Mortgage Mistake

am i bovvered

Its a long one thanks for reading:)

One year ago last month we bought a 2 bedhouse on a 5 year interest only buy to let for 85% of the purchase price, the mortgage was...€137,700. We signed all the documentation and rented it out.
It was our 2nd investment property + our own home.
The rents where paid into our current account and the 3 mortgages come out every month.
We thought everything was working well until early summer when we checked our statement only to find that the bank was only taking €92 a month out for the newer house/month. I realise that people might find it hard to believe that we didnt realise but we just go to the cash machine and if our balance is healthy (€1,000 +) we are happy and get on with life.

When we realised we went to see the manager that day !!!
She ended up ringing some head manager in Scotland after realising they had a mistake on their system...it stated that €110,000 had been paid back and they where charging us for the balance.
She stated that if we hadn't come in they probably would not have picked up the mistake and the bank would rectify everything immediatly.
I said that I did not expect to pay for the 4 months that had elasped and she said she would look into it.

We heard nothing from the bank but the balance seemed to take a hit, we had a berevement in june and difficult working situation arrose.
So....in October we got a bank statement and realised the situation was still the same...we decided to do nothing but started taking the money that should have been paid out ourselves and putting it away in case we got a large bill.

A couple of days before christmas we got a mortgage statement in the post...(my wife says it is the first letter we have ever got about this house)....is stated that the balance has gone from €137,700 to €143,048 ....no demand for payment.

We decided not to worry over the christmas ( the house is empty at the moment) and deal with it in the new year..I want to try to deal with this the best way for us , it might sound like it is, but we are not wealthy, just would like some advice.
Many thanks

ircoha

..It was our 2nd investment property + our own home...we are not wealthy,

You owe the the money, regardless. the increase in the loan of 5,348 reflects the non-payment of interest.

137,700 * 4.7% = 6471 -(12* 92) = 5348

Pleading ignorance will not wash: anyone with 3 properties will be assumed to be financially astute.

What you might achieve is to get a new five years IOL to start from Jan 08 for the increased balance.

Dont p!ss them off in any way during theese negotiations as they could call the loan at at time and this would lead to extra costs. They have the big stick here and dont forget that.

In passing, from a tax return perspective, it would be easier to have the rental income and the interest expense and all the other stuff, insurance etc for the 2 investment properties in a separate account from your day to day account.

am i bovvered

thanks for the reply,
I'm not pleading ignorance, I explained the situation truthfully, I realise that with 3 properties I should be on top of things more, we got a bit caught up in the property bubble (at the tail end) and hope to get everything organised better now.
I needed to know where I stood and I am going to try to get a new 5 year term, from what you say its the best I can hope for.

I thought the fact that they never once contacted us for any arrears or interest rate increases all year might make a difference.
Thanks