so far; my mortgage provider are hell bent on finding out more information on the apartment in the UK. They are insisting I sell it. I have absolutely no problem in doing so if only I could find a buyer. The institution that funded the investment property are flabbergasted and feel that this is a very bad idea as I will be left with a large shortfall.
Brendan Burgess
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Hi Wishes
You said you had a "relatively small mortgage on the investment property".
How much is the property worth?
How much is the mortgage?
What is the rent?
Brendan
You said you had a "relatively small mortgage on the investment property".
How much is the property worth?
How much is the mortgage?
What is the rent?
Brendan
Hi Brendan,
The property is worth approximately 100K. The mortgage taken out was 150K. The repayments are 500 per month and the rent brought in is 500.
Some of the other investors that bought in the complex were lucky to sell but they sold at a loss.
My figures here are in euro not sterling. The mortgage was taken out with an Irish bank.
The property is worth approximately 100K. The mortgage taken out was 150K. The repayments are 500 per month and the rent brought in is 500.
Some of the other investors that bought in the complex were lucky to sell but they sold at a loss.
My figures here are in euro not sterling. The mortgage was taken out with an Irish bank.
Brendan Burgess
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I had assumed that when you said that the mortgage was relatively small, it was in relation to the value of the house.
I think you should ask the lender on your home, to get their own valuation on the investment property. It seems crazy to sell it.
Are you paying interest only on the investment? You should be.
I think you should ask the lender on your home, to get their own valuation on the investment property. It seems crazy to sell it.
Are you paying interest only on the investment? You should be.
That bank manager is very much less than helpful. I would call him on this. Firstly I'd want him to show me how you can achieve double the rent as he has such extensive knowledge of the very area your apartment is in. Amazing coincidence that he would be such an expert on market rentals there.
Your apartment in the UK is in negative equity, you would sell at a loss and have even more problems. Currently the UK property is not an issue as the rent is covering the mortgage there. Your mortgage lender in the UK is correct. Selling it or going interest only is of no help to you. I'd love to see the bank manager show you hard figures (in writing) how the savings by going interest only in the UK are going to be of benefit to you. What would that give you for goodness sake, 100 or 200 euro a month to do what, try and pay part of the mortgage on the Irish property. Nonsense.
I particularly don't like his attitude in practically calling you a liar in relation to your UK figures. Very disrespectful of your distressed situation.
I presume your Irish mortgage is on your home, the bank should either decide that they allow you to repay what you can afford or let you sell the house and let you repay the 100K in negative equity. Personally I'd prefer the second option as then you would have a definite target to work towards, but I realise most people are attached to their homes and don't see it like this. Without full facts and figures on all your financials it is very hard to give concrete advice.
I thought I would update this thread for anyone that is going through a similar situation.
I had been in relatively small arrears with my mortgage when I began this thread but my arrears have gotten worse since then as my mortgage provider only made a decision on my case two weeks ago.
After a full investigation to prove to them I am living hand to mouth they decided to put me on part interest only payment for a couple more months and will review my case then.
If I fail to meet payments and their criteria over the next couple of months they will issue legal proceedings against me.
I have to go back to mabs again and get them to lower my unsecured debt and also they have insisted the investment property must go. They said if the property sale makes a profit they want immediate access to the surplus funds. To be honest it will be a god send if the investment sells
I had been in relatively small arrears with my mortgage when I began this thread but my arrears have gotten worse since then as my mortgage provider only made a decision on my case two weeks ago.
After a full investigation to prove to them I am living hand to mouth they decided to put me on part interest only payment for a couple more months and will review my case then.
If I fail to meet payments and their criteria over the next couple of months they will issue legal proceedings against me.
I have to go back to mabs again and get them to lower my unsecured debt and also they have insisted the investment property must go. They said if the property sale makes a profit they want immediate access to the surplus funds. To be honest it will be a god send if the investment sells
Thanks MrDerp. Yes it looks like I am UK bound for the foreseeable. I hope to have interviews lined up over there in the coming weeks.
My main residence mortgage provider has insisted I place the investment mortgage up for sale. They got a valuer to value it and they said the apartment was worth a lot more than I initially said it was worth so I agreed to put it up for sale.
To cut a long story short the bank are now pressuring me by insisting if the apartment sells they want first access to the surplus cash to pay the arrears (which I 100% agree with) but they also want access to the full amount so I can pay off a large chunk of my mortgage. I still have 15 years left on my mortgage.
