Swapping mortgage lender to get a break on payments?

[colly]

I own a property which has been rented out for a few years - always paid for itself - it does not make any profit - but does not cost me topo much either - just the management fees etc - I've been lucky it has not been any hassle. Last month the current tenant gave his notice and he is moving out next week. I have to give him back his deposit, and then pay the next mortgage payment myself. I have put the property on Daft but no calls yet.

As a precaution, I called my bank (first active) to see if I could take a break on the payments for a few months so it would not impact me too much. They said no problem, come in and sign forms etc etc. However when I went in, its not a simple process - you really have to prove that you cannot afford the payments and you are in financial difficulty. I'm not awash with money but it will certainly be a stretch to pay this. But she said just from knowing my net income vs mortgage payment I don't have much of a chance.

It was suggested to me by a friend that I might be able to see if i can swap my mortgage to a new lender, get a better rate maybe and also get a few months off as a holiday period from payments. Hopefully I will have a new tenant by then so I'll be ok.

Is this a real possibility or would this just be to difficult?
Is there any other way around it for me?
Any advice appreciated
Thanks

 

[NorfBank]

It would be possible to switch your mortgage once your loan to value and repayment capacity fit the criteria of the lender you are moving to.

It is unlikely the new lender will give you a payment break from the off though, as with First Active you would have to give a reason why you need a break. If the reason is that the property does not have tenants at the moment...

To switch you will also incur legal expenses and the cost of a valuation.

First Active investment rates are quite high though so you should investigate switching. The best investment rate out there is around 4.2% variable.

 

[colly]

Thanks. I'm not on an investment mortgage, just a normal one.

I *think* she told me I'm on 3.85% right now...

 

[Robin Banks]

I called my bank (first active) to see if I could take a break on the payments for a few months so it would not impact me too much. They said no problem, come in and sign forms etc etc. However when I went in, its not a simple process - you really have to prove that you cannot afford the payments and you are in financial difficulty.

Summary. You can afford to make the repayments on your vacant investment property, but you'd rather not because it'll stretch you a bit.

Booh hoo.

So now you want to take your mortgage to a new lender so you can immediately avail of a payment holiday.

Try starting a new permanent job and then go in to your new boss after a week looking for six months off and see how you get on.

 

[colly]

I didn't come here looking for sympathy, I don't need any. I did come here for sound advice, just like I got from Norfbank.

Take your ar$hole attitude somewhere else
Boo Hoo...

 

[Robin Banks]

No worries pal.

I don't feel like paying my mortgage for a few months either. I can afford to but I'd rather not.

If you find a bank stupid enough to accommodate you let me know I might borrow some money off them

 

[Maggs065]

Summary. You can afford to make the repayments on your vacant investment property, but you'd rather not because it'll stretch you a bit.

Booh hoo.

So now you want to take your mortgage to a new lender so you can immediately avail of a payment holiday.

Try starting a new permanent job and then go in to your new boss after a week looking for six months off and see how you get on.

What's with the attitude Robin Banks?? Completely unnecessary comments and to be honest down right rude (IMHO).

 

[WaterSprite]

Thanks. I'm not on an investment mortgage, just a normal one.

I *think* she told me I'm on 3.85% right now...

Your mortgage will be an investment one b/c your property is an investment property - that's the determining factor. The rates are different as between investment and PPR. For e.g. NIB's current investment rate mortgage is about 4.1%, but PPR (at LTV <60% is about 3.2%)

 

[colly]

OK, let me clarify. Having to pay the mortgage on this property as well as my own rent etc will be a big stretch for me - but I'm not exactly going to go bankrupt trying to do it. It should not be too much of a problem for a month, maybe two - but it will become a problem if I don't get anyone to rent the property soon.

Last year I had some financial difficulty and my bank let me take a 2 month holiday from my loan - it was no problem at all I did not even need to sign any forms. I was hoping it might be the same with the mortgage.

Understandably, the bank said there are a lot of people in a lot worse situation than me, so tis unlikely they will favor me over someone in a worse situation. However the world of finance always has options - so I thought I'd explore what mine are.

Watersprite - when I bought the property it was not an investment it was a standard purchase. I later decided to rent it out - but nothing changed from my mortgage afaik. They do know it is being rented out though I told them when i saw them on Monday they said it's fine.

 

[LDFerguson]

I too am unimpressed by Robin Banks' unhelpful and rude smart comments. I'm sure there are plenty of other boards out there that appreciate such ignorance.

Apart from that, payment breaks are not a request for charity. The missed repayments will be added to your loan balance and will accrue interest so the lender still makes money from them. Some lenders used to offer them as a product feature for no other reason than you wanted a break. Understandably, they have become harder to get these days because it's difficult for the lender to differentiate between who is in trouble and who's actually going on the round the world cruise.

I don't think switching lenders is your answer here. If you switch lenders now, your rate will be the investment rate so you may end up paying a higher rate of interest. Also I'm not aware of any lender who will allow you to take a payment break within six months of starting a new mortgage with them.

A possibility would be to "roll your own" payment break. Switch lenders and borrow a little more than you need, e.g. three or four months repayments. Keep the excess in a high interest account and don't use it unless or until you need it.

 

[Robin Banks]

I too am unimpressed by Robin Banks' unhelpful and rude smart comments. I'm sure there are plenty of other boards out there that appreciate such ignorance.

If you are incapable of engaging my posts directly, please also refrain from making snide personal attacks. Thanks.

 

[WaterSprite]

Watersprite - when I bought the property it was not an investment it was a standard purchase. I later decided to rent it out - but nothing changed from my mortgage afaik. They do know it is being rented out though I told them when i saw them on Monday they said it's fine.

Fair enough. If you change lender, you'll be on their investment rate though - it just seems that your current lender didn't change you over, which is a good thing for you.

In order to change lender, you'd have to go through a solicitor (legal fees would be in the order of €1k - could be less, if you're lucky) and it all takes time and hassle. You may get a mortgage break for up to 6 months (e.g. AIB offers (or offered in July) a three-month break which you can take at the beginning of the mortgage) but it'll cost you in terms of (i) legal fees and (ii) potentially higher interest rate. 3.85% is pretty good for a mortgage on an investment property. The AIB variable rate for 85% LTV is 4.27% for example.

Did you ask FA if you could go interest only for a while instead?

 

[LDFerguson]

If you are incapable of engaging my posts directly, please also refrain from making snide personal attacks. Thanks.

There's nothing in your posts that warrants engaging - you didn't make any valid points, you just decided to make childish, sneering & rude comments based on an erroneous interpretation of the original poster's motivations and objectives. Why would I bother engaging with that?