Tracker mortgage in arrears, need advice.

D

Dollar Bill

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Help, looking for advice. I've a tracker Mtge, interest only for full term - 15 yrs left. Can't afford increased repayments. Gone from €440 mthly to €1,600 now due for May, already in arrears over last few months, and due to go up again June i think. Loan amount balance is €430,00 plus arrears of about 6k and climbing.
Pepper just put me out of MARP. I've appealed so waiting on their reply. My income is approx 2,000 monthly net. House Value is approx 600,000 I know I can't afford an annuity mortgage but if it was split and warehoused part of the loan, could this be an option? Looking for advice from anyone with this knowledge or similar experience. Should I sell my house or try and find a solution with them? Don't want to sell, want to improve my income and am working on that but just need a little impartial opinions. Rang them today to ask about this but no joy. Head wrecked as I have to wait 40 days for them to tell me if my appeal is successful and put me back in MARP. If I improve my income, rent a room etc., will they negotiate with me or am I flogging a dead horse. Thought I have years left to sort this out, but sadly Christine Lagarde is not stopping the increases, apparently she is on a journey TIA
 
Dollar Bill said:
My income is approx 2,000 monthly net. House Value is approx 600,000
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My sympathies for your predicament as I’m sure you don’t want to be in arrears and just want to keep the house. Sadly I don’t think there is a solution where you can ever keep it. Even if interest rates return to zero you still have €430k to pay off in 15 years and on your income there is no way to do this.

Sorry I can’t provide any ideas on how to engage with the lender. I think you have to make plans to downsize radically as part of any solution.
 
Hi Dollar Bill

It might be an idea to copy and paste the below post into this thread and answer the questions asked.

Case study - Information required for mortgage arrears and negative equity questions

Please copy and paste this post into a new thread. If you give comprehensive information, it will maximise your chances of getting comprehensive and useful results. Income details Net monthly (i.e. after tax) Income self: nature of income e.g. self-employed/public servant...
www.askaboutmoney.com

If you give comprehensive information, it will maximise your chances of getting comprehensive and useful results from forum contributors.
 
That's not a nice situation to be in. My sympathies also.

On the information provided, I agree with @NoRegretsCoyote

You don't say where or what type of property it is, or your housing needs. If you can do rent a room that covers a lot of the current interest. Is there a reason you are not doing this ?
 
Will be doing it ASAP. Thank you
 
Thank you for your reply, starting with renting a room and working from there.
 
Dollar Bill said:
Will be doing it ASAP. Thank you
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Dollar Bill said:
Thank you for your reply, starting with renting a room and working from there.
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Thank you. Unfortunately there is no option to downsize at the moment. I wouldn't be in a position to purchase with the amount of equity I would have left over = roughly €150/160k A mobile home maybe yes. There's always Brittas Bay.

Renting is not an option as anything decent would cost me the same as paying my mortgage. I could rent this house, €2,500 - 3k monthly but where would I live?
I will rent a room, maybe two (hate the prospect of it but needs must) and push as much as I can towards the interest and tip away in small bits at the capital. Won't worry about the capital for a few years more. I got advice today and I am not panicking anymore. Pepper will have to work with me, if I'm making some lee way into my monthly amounts. thanks again
 
Taking in Spanish students pays well. You have more responsibility than rent a room but maybe do it for the summer then do rent a room
 
You can only earn €14K gross per annum tax free on the rent a room scheme, so renting two rooms may make you liable for tax on the whole amount.

With an income of €2000 per month what are your gross earnings? It sounds barely above minimum wage, but I don’t know your deductions. What do you think you can improve your earning potential to? Or are you solely relying on the rent a room scheme?

Your mortgage provider may start inquiring how you can pay off the capital at the end of the interest only period, especially now that you are in arrears. If you do not have a sound plan, such as a pension lump sum, then you may be changed to an interest and capital repayment mortgage. So you need to start considering this now rather than later. And while it may take Pepper 10 years to resolve this they might start now rather than in 15 years time.

