Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Interest only advice appreciated

Options
  • 10-02-2009 2:07pm
    #1
    Nuno25
    Closed Accounts Posts: 1 ✭


    Hello all,

    I, for privacy reasons, have re-registered using a different username hence my first post. Mod's, sorry if that is off charter just that a few people here know me and I am looking for advice/opinions without being id'ed.

    OK, I have a commercial mortgage with BOSI for 1.45million:o on a commercial property which is most definately in negative equity now:(.

    I have been on interest only since I took it out in 2005. The mortgage was for 100% price on building with the 'managers' knowledge, some creative valuations were used! I am a classic case of all that was wrong in Ireland! I am still a company director of a company that will no longer be able to pay me, I am in deep sh1t:o:eek:.

    BOSI have just issued me with a new offer doc for interest only for a further 12 months, two conditions I would like advice on;

    "Interest on this facility will accrue on a day-to-day basis and will be calculated by the bank at a rate equivalant to the aggregate of 2.3% per annum, and 3 Month EURIBOR"

    "A reschedualing fee of €3.635,00 or .25% of the balance outstanding on the loan on acceptance of this amendment letter shall be payable by the Borrower. Such fee shall be added to the loan on acceptance of this offer."

    Can somone please explain EURIBOR in that is it the same all over the EU or because Irish/English banks are in deeper sh1t than other countries do they have to pay more for their money? What is it now? Is the rescheduling fee somthing I should contest? Is the 2.3%somthing I should try to lower? I am confident the rental income will cover the interest however in my difficult circumstances I am trying to be as prudent as possible. Advice opinions will be v.much appreciated.


Comments

  • Options
    #2
    padimus
    Closed Accounts Posts: 87 ✭✭padimus


    Euribor is the same rate for every european bank that gets its wholesale funding in euros. It doesn´t matter what situation the bank is in, the Euribor is essentially the cost of funds to borrow on the wholesale funds market. Basically a random sample of banks are asked their interbank lending rate for weekly, monthly, quarterly funds and the average rate in each category is the Euribor rate for that date.

    The 3 month euribor at the moment is around 2%. The bank makes its money by charging you a margin over the rate (in this case the 2.3%).

    The fee they are charging would be quite common at this time. after all, you are probably in negative equity (as you say) and that situation will only get worse from the banks point of view, you are a risky borrower for them now hence the fee and the margin. You could go back and negotiate but the ball is really in their court. talk to them and see what they say regarding the margin and fee but don´t be surprised if they knock you back


Advertisement