Can I stop them getting access to the full amount?
My main residence mortgage provider has insisted I place the investment mortgage up for sale. They got a valuer to value it and they said the apartment was worth a lot more than I initially said it was worth so I agreed to put it up for sale.
To cut a long story short the bank are now pressuring me by insisting if the apartment sells they want first access to the surplus cash to pay the arrears (which I 100% agree with) but they also want access to the full amount so I can pay off a large chunk of my mortgage. I still have 15 years left on my mortgage.
Can I stop them getting access to the full amount?
Brendan Burgess
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Hi Wishes
This is very unclear. Could you give us some actual numbers, although I appreciate some are guesses
Rough value of home:
Amount outstanding on home mortgage:
Rough value of investment property in UK
Amount outstanding on investment property in uk:
Amount due to other creditors:
According to an earlier post, the apartment is worth €100k. But you said that the mortgage taken out was €150k. How much is the mortgage now?
If have money to spare after selling the apartment, you have a legal obligation to pay off the arrears, but no more. Of course, you have a legal obligation to pay off your other creditors as well.
This makes little sense. Are they suggesting that you should use the proceeds to pay off the mortgage on your home and not pay off the investment mortgage? The mortgage on the investment property must be paid off first.
It is likely that the interest rate on your other creditors would be higher so arithmetically, it makes more sense, to pay them off first. However, you might reach an agreement with the bank.
It's a bit academic until you actually sell the property. Make sure that the proceeds of sale are not lodged to the bank where you have the mortgage so that you can retain control over the money.
Brendan
This is very unclear. Could you give us some actual numbers, although I appreciate some are guesses
Rough value of home:
Amount outstanding on home mortgage:
Rough value of investment property in UK
Amount outstanding on investment property in uk:
Amount due to other creditors:
According to an earlier post, the apartment is worth €100k. But you said that the mortgage taken out was €150k. How much is the mortgage now?
If have money to spare after selling the apartment, you have a legal obligation to pay off the arrears, but no more. Of course, you have a legal obligation to pay off your other creditors as well.
This makes little sense. Are they suggesting that you should use the proceeds to pay off the mortgage on your home and not pay off the investment mortgage? The mortgage on the investment property must be paid off first.
It is likely that the interest rate on your other creditors would be higher so arithmetically, it makes more sense, to pay them off first. However, you might reach an agreement with the bank.
It's a bit academic until you actually sell the property. Make sure that the proceeds of sale are not lodged to the bank where you have the mortgage so that you can retain control over the money.
Brendan
Hi Brendan,
This is all metaphorically speaking and I personally do not believe there will be a sale of the investment property unless I sell at a loss.
They want me to pay off the investment mortgage with the proposed sale proceeds and whatever surplus cash is left over they want me to pay the arrears and a chunk off my main residence mortgage before the full term is up. The bank manager told me if I did not do this then they would not be in a position to help me any further.
This is all metaphorically speaking and I personally do not believe there will be a sale of the investment property unless I sell at a loss.
They want me to pay off the investment mortgage with the proposed sale proceeds and whatever surplus cash is left over they want me to pay the arrears and a chunk off my main residence mortgage before the full term is up. The bank manager told me if I did not do this then they would not be in a position to help me any further.
Brendan Burgess
Founder
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Hi Wishes
That makes a bit more sense.
You should get a statement from the auctioneer you are using to sell your investment to say what steps he has taken to sell it and what offers you have received.
You use the expression "at a loss" which generally means selling it for less than you paid for it. This is no longer relevant. Will the proceeds exceed the current balance outstanding on the investment mortgage? That is all that matters.
You are under no legal obligation to pay off anything other than the arrears. However, against that, the lender is not obliged to do any deal with you. They must follow the Mortgage Arrears Code but that does not oblige them to do a deal.
I would think that it is reasonable to use any money left after paying off the arrears to pay off your other personal debt, which is more expensive. This is also a legal obligation whereas prepaying your mortgage is not a legal obligation.
But, as you say, it may be all a bit hypothetical. See what offer you get for the investment property before you negotiate further with the bank.
Brendan
That makes a bit more sense.
You should get a statement from the auctioneer you are using to sell your investment to say what steps he has taken to sell it and what offers you have received.
