Moving back to the UK - house circa 120k in Neg Equity

[McNulty]

The title probably says it all. I have a house in East Meath which I bought for 310K in 2005. From going round agents today, there is no interest unless you're willing to go on the market at around €180k. It looks like work is drying up here for me, so I'm planning to head back to the UK with my family. We have space agreed at my folks place which is essentially rent free.

My plan is to rent out the house, from prices quoted, and including management, this will leave us a shortfall of around €300 per month off current mortgage which will be affordable. The current mortgage is PTSB tracker - ECB + 2.25. a

The real question is whether this qualifies to PTSB as a homeowner with issues and if I would qualify for a period of interest only? I do intend in paying back in full what I owe on the house in time and the UK is not an opportunity to 'leg it', I just think this is my best way to go. Any views or opinions, please share!

Thanks

Jim

 

[Bronte]

Options

You need to talk to your bank. The facts are that the worse you paint your circumstances that more the bank will listen and help. For example hiding your savings or all your income. If you are repaying your mortgage the bank doesn't want to know about you and will not do a deal.

Watch out if you are going to rent that you might lose your tracker. Check the small print of your contract, if it says the tracker only applies to home loans don't tell the bank you are renting. If they do eventually find out they will probably just move you onto the investment rate from them but that could be years hence.

You could simply apply for interest only right now as a worker and home owner struggling and then go to the UK and work it from there.

You can go bankrupt in the UK. Nothing wrong with that and completely legal.

Do not underestimate the costs of renting. You should do the figures based on 10 months rent. Don't forget there are all kinds of costs and tax too probably. You mention management fees, my advise is to get a family member to rent for you and pay them properly.

Another option is for you to tell the bank you are moving back to live with your parents in the UK and want to sell the house at a loss but that you want them to convert the negative equity into a loan (at the same terms as the mortgage) and that you will agree to repay it from the UK.

Negotiating with a bank can be difficult but it can be done. But you must think about it from the banks point of view. What do they want. What is best for them. Do your facts and figures.

Whatever you do decide in the interest of others let us know how you get on.

 

[McNulty]

Bronte

Thank you - I appreciate the response. I'm going in to meet PTSB on Tuesday and my first aim will be to ask for the interest only period. The move to the UK is a few months off so I'm being straight in asking for this now.

I will post back how I get on - I think we're a while off being able to do deals on what's left after a sale, but that might be the route in the future

Cheers

 

[McNulty]

Just a quick update on this. Including some detail as it might be useful when dealing with PTSB. Booked an appointment in branch and took in budgeting form.
Mortgage adviser in the branch was lovely - very down to earth. I found it quite embarassing talking about it - I'm in a relatively well paid job and haven't been the best with money, but she was sound - no judgement at all. Gave her the form then needed to send in current account statements and payslip. I did not mention the UK as an option at this stage.
Whizz forward two weeks and no word so I dropped her an email - response was basically saying that the mortgage restructuring department were querying the following

Have you tried to re-nogotiate your short term debt (I have a 20k personal loan with Ulster Bank - fixed payments)
Anyway, you have too much money left at the end of the month - why do you need interest only anyway

I went back clarifying I had tried to restructure short term but no joy and requested where they were seeing money at the end of the month as I wasn't. I've had a lot of extra expenses lately since Christmas - mainly Doctor and prescription bills (2 girls under 3), vets bills (Dogs now live with my parents) and tax, insurance and service on my car (10 years old - a vicious circle!).

I also stated that I was following the instructions from everywhere - if I think I will struggle to pay the mortgage then talk to the bank immediately. With the interest rate rise I will be struggling more. The other thing I stressed was to thank her for how helpful she was. It's clear they don't make the decisions in branch, so no point getting ratty with her - it's a tough job and she was certainly very professional.

Based on my response, she said she would appeal so I'm waiting to hear.

Now know I'm going to UK in September - the rental option is looking like it will nearly cost as much as leaving it empty - with the loss of TRS, potential to lose tracker (trying to check this out) and the overall hassle I might leave it for six months (I'll fortunately be rent free with my parents) and see what's happening early next year. Not ideal but will see.

Apologies for the longwinded post - it's been a long week!