Now that you are outside of MARP that may move quickly to repossession or forced sale. But you will know more after your appeal.
 
Dollar Bill said:
Will be doing it ASAP
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Well that changes the arithmetic a lot and should help short term. Very important to get back on contractual terms and clear the arrears if possible so your credit history improves (see more below).
Dollar Bill said:
Unfortunately there is no option to downsize at the moment. I wouldn't be in a position to purchase with the amount of equity I would have left over = roughly €150/160k
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I think you need to think this through more. You currently own a house that is well above your means and needs (not many people have enough space to take in two lodgers tomorrow). But at some point you will have to downsize as it seems you have no plan to repay the principal in 15 years. If you sell today you will have €160k of equity and on your income can borrow maybe another €90k. €250k doesn't get you a lot of house, but if you're a single person on a relatively low income it matches your needs with your means. At some point you have to bite the bullet on this. It's not today but the older you get the less you will be able to borrow.

TLO said:
If you give comprehensive information, it will maximise your chances of getting comprehensive and useful results from forum contributors.
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Agree this is a good idea and would get you better advice.
 
I agree with @NoRegretsCoyote above. If you have two rooms spare the property is too big for you.

Read up on the rent a room via Citizen's Advice or Revenue. Up to 14k is all tax free but if you exceed it you are no longer elegible for the relief and the total amount of rent is taxable.
 
Even if this was offered to the poster they would not be able to afford it, as they would need to pay €3000 plus per month over 15 years to clear their debt.

@NoRegretsCoyete is making a very valid point, they need to act now, rather than when they are 15 years older. Downsizing to a property suitable for a small household on a low income is better to do now with 15 years to pay off a loan than in 15 years time. It may not be palatable to consider but it seems to be the reality of the situation.
 
Dollar Bill said:
Thank you for your reply, starting with renting a room and working from there.
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At the valuation my guess is the property is in Dublin and therefore prime rent a room location.

You say you'd prefer not to as it obviously will cause some changes, but remember there are many people now back living in rural Ireland and only need to be in the office 2-3 days a week. You also have many final year students that only need to be in college 3/4 days a week.

I'd look at renting 2 rooms, but on a Sunday/Monday evening to Thursday or Friday morning basis. This would bring you close to the €14k max (remember it is the maximum total income including contributions to any bills) and give you weekends without disturbance.

It brings your net monthly income over €3,000
 
They are very exposed to future increases in ECB rate so need a plan to reduce the capital and will need more than 3k per month to do this at curent interest rates.

The home has equity in it and looks to be quite large for one person to live in. I am basing 'one' person on the fact you are using 'I' instead of 'we'. If it's a family home, it changes things.

As much as it may not be palatable to sell it, it should be considered before you get further into arrears. Any rent a room income will just keep you above water, but your monthly income is very low to service a loan of 430k.

You are in effect renting this home from an institution with all of the cost of maintenance. For 1600 a month in interest and increasing, I would prefer to be renting.

It's all well and good saying Pepper have to work with you, but in reality, do you need the stress (?) of that if it can be avoided?

I would encourage you to do a full money make over here. People will give you good advice.
 
Hi Dollar Bill.
I would be talking to a Personal Insolvency expert ASAP about your situation.

Maybe get a solution that allows you to make affordable repayments to keep your property or not keep it but allow you to rent it affordability going forwards but giving up ownership of it.

Other than selling and downsizing and/or relocating I think your options are limited.

Selling and moving to Leitrim mortgage free would be my preferred option.
 
Dollar Bill

Unless you provide the following information, you will get very limited advice.

Case study - Information required for mortgage arrears and negative equity questions

Please copy and paste this post into a new thread. If you give comprehensive information, it will maximise your chances of getting comprehensive and useful results. Income details Net monthly (i.e. after tax) Income self: nature of income e.g. self-employed/public servant...
www.askaboutmoney.com
 
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