You use the expression "at a loss" which generally means selling it for less than you paid for it. This is no longer relevant. Will the proceeds exceed the current balance outstanding on the investment mortgage? That is all that matters.
You are under no legal obligation to pay off anything other than the arrears. However, against that, the lender is not obliged to do any deal with you. They must follow the Mortgage Arrears Code but that does not oblige them to do a deal.
I would think that it is reasonable to use any money left after paying off the arrears to pay off your other personal debt, which is more expensive. This is also a legal obligation whereas prepaying your mortgage is not a legal obligation.
But, as you say, it may be all a bit hypothetical. See what offer you get for the investment property before you negotiate further with the bank.
Brendan
Thanks Brendan and MrDerp.
Greta, the bank reschedueled my mortgage for another period of seven months. They refused to put this offer in writing but told me to just pay the agreed verbal amount.
The deal they came up with was to pay off a chunk of the mortgage and if I did that they would lenghten the rescheduel mortgage plan. If I don't play ball they will not lenghten it but will put me back on normal payments and eventually go for repossession if I fail to pay.
Greta, the bank reschedueled my mortgage for another period of seven months. They refused to put this offer in writing but told me to just pay the agreed verbal amount.
The deal they came up with was to pay off a chunk of the mortgage and if I did that they would lenghten the rescheduel mortgage plan. If I don't play ball they will not lenghten it but will put me back on normal payments and eventually go for repossession if I fail to pay.
Brendan Burgess
Founder
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Hi Wishes
Don't worry about it until you have sold the investment property. There is no point in getting into a fight over something that might not arise.
Brendan
Don't worry about it until you have sold the investment property. There is no point in getting into a fight over something that might not arise.
Brendan
Just an update on the this thread. I am in receipt of a letter from my bank stating that they will seek a repossession order on my home within the coming weeks if I do not put the UK property on the market. They also want to entwine the UK property into the original contract of my main residence stating that if the apartment were to sell at any giving time and there was a profit to be made from it that they would have first access to the funds.
Would you agree to such a clause being put into your home loan agreement?
Would you agree to such a clause being put into your home loan agreement?
This is exactly what is going on here. I am terrified to go against them as they will not do any deal with me.
partnership
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Do not agree to them having your investment proerty on your home. I thought Your principal residence cannot be touched for a period of 2 years as long as you are making efforts. Yes try to sell the investment property but do not be rushed into anything. You mentioned possibley moving to UK if so hand the banks the keys and let them try to sell the house. At least you will have your property in the uk.
Thanks Partnership. I spoke to them yesterday and told them I was not happy with the investment property being dragged into my loan agreement with them. They said if I was not seen to be complying it would go against me and they would no longer be in a position to negotiate with me further.
I have always thought that the conventional advice to people in difficulties with loans, that they should inform the bank of all their income/ outgoings and assets /liabilities was foolish.
If you cannot meet your obligations each month you should inform the bank of this, and in an honest fashion, but I see no reason why this OP should have told the bank about the UK property. ( he could have mentioned it here initally, but that is a different situation).
If the bank did not know of the UK property they could not pressurise him about it.
I had a somewhat similar situation some years ago, I wasn't making payments on a personal loan. I suggested that the bank give me a mortgage on an investment property (they were not previously aware of), the LTV would have been less than 50%, to pay off the personal loan.
The banks reaction was SELL IT and PAY US. They had no interest in whether this was the best option for me, their customer.
My advise is be very careful in giving the bank any specific information. You can tell them that you are unable to pay you dont have to prove that to them.
Tell them the truth certainly but keep the details to yourself.
If you cannot meet your obligations each month you should inform the bank of this, and in an honest fashion, but I see no reason why this OP should have told the bank about the UK property. ( he could have mentioned it here initally, but that is a different situation).
If the bank did not know of the UK property they could not pressurise him about it.
I had a somewhat similar situation some years ago, I wasn't making payments on a personal loan. I suggested that the bank give me a mortgage on an investment property (they were not previously aware of), the LTV would have been less than 50%, to pay off the personal loan.
The banks reaction was SELL IT and PAY US. They had no interest in whether this was the best option for me, their customer.
My advise is be very careful in giving the bank any specific information. You can tell them that you are unable to pay you dont have to prove that to them.
Tell them the truth certainly but keep the details to yourself.
O
ontheedge
Guest
Im in a similar boat....which bank are you dealing with ...Ulster?