AIB Mortgage Query re tracker

Tombo2001

Well, I've just had the pleasant experience of spending 25 minutes on hold with AIB, spoke to 4 different people who told me they werent the right person to speak to but that they could have someone "call me back"......not gonna fall for that on again, thank you very much.

My query is this.

Have tracker mortgage.

Have negative equity on the current house

If I purchase a larger house, worth twice the current mortgage, can I secure the existing tracker mortgage against the larger house and then sell the current one?

peteb2

No. You would have to redeem the current mortgage. Don't think AIB are doing neg equity mortages.

chris85

No, your mortgage is secured against current property. Cant carry it over. WOuld need new mortgage got and clear old one with it. BOI offer a trade up negative equity mortgage. Unsure if anyone else does. Even if they did would be unlikely to be able to carry over tracker. They are a loss maker for the bank so why would they continue you on it when they are well within their rights to not to do so.

Tombo2001

chris85 wrote: »

No, your mortgage is secured against current property. Cant carry it over. WOuld need new mortgage got and clear old one with it. BOI offer a trade up negative equity mortgage. Unsure if anyone else does. Even if they did would be unlikely to be able to carry over tracker. They are a loss maker for the bank so why would they continue you on it when they are well within their rights to not to do so.

The bank would be well within its rights to go out and repossess about 100,000 houses in the country right now, but it hasnt done so.

AIB Bank is not a bank, but a state asset (or liability, depending on which way you see it).

As such, it should and has been run in such a way as to best help the economy. If the government wants to boost the housing market, it should allow people in negative equity to trade up in this way. It is the same loan being repaid in exactly the same way, and secured against a better asset.

Anyway, I finally got through to AIB. They dont allow it.

Scortho

If its any use to anyone else ulster bank allow the transfer of the tracker to a new home. Terms and conditions of course apply: the main one being that the property isn't in neg equity.
http://www.irishtimes.com/newspaper/ireland/2012/0329/1224314050944.html

chris85

Tombo2001 wrote: »

The bank would be well within its rights to go out and repossess about 100,000 houses in the country right now, but it hasnt done so.

AIB Bank is not a bank, but a state asset (or liability, depending on which way you see it).

As such, it should and has been run in such a way as to best help the economy. If the government wants to boost the housing market, it should allow people in negative equity to trade up in this way. It is the same loan being repaid in exactly the same way, and secured against a better asset.

Anyway, I finally got through to AIB. They dont allow it.

Bad view to take. They are not a state asset and the more we view them as this the longer we will have to fund them with public money. They are state funded and guaranted. They need to get back to an independant sustainable state so the taxpayer isnt burdened by them forever.

If we continue to view them as a state asset we will have to fund them forever. I dont want to have this happen. I personally dont want my taxes being used to encourage people who bought houses at the boom to buy another one.

Its also not the same loan being repaid, its a bigger loan being repaid which comes with greater risks also. Its also not as simple as what its secured against either. But I am not in the business of giving out free economy lessons.

Tombo2001

chris85 wrote: »

Bad view to take. They are not a state asset and the more we view them as this the longer we will have to fund them with public money. They are state funded and guaranted. They need to get back to an independant sustainable state so the taxpayer isnt burdened by them forever.

If we continue to view them as a state asset we will have to fund them forever. I dont want to have this happen. I personally dont want my taxes being used to encourage people who bought houses at the boom to buy another one.

Its also not the same loan being repaid, its a bigger loan being repaid which comes with greater risks also. Its also not as simple as what its secured against either. But I am not in the business of giving out free economy lessons.

Firstly,

It is the same loan being repaid, I wouldnt be asking them for further cash.

As such it has zero impact on your taxes.

Secondly,

I dont buy your argument.

This line that if the government run the banks as a state asset then it wont be able to sell it back on to the market is wrong on a number of different levels:
(i) It was a state asset when suited them, when they wanted the state gaurantee to avoid going bust.
(ii) The policy of non-repossession is completely against what a rational bank would do and what banks do in other countries when bad debts rise. As such, in this respect it is being run as a state asset.
(iii) It will be easily sold once it is recapitalised, a la Irish Life at present.
....and most of all
(iv) That line that state interference makes it a harder sell is one that is wheeled out by Bank employees when they want to persuade the government that they should hold on to their exorbitant salaries....."its the market rate"

What sort of redundancy programmes has AIB put in place? What sort of wage cuts has AIB put in place? Very little, compared to the massive losses it has incurred. Its scandolous that people in AIB continue to be paid such huge amounts.

FYI, I have worked for 3 different Irish banks and 1 life assurance company, so I have a fair notion what I'm talking about.

Scortho

Tombo2001 wrote: »

Firstly,

It is the same loan being repaid, I wouldnt be asking them for further cash.

As such it has zero impact on your taxes.

Secondly,

I dont buy your argument.

This line that if the government run the banks as a state asset then it wont be able to sell it back on to the market is wrong on a number of different levels:
(i) It was a state asset when suited them, when they wanted the state gaurantee to avoid going bust.
(ii) The policy of non-repossession is completely against what a rational bank would do and what banks do in other countries when bad debts rise. As such, in this respect it is being run as a state asset.
(iii) It will be easily sold once it is recapitalised, a la Irish Life at present.
....and most of all
(iv) That line that state interference makes it a harder sell is one that is wheeled out by Bank employees when they want to persuade the government that they should hold on to their exorbitant salaries....."its the market rate"

What sort of redundancy programmes has AIB put in place? What sort of wage cuts has AIB put in place? Very little, compared to the massive losses it has incurred. Its scandolous that people in AIB continue to be paid such huge