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Restructuring Mortgage Q

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  • 21-01-2013 2:25pm
    #1
    robodonkey
    Registered Users Posts: 205 ✭✭


    Hi all, don't usually post around here, so thanks in advance for replies.

    Myself and my wife are mortgage holders on an apartment, our only property and likely to be in a nice chunk of negative equity.

    Some backround:
    We are not on a tracker, we are not on interest only.
    We have the mortgage with KBC at the moment.
    We are not behind, and have never missed a payment in 7 years.

    Lately, we are finding ourselves pressed (finally) into a corner with all the new taxes and the arrival of our newborn. We are starting to see the overdraft being used where it was never a problem before.

    I would like to know what the view "from the banks" perspective is on the following kinds of moves by me, (are any of these even possible):

    Looking to move to interest only permanently.
    Looking to move to interest only for a period, perhaps 1 year? 6 months?
    Looking to restructure payment term.
    Looking to sell the apartment (at a loss) and carry that loss to a new mortgage?
    What are people doing with these sorts of things?
    Is there any "posturing" or way to propose this stuff to your lender so they don't just fob you off?


    Basically, this isn't a case where we can't pay, it's just a case of us hitting or coming close to that limit (finally) and having no breathing space which causes me concern.

    We have trimmed a considerable amount in the disposable income, getting rid of the fat/excess. Very little left there of late so its not really a matter of "tightening the belt" any further.

    All comments welcome, any advice or experiences welcome....


Comments

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    #2
    homer911
    Registered Users Posts: 5,119 ✭✭✭homer911


    The earlier you engage with your bank the better for you and them - even if its just raising a warning flag. They will put you into their MARP process as a pre-arrears case and required you to fill out a few forms, including a statement of financial standing - you will have to do this anyway if you want any form of restructuring.

    There is no way they will put you on permanent interest only, but once your financial position is on record with them, they will be more prepared to discuss options.


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    #3
    IK09
    Registered Users Posts: 1,055 ✭✭✭IK09


    Hey,

    Your situation is unfortunately a common one. Well done on not missing a payment for 7 years, in this age that alone is an achievement. TBH if you were on a tracker mortgage you would have a bargaining tool, and would probably be able to secure some form of settlement where they would take approx 7-8% off the balance of your mortgage in return for switching to a variable rate.

    From the banks point of view, they generally have two main category's in these issues. The people who cant pay but want to, and the people who wont pay. If you keep the lines of communication open with your bank, informing them of your situation, this is a very positive step. They are much more likely to switch you to an interest only option in the future if needed, if you have been in contact with them and have been honest with them.

    Generally the Bank should have no issue moving you to an interest only plan for 12months, with a review after. Call the bank and ask to speak to the person who is in-charge of the mortgage, or bank manager. Explain your situation and look for a meeting. Ask would an interest only option be available in the future as your financial affairs have changed dramatically since having a child and will need some relief from the pressure ye are under. Let them know that ye have gotten rid of the little luxuries ye had and this is what ye are left with. Im a financial planning consultant and this is not uncommon, i see it everyday.

    Congratulations on the baby


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    #4
    robodonkey
    Registered Users Posts: 205 ✭✭robodonkey


    Some sound advice there folks, thanks for the replies.


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    #5
    cookie1977
    Registered Users Posts: 6,794 ✭✭✭cookie1977


    You have to approach your bank and they'll get you to fill in a form on your income and expenditure. You'll meet then with a bank mortgage advisor who'll make recommendations to you about how to proceed. If you agree then these are past on to the bank for further consideration. If they agree or if they've other suggestions you'll be notified upon which you'll have to agree to the new terms. If you dont agree you can appeal to the bank internally, if they still decide agains you you can appeal to the financial ombudsman. that's the sum of it.

    PS it's not too bad. So dont worry.

    Basically you''l be entering the MARP process but you sound like you'll be in pre arrears. Have a look at this site which should provide alot of info:

    http://www.keepingyourhome.ie


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