Pay off lump sum

Hi all
I was made redundant last month. I have a morgage of 300,000 on a tracker rate of .75+ecb rate so that 1%. My wife is not working due to illness and i am finding it hard to get new employment. I wont get the same wages as i was on before. I am 4,000 in arrears.
I need to look after the 80,000 i got. Looking for some advice on weather i am better paying off the arrears and looking at some depost account to earn interest. If i pay the 80,000 off my morgage i still wont be able to pay it and the money is gone. Would the bank give me some sort of a write down if i did this .Say 80,000 of the morgage and they reduce it by 100,000. I feel i could then pay the morgage. Sorry if post long winded.

Pay off the arrears and set 12 months payments cover you while you get back on your feet. Would not be rushing to pay off the €80k if it's 1% interest.

iRay

You should complete the Standard Format for mortgage arrears Case Studies to get a full answer.

1) Of course, you must pay off your arrears of €4,000 first. It's the right thing to do and it starts the process of repairing your credit record.
2) Then you pay your normal monthly payment as its due.
3) No lender is doing write offs in return for repaying a tracker early. However, this policy may change, so you should keep your savings available and flexible.
4) If you are in big negative equity and you have a loan with one of the banks who is leaving Ireland, you may be able to do a deal to sell the house and get the shortfall written off.
5) Check the impact of having such savings on any means tested social welfare benefits you get. I have a vague idea that the first €30,000 is ignored for means testing purposes. When you come off job seekers benefit, you may need to revise your strategy.
6) While it's not their policy to do a write off, if you do pay some of your mortgage off, make sure it's treated as payments in advance, so you won't go into arrears for some years.

Brendan

Hi Brendan
Thanks for taking the time. Reading the indo there was a write up on mortgage arrears. The main point was that banks could enter into deals next year. As the problem gets worse. I am paying off the arrears, as this is the first thing to do.
My main point was that i wont get another job for the same money. The min wage has become the max wage in a lot of sectors. I want to get to a stage that i can still pay my mortgage this wont be the cash after a period of time if i dont get some extra income or a deal. The bank are losing money on my account at the moment. if i can get 20% of a write down and pay my lump sum off then my new wage will be fine. I had thought of putting most of the money into a high interest account and using this to help but after the increase in dirt tax its not feasable.
Time will tell i supose about any deals.
!RAY

Thanks Joe 90 for your reply.

!RAY said:

Reading the indo there was a write up on mortgage arrears.

. I am paying off the arrears, as this is the first thing to do.

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You cannot rely on what the indo thinks banks will do. Why would a bank give you a write off. They only people they are doing this for is for chronic indebetness and presumably banks that are leaving Ireland.

Are you going to pay off the arrears in one lump sum? After that you just need to use your capital to pay your mortgage while you look for a job. Check out if you are entitled to mortgage supplement from social welfare as both of you are currently unemployed.