Struggling with an investment mortgage

M

melly

Registered User
Messages
4
Hi,

I have a mortgage with KBC/IIB. I am on a fixed rate mortgage and also have some other substanial loans. I have undergone big salary cutbacks and am having trouble with payment. I haven't missed any Mortgage payments yet but have barely enough money to survive.
Anyway, I have been approaching my relevant financial institutions regading reduction in repayments etc - I went to MABS but the service they were offering is basically negotiation - something I feel I can and should do myself.
My issue is this - I approached KBC, outlined my situation to them asked if they would consider consolidation of debts as my repayments would be totally manageable then, they said no - that the only thing they would offer was interest only payment for a couple of months. That they were not flexible - there were no other options.
Basically - it's a quite new mortgage - I'm already paying mostly interest, also its a seriously short term solution, well, not a solution at all really.
Has anyone else come across this type of situation with KBC?
Would people advise me to maybe try and switch mortgages integrating a consolidation?
I'm not getting very far so far on my other loans in terms of reduction of repayments so really feel consolidation is the only way I can make this manageable..
Any advice at ALL is appreciated. Let me know if you require anymore info.
 
Re: Financial trouble - KBC Bank

Is extending the term of the mortgage an option? Can you rent a room?
Are you in negative equity?
 
Re: Financial trouble - KBC Bank

I wouldn't totally discount the MABS option. While I admire your willingness to negotiate on your own behalf, MABS has a certain reputation and standing with lenders. They may have more clout in negotiations than you would on your own.

(I have no connection with MABS, by the way.)
 
Re: Financial trouble - KBC Bank

banks are very reluctant to consoldiate debts of other institutions as it sees it as bailing out the other bank
possible resolutions include going interest only, term extension, payment holiday (only from some banks), rent a room, rent the property and stay with a friend, trade down as a last resort
i presume you have liquidated all savings and are using them to pay down your debts...
 
Re: Financial trouble - KBC Bank

melly said:

I approached KBC, outlined my situation to them asked if they would consider consolidation of debts as my repayments would be totally manageable then, they said no - that the only thing they would offer was interest only payment for a couple of months. That they were not flexible - there were no other options.
Click to expand...

You are asking KBC to lend more money to you?

KBC might have sympathy for you, but they would be stupid to lend you more money and increase their problem while solving the problems of the other lenders.

I really think that switching you to interest only is as flexible as they can be under the circumstances.

You should target the other lenders. Presumably you have a car loan payable over 5 years so you are repaying capital on this loan. You can save much more cash flow here, if they switch to interest only. I don't know what their attitude to this would be.

MABS might be able to help you negotiate with the other lenders. They may also be able to give you tips on budgeting to reduce your outgoings.

Brendan
 
Re: Financial trouble - KBC Bank

Melly you are implying that KBC are not helpful because they won't do what you want them to do. To deal with them successfully you need to think of it from their point of view and not just yours.

To get better ideas on how to deal with your debt can you do the money makeover section, listing all your loans, who they are with, interest rates, repayments, assets etc. This is the only way you can be given proper advice, it might also help to make things clearer for you.
 
Re: Financial trouble - KBC Bank

To address some replies.

Brendan - They actually wouldn't be stupid in lending more money as I have worked out that it would be considerably less to pay back my mortgage with a top-up that would cover all current debt - therefore making all my repayments manageable, therefore not having to ever worry about not making repayments.

Bronte - This is not the case at all - I can see it from their point of view - It is in the banks interest too for me not to go into arrears or lose my house. My point was that interest only is not a good option and the only one that was offered.

I don't live in the house I have a mortgage on - it is already rented out.

Extending the term of mortgage is not an option - there are no options other than going interest only.

I have a large loan with a CU - they don't offer reduced or interest only repayments.
 
Re: Financial trouble - KBC Bank

Hi Melly,

I have been through a similar situation. Push your Credit Union via Mabs and an accurate financial statement. The credit union will move you to interest only or even allow a payment holiday once you have a clear plan and timeline. Its a headwreck for a week or two and Mabs can be a bit slow. Ask for another meeting with the Credit Union and tell them you are not in a position to make your repayments at the moment and you are currently dealing with Mabs. Give them an indication of when they can expect to start receiving payments again also ask them to be flexible on the ratio of savings to loan. You may be able to use some savings to clear down your outstanding loan. They did it for me. My credit union initally moved me to interest only (1300 euro to 800 euro per month) and have now given me a payment holiday as my income has further deteriorated.

