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Trouble making mortgage payments - what are the options

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  • 29-01-2009 9:52pm
    #1
    soretoe
    Closed Accounts Posts: 138 ✭✭


    Just wondering what arrangements are being offered by the banks/building societies etc.. if you're getting into difficulty making your payments at the moment?


Comments

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    #2
    Mr Benevolent
    Closed Accounts Posts: 12,456 ✭✭✭✭Mr Benevolent


    http://www.mabs.ie/

    Go to these guys first, they have a fair bit of clout.


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    #3
    broker2008
    Registered Users Posts: 750 ✭✭✭broker2008


    If one is having difficulties, do everything you can to make the payments and talk to the banks to try and take a premium holiday BUT if your repayment bounces once you will probably find this option closed to you.


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    #4
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    Guess it depends on why you are having difficulty. If you have been made redundant that is a different solution to not being able to make repayments on a mortgage full stop.

    Best thing you can do, regardless of the reason, is talk to your bank. If you have been made redundant (or the difficulty is another reason that would be short term) then you might be able to take a payment break or go on interest only for a while.

    If its a situation that is ongoing (as in the payments were too high in the first place) then you could ask them to look at rescheduling the mortgage over a longer period to make the payments smaller. Beware though, this does not always reduce the payments as much as you might think as the interest portion gets higher.

    Good luck :)


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    #5
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    Talk to your bank, talk to you bank, talk to your bank. As long as you're not with a sub-prime lender (such as Start), your bank will be very reasonable and want to work with you during these difficulties.

    The bank does not want your house, they want you to repay the money you owe them. They can wait, they won't mind waiting as long as they are confident that you will be able to repay at some time in the future. A major part of that confidence comes from you approaching them and being completely honest with them.

    There are numerous options available to you, but the main 2 are:

    Repayment Holidays are where you are given a break from making repayments (usually for several months). The good is that you don't have to make any repayment during that period. The downside is that these repayments are tacked on at the end and therefore you pay slightly more interest over the life of the mortgage.

    Interest-only repayments are where you only service the interest portion of your debt. Therefore the debt neither grows nor shrinks, so, basically, your mortgage is "paused" during the lifetime of the interest-only period, and when when you do get your finances sorted and return to standard (capital and interest) repayments, you take off exactly where you left off. With interest rates very low at the moment, the interest-only repayments should be low enough.

    In both cases above, your bank will show you the exact figures (and overall cost) involved.

    Also agree with talking to mabs. It's free, independent and set up for exactly this kind of thing.


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