EmilyB2015
Registered User
- Messages
- 10
Clean breaks are best.
Is you sister willing to move out?
Not sure renting the house out is the ideal.
Is your sister willing to take over the entire mortgage herself.
If she's not then the house should be sold and NE tackled between you. Probably easiest to wait until NE is lower. How long in mortgage repayments before you are that far.
Yes a bank can allow you to sell and repay the NE as either a long or short term loan.
How much of a shortfall would be left after selling the house?
Hi Emily
Which lender?
What interest rate are you paying?
Did you have a written agreement with your "headstrong" sister before you entered into this commitment with her?
What is your sister's rough salary?
We both have good jobs and on paper it looks that we can both afford the mortgage.
1) Check that interest rate. Assuming you bought it as a home, the rate should be 4.33%. You will find the rates here:[broken link removed]
2) You should not be paying half your sister's housing costs.
3) Assuming the 4.63% rate is correct...
the repayments are around €1,400 a month
the interest on the mortgage is around €1,000 a month
4) Assume that you can rent out the whole house to an unrelated tenant for €800 per month.
5) The monthly shortfall would be
Rent received €800
Interest paid: €1,000
capital repayment: €400
Net cash outflow: €600
Your share: €300
6) So if your sister wants to stay there, she should pay €1,100 per month and you should pay €300 per month.
7) She should rent out a room to help her pay the mortgage.
8) No other option works for your sister
She can't take over the mortgage as her income is too low.
She can't sell it as she would not be able to buy again and would be stuck with a €30k loan with nothing to show for it.
9) You have to set out these figures and present the three options to her
A) Sell and pay off the shortfall
B) Rent out the entire house
C) Reduce your repayment to €300 per month
10) Assuming you do opt for C) you must sign an agreement as to what you are doing so that at some later stage, when you have paid down the negative equity and built up some positive equity, she does not claim that she owns more than 50% of the house.
Hi Brendan
The couple that are using IMHO / Grant Thornton to resolve their situation are not insolvent either. Their projected shortfall will be twice the projected amount that Emily and her sister will owe.They are both employed, but are separating. EBS / AIB appear to be the most pragmatic institution to deal with. Why not use their pragmatism to secure a favourable deal.
Emily is correct. Her current situation is not sustainable. The other suggestions - including trying to convince her sister that Emily is owed 21K etc. are cumbersome, bound to cause ongoing conflict and involve a lot of unnecessary stress. Emily wants to get on with her life. It's not Emily's role to ensure that her sister remains living in a property that she can't afford.
Both women earn 40K gross per annum - and receive 65% of this in net wages. Hardly the type of income that one can afford to contribute to 2 mortgages and start a family.
There is every chance that the bank would do some deal on a shortfall amount of 60k+. It could involve an informal, yet binding - solution / agreement on the shortfall amount that wouldn't involve any interface with the insolvency service.
What's the harm in contacting the IMHO / Grant Thornton, explaining the situation and sussing it out - as my friend did? It seems like the most appropriate solution to a seemingly intractable situation.
Hi
Thanks for your response I will explore this option.. We both don't want to enter the PIA option as it will destroy our credit rating and in turn make things difficult for my sister to borrow money again and me for that matter.. I can't imagine that the bank will write off 75% of shortfall without financial implications, or have I misunderstood?
Thanks,
No. You have not misunderstood at all.
The clue is in the name. The insolvency options are for those who are insolvent. You can both meet your debts as they fall due, so you should not be claiming insolvency.
I suppose there is no harm in asking EBS if they would allow you to sell and settle the shortfall, but I think it's unlikely and it would show up on both your credit records for 5 years.
Brendan
Hi
Thanks for your response I will explore this option.. We both don't want to enter the PIA option as it will destroy our credit rating and in turn make things difficult for my sister to borrow money again and me for that matter.. I can't imagine that the bank will write off 75% of shortfall without financial implications, or have I misunderstood?
Thanks,
I'm so sick of it at this stage that's why i have to do something about it. Want to have information for her and let her digest it and show what options are available before we pursue it. I'm going to meet over next few days/week and go through everything have all the cards on the table. She's not going to be happy but situation cannot continue as is.Don't let the stress get to you. Write down each option so that you have them clear in our mind. I think your sister should be part of these discussions and should accompany you to IMHO. It's her problem too.
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