Mortgage for downsize

U

unstacked

Registered User
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Need advice.
Divorced this year. House signed over to me.
I want to downsize. Have reached sale agreed on my PPR and have sale agreed on my next smaller home. Using profit from sale would need 72K to buy ( after I clear current mortgage)...and approx 75 to renovate.
My credit rating isn't great due to not being able to meet the PPR >2000k pm mortgage payments when the % rates rose. I am in a payment agreement.
I will and want to fully clear my mortgage but am petrified I won't get a smaller mortgage now to buy....sick with worry
 
Have you applied for the €72K anywhere?
What happened?
I'm surprised that you're sale agreed on a purchase without funding or at least approval in principle in place.
What are the details of your outstanding debts?
You might get better feedback if you do a Money Makeover post.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
 
ClubMan said:
Have you applied for the €72K anywhere?
What happened?
I'm surprised that you're sale agreed on a purchase without funding or at least approval in principle in place.
What are the details of your outstanding debts?
You might get better feedback if you do a Money Makeover post.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
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Tracker AIB...old UB mortgage.
Have not applied anywhere as think I'll be turned down. Sent a proposal to Aib 2mths ago about downsizing, clearing my mortgage but needing help with much smaller mortgage in it's place. Still waiting for a reply. Credit Union turned applucation down..as they needed 12mths clear mortgage payments showing and no arrears. I will fully clear my mortgage and my arrears with the profit.
No debts other than mortgage and 1500 credit union loan...
 
unstacked said:
Tracker AIB...old UB mortgage.
Have not applied anywhere as think I'll be turned down. Sent a proposal to Aib 2mths ago about downsizing, clearing my mortgage but needing help with much smaller mortgage in it's place. Still waiting for a reply.
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Sounds like this may be your only hope - i.e. that AIB as your existing lender faciliate the downsizing move and cleaing the old loan/arrears. I doubt that any other lender will lend to you in the circumstances. Obviously the CU already declined you. Seems a bit mad to go sale agreed without funding guaranteed though.
 
ClubMan said:
Sounds like this may be your only hope - i.e. that AIB as your existing lender faciliate the downsizing move and cleaing the old loan/arrears. I doubt that any other lender will lend to you in the circumstances. Obviously the CU already declined you.
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They did for secured loan
But might look at renovation costs in new year. My divorce decree says I have to get ex name off mortgage....this is only way...and I want a clean slate, much smaller mortgage.
Do they normally consider these proposals?
 
Have you the income to support the total borrowing you need? If so then possibly AIB might facilitate you as in theory the missed payments could be blamed on marriage breakup and subsequent rate increases rather than just an irresponsible attitude to debt! You'd need someone in AIB making a case for you to the underwriters to approve a lower amount than you have outstanding at the moment. However the renovations may then become a problem, be better off if you could to borrow the total pp+renovation amount on the mortgage if they will give it and hold back 75k of the profit from sale for renovations IF the figures stack up income/profit/value wise.
 
Monbretia said:
Have you the income to support the total borrowing you need? If so then possibly AIB might facilitate you as in theory the missed payments could be blamed on marriage breakup and subsequent rate increases rather than just an irresponsible attitude to debt! You'd need someone in AIB making a case for you to the underwriters to approve a lower amount than you have outstanding at the moment. However the renovations may then become a problem, be better off if you could to borrow the total pp+renovation amount on the mortgage if they will give it and hold back 75k of the profit from sale for renovations IF the figures stack up income/profit/value wise.
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Thanks Monbretia. I couldn't fix the rates from June 22 onwards as needed the ex signature, he wasn't to be found anywhere. I had cleared all arrears on it prior to June, and had over 12mths full payments made, then the pm payment steadily rose to over 2,200pm. Besides that..I am trying to do right thing, it's the last bit of the plan..
Yes I did it backwards....but I thought it better to go to AIB proactively...showing I had my house ready and a buyer for much more than what was owed etc.. ..
 
Monbretia said:
Have you the income to support the total borrowing you need? If so then possibly AIB might facilitate you as in theory the missed payments could be blamed on marriage breakup and subsequent rate increases rather than just an irresponsible attitude to debt! You'd need someone in AIB making a case for you to the underwriters to approve a lower amount than you have outstanding at the moment. However the renovations may then become a problem, be better off if you could to borrow the total pp+renovation amount on the mortgage if they will give it and hold back 75k of the profit from sale for renovations IF the figures stack up income/profit/value wise.
Click to expand...
I can afford up to 950 per month if I had to.
Need 72k to buy. 80k to renovate. 6k fees. Have 45k worth of shares I could cash in. I would throw as much cash as I could against it to reduce my mortgage
 
It all depends though what the banks affordability calculations say you can pay rather than what you think you can pay. I would try, assuming value of new house is enough, borrowing the 72+80 now and holding back the profit. Might be handy if you put up the actual value of existing house/outstanding mtg/cost of new house. A very proactive loans advisor in AIB who believes in the proposal is what you need! Scarce as hens teeth I'd say these days!

If they don't approve you for that then you can apply for the 72k and maybe when you need the renovations you can sell the shares and you might at that stage get the balance from CU
 
Are you in the formal Mortgage Arrears Resolution Process?

My understanding of it is that if someone is struggling with a €400k mortgage on a €700k house and they want to trade down to a €200k mortgage on a €500k house, the current lender would facilitate them.

But you would need AIB's agreement before selling your own or buying the new one. If AIB gets a troublesome €400k mortgage cleared and the borrower then applies for a €200k mortgage, they will decline.

But if someone says "I can't afford €400k but could afford €200k" they would probably agree to this as it reduces their bad loans.

Brendan
 
unstacked said:
I can afford up to 950 per month if I had to.
Need 72k to buy. 80k to renovate. 6k fees. Have 45k worth of shares I could cash in. I would throw as much cash as I could against it to reduce my mortgage
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This is why, in my opinion, you really need to do a Money Makeover - adding key information like this in dribs and drabs isn't conducive to helping others to offer useful advice.

So you actually need to borrow €158K and not €72K? Or €113K if you liquidate your shares?

Why were you sitting on €45K in shares when this money could've been used to deal with your mortgage difficulties?
 
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unstacked said:
I can afford up to 950 per month if I had to.
Need 72k to buy. 80k to renovate. 6k fees. Have 45k worth of shares I could cash in. I would throw as much cash as I could against it to reduce my mortgage
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How much equity do you have in your home? Where in the country are you?

My instinct is use the equity and the €45k to buy a smaller home with no mortgage if you can and start saving instead of repaying a mortgage.

After 5 years your CCR disappears and you can look at getting getting a mortgage combined with your savings to trade up.
 
Monbretia said:
It all depends though what the banks affordability calculations say you can pay rather than what you think you can pay. I would try, assuming value of new house is enough, borrowing the 72+80 now and holding back the profit. Might be handy if you put up the actual value of existing house/outstanding mtg/cost of new house. A very proactive loans advisor in AIB who believes in the proposal is what you need! Scarce as hens teeth I'd say these days!

If they don't approve you for that then you can apply for the 72k and maybe when you need the renovations you can sell the shares and you might at that stage get the balance
Click to expand...

ClubMan said:
This is why, in my opinion, you really need to do a Money Makeover - adding key information like this in dribs and drabs isn't conducive to helping others to offer useful advice.

So you actually need to borrow €158K and not €72K? Or €113K if you liquidate your shares?

Why were you sitting on €45K in shares when this money could've been used to deal with your mortgage difficulties?
Click to expand...
 
Alot going on this year ....divorce was my primary focus Clubman.

House cost in region of 290k
Have 213k profit from sale of PPR
Less 25K Savings
Less 45k shares
7K needed to purchase

Renovations are in region of 80k
Less Vacant Property Grant 50k....
( yes I know this isn't guaranteed.)..
 
unstacked said:
Alot going on this year ....divorce was my primary focus Clubman.

House cost in region of 290k
Have 213k profit from sale of PPR
Less 25K Savings
Less 45k shares
7K needed to purchase

Renovations are in region of 80k
Less Vacant Property Grant 50k....
( yes I know this isn't guaranteed.)..
Click to expand...
I'd get a €10k loan to get the house in the first place.

Then see about a grant-assisted renovation, for which you should be able to get a low cost unsecured retrofit loan.
 
unstacked said:
House cost in region of 290k
Click to expand...
Which house?
The one that you're hoping to downsize to?
Or your PPR?
unstacked said:
Have 213k profit from sale of PPR
Less 25K Savings
Less 45k shares
7K needed to purchase
Click to expand...
I'm confused. Where did the original €72K figure come in?
And where did €25K in savings suddenly come from?
unstacked said:
Renovations are in region of 80k
Click to expand...
And this was €75K in the first post.

The whole thread is very confusing.
As I keep saying, a Money Makeover post with all relevant and accurate information in one post would make it much easier for people to offer feedback.
 
ClubMan said:
Which house?
The one that you're hoping to downsize to?
Or your PPR?

I'm confused. Where did the original €72K figure come in?
And where did €25K in savings suddenly come from?

And this was €75K in the first post.

The whole thread is very confusing.
As I keep saying, a Money Makeover post with all relevant and accurate information in one post would make it much easier for people to offer feedback.
Click to expand...
Will do this.
 
What is your plan in terms of housing when the house is being renovated? Did you get the renovation professionally costed? As noted above, the cost changed between posts. Can the house be lived in without the renovation as an 80k renovation is quite substantial? Is part of this renovation a nice to have or is everything needed in the short term. I think that while downsizing is perhaps the best option, the way you have been tackling it is somewhat irrational. You created difficulties for yourself in the long run going into arrear with 70k savings, you have put your house for sell and are also sale agreed without having an agreement and a clear plan on how to get the money needed. The amounts you need to borrowed varied from 147 to now less than 100. If I was the buyer or the seller involved, I would run away fairly promptly.
 
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