Split Mortgages and Long Term Deals

Mark12, you have made some very valid points on this thread.

Boomtobust, you can bet your last Euro that the bank will never agree to any proposal you you but fort to them within the next five years. Currently you are no more than a mere tenent of the bank. Once you are paying for the cost of the loan which is the interest, the bank are happy. You are also keeping their house/apartment safe from squatters moving in and generally maintaining its upkeep. I am also presuming you have insurance on the property and a life policy to booth. If so they generally wont come near you.

Now, if the Celtic Tiger raises its ugly head once again, then you have a problem - along with another few hundred thousand distressed mortgage holders around the country. Mr Banker will then want his keys back.

My own guess regarding were this is all going to lead is similar to what happened in 1988 when Dublin Corporation allowed tenents to purchase their homes at more than reasonable prices to the tenent.

I believe today mortgages are available to City Council tenents to purchase their homes at also reasonable costs. Funnily enough a neighbour of my sisters is purchasing her house via this mortgage scheme for €50k off the DCC. My sister currently has a mortgage of €275k on exactly the same type of property two doors down!

Getting back to my point, I believe that the banks are currently trying to sit this recession out and from their warm cosy offices believe that in another 5-10 years that this doomsday scenario will be over and they can go and collect their pound of flesh. This time I don't think its going to be so easy. My guess is there will be offers on the table similar to what Dublin City Council proposed over two decades ago.

Your accountant is right, say nothing, pay interest and don't show your hand.

Good luck.

Valid points yourself Wishes, boomtobust is a tenant, it's not boomtobust's house, and it will never be as he stands, if he wants to buy it, he should make his best offer to the bank taking into account what he has already payed, if not accepted, off he goes to the UK, but the bank will lose more than he will.

The Government is seeking for a reduction on the banking debt yet Boomtobust is not entitled to look for a reduction on his? Double standards do exist.

mark12 said:

Ok i agree, interest only is a relief for many, but soon Boomtobust will want to know will he ever actually own his home? Or will he be kicked out at 60 when the value of his home may be a bit closer to what he still will owe by then?

If the answer is never, is it not prudent to start again somewhere else while he can still work? Also what effect does being in limbo for so long have on his mental health and who pays for that?

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Good point and putting aside the sociological long term implications for Boomtobust, the massive financial loss incured over time by not just him but potential family. The impact of these situations for many in Irish society today, the thirthysomethings with young families, the people we need to have disposable income, not just to spend now but in the future by them and their growing children, a generation with no money to dispose into the ecomony and with a psychological fear or reluctance to do so in the future. And heaven forbid they do have money in the future, well lets just pump that back into the bank again, not the local shops etc.It's not just sociologists but lateral thinking economists who are seriously concerned about this. The simplistic view that you borrowed so you pay is just that too simple and why it's never going to solve anything, it's a punishing attitued devoid of any creative resoning or moral/social insight into the complexities of society. And what of the case where you did not borrow but you pay regardless, the people of today and tomorrow who'll in one way or another be baying for the wreckless gambling of not just our bamks but other nationalities also. This machevillian attitude of only the little man pays/looses out because he can be made to do so is, well simple rubbish and shows a lack of intellegence by those in power to do other than the simplest thing, squeese the middle earners because they are powerless to do anything about it.

In America they looked at peoples interest rate and adjusted according to their ability to pay, with the view that lets get people spend into the local econonies again, they are extremely frustrated by europes inability to deal with our massive debt issues, where once again it's the simple approach cut cut cut. Now I have a five year old son who could come up with that simple solution. Hard decisions indeed!