If you find any of this usefull I will tell you how I have managed to deal with my mortgage providor by e-mail.

Best of luck
Eamonn
 
Re: Financial trouble - KBC Bank

melly said:
I don't live in the house I have a mortgage on - it is already rented out
Click to expand...

Presumably the rent doesn't even cover the mortgage interest?

Your two options are:

1) Try everything you can to ride it out for a year or two and hope things get better

2) Sell the house and reduce your problem

The advantage of 1 is that rents may go up, your interest payments might eventually come down or you might start earning more again.

The disadvantage of 1 is that your situation could get even worse than it already is.

The advantage of 2 is that it allows you to cut your losses at a manageable point and you are not exposed to the possibility that things will deteriorate further, the disadvantage being that you might be cashing in at the worst possible time and live to regret it
 
Re: Financial trouble - KBC Bank

When times were good and house prices were continually on the up, banks were willing to talk about consolidation, top ups etc but that has all changed now. Basically what people have forgotten is that a mortgage is not a random loan, it is a loan secured on the value of your house. So if the market price of the house is fallen they wont give you any more money on it regardless of your abililty to pay or what you want the money for. Sorry to be blunt but this is the case and in fairness, the fact that they were so willing to lend vast sums based on the prospect of house prices going up is partly what got us into this mess in the first place!!
I don't know what your personal living situation is but if I were you I'd sell the house. It's a depreciating asset and you're only throwing money away on it. Purely my opinion though...
 
Re: Financial trouble - KBC Bank

They actually wouldn't be stupid in lending more money as I have worked out that it would be considerably less to pay back my mortgage with a top-up that would cover all current debt - therefore making all my repayments manageable, therefore not having to ever worry about not making repayments.
Click to expand...
You dont get it, do you ? All KBC are worried about is their loan. Its better for them that you owe them 200k and pay back 1k a month than to owe them 250k and pay back 1.3k per month. Common sense.
You dont tell us what your other debts are but why not go interest only and try paying off all the other debts in that time. Concentrate on the highest interest rate loan first and put all you extra cash in there.
 
Re: Financial trouble - KBC Bank

The banks point of view

Increasing the amount you owe them is not beneficial to them, you have run up 'substantial' debts in addition to your mortgage so you are not their ideal customer. In addition you have a depreciating asset, a cut in salary, are barely able to make your current repayments and you are in the beginning of a new mortgage making basically interest payments. We don't even know if the rent pays the mortgage.

Banks are not consolidating as this is seen to have caused a lot of the current problems. Now it is about people getting their debt down. If you are single and this is an investment property than you are more likely as a repossession case than others should you default.

Mabs will give you some ideas, you really ought to do the money makeover section as it will help you to focus on the problems and you may get some better ideas on how to tackle your debt.
 
Re: Financial trouble - KBC Bank

melly said:
Hi,

I have a mortgage with KBC/IIB. I am on a fixed rate mortgage and also have some other substanial loans. I have undergone big salary cutbacks and am having trouble with payment. I haven't missed any Mortgage payments yet but have barely enough money to survive.
Anyway, I have been approaching my relevant financial institutions regading reduction in repayments etc - I went to MABS but the service they were offering is basically negotiation - something I feel I can and should do myself.
My issue is this - I approached KBC, outlined my situation to them asked if they would consider consolidation of debts as my repayments would be totally manageable then, they said no - that the only thing they would offer was interest only payment for a couple of months. That they were not flexible - there were no other options.
Basically - it's a quite new mortgage - I'm already paying mostly interest, also its a seriously short term solution, well, not a solution at all really.
Has anyone else come across this type of situation with KBC?
Would people advise me to maybe try and switch mortgages integrating a consolidation?
I'm not getting very far so far on my other loans in terms of reduction of repayments so really feel consolidation is the only way I can make this manageable..
Any advice at ALL is appreciated. Let me know if you require anymore info.
Click to expand...

I have a lot of sympathy for your situation.

The first thing to say is that none of the banks want, or are interested in, your defaulting and their repossessing, your house.
This is the very very last option any bank would consider.

However this does not mean that they will idly standby and allow to not pay part of your mortgage.

I think that you should consider MABS option : they are very experienced in dealing with banks/lenders and they will give you the support you need to negotiate with your lender.

The second thing is to remember that even paying a small amount of money, as repayment of your loan, stands to you if your earnings deteriorate further
(hopefully they won't).
 
Re: Financial trouble - KBC Bank

Register with MABS as the new protocol with IBF members (IIB is one) starts September see here:
 
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