Negative equity Trade Down Mortgage with AIB

R

rose bush

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I know that this is a new product but I would appreciate if anyone could give me any insights or advice before I approach my bank about the possibility of selling my home in Dublin which is in negative equity for a bigger cheaper house in a more rural area while maintaining my tracker mortgage.

· Firstly do you think it will be possible for me as we really only have 1 income and no savings?
· Will I need a deposit for new property?
· Is there any chance of the bank writing down any of the outstanding debt?
· How much would it cost approximately for auctioneer, solicitors, surveyors?
· Should I borrow money to pay my arrears before I approach the bank?
· Is there anything else I am not taking into account
Thank you

Personal and income details
Income self Net income- €33,000 per annum, public servant
Income history: Permanent for 4 years

Income spouse
nature of income: Self employed- €5000 per annum
Income history: He was made redundant 2 months after we got our mortgage, was unemployed for about 2 and a half years, then set up his own business about 2 years ago. He now minds our children during the week and works at the weekend.

Number of children 2- 2 years and 4 years
Amount of Mortgage Interest Supplement received- none

Home loanLender: AIB
Amount outstanding: €315,000
Value of home: €200,000
Interest rate: Tracker -
Monthly repayment - €970
Amount in arrears - €600

Other loans and creditors None
Other savings and investments None
Any other relevant information My partner's father (aged 63) is also on our mortgage as my job was not permanent at the time. He owns his own home and is retired and receiving a pension. He does not contribute to the mortgage. My income was not taken into account as I was not permanent
For 2 years we were in arrears of up to €4000 but have cleared most of this now
 
Your income is €40,000 gross, but you are paying almost €12,000 a year in mortgage repayments?

Are you in the Mortgage Arrears Resolution Process - MARP?

AIB is the only lender which is writing down debt, but it's very rare. They may well give you a split mortgage as you seem to be making great efforts to pay it.

As your father in law is a joint borrower, they will assess his income as well, and may decide that between the three of you, you do not need a restructure.

Are you trading down for financial reasons or for other reasons?
At the moment, your negative equity will evaporate if house prices rise by 50%. If you trade down to a house which costs €100k, you will need house prices to rise by 100%.
Will you not be farther from work? Have you factored in the cost of and time spent commuting?
 
Yes our joint income is €40,000 and our repayments are €12,000, do you think this is a high proportion of our income to be spending on a mortgage?. When I wrote my last thread our repayments were much higher and we were really struggling but I thought that after I read the reply from another poster that we were not badly off.

Yes I know we will have additional travel costs, we will have to buy a second car also. However I hope that within a year or 2 I can establish my own business in the new area.

We want to move for 3 reasons. 1_ for me to set up my own business, 2_ we need a bigger house and 3. To have cheaper mortgage repayments.

I don't know of it is MARP but we did talk to the bank a number of years ago and explained we were having difficulty making repayments and agreed to pay €80 a moth towards our arrears, in what the guy on the phone called an informal arrangement.
 
Just an update for anyone who is in a similar situation. I have tried to make an appointment with a mortgage advisor all week, but she wad too busy to return any of my calls, and the other mortgage advisor is 'out sick'.

So someone finally rang me back this evening (i don't think she was a mortgage advisor), She said that we would not qualify for a negative equity trade down mortgage for the amount we required ( if we bought a house for €150,000 and sold for €220,000) because we wouldn't qualify for a mortgage based on our income.

She said we should just go through the MARP, and expect to hear something back in 8 to 10 weeks.
 
Hi Rose

I agree that MARP is the right avenue to take. One of the solutions offered through MARP is a trade down mortgage, so you might be offered one that way.

Brendan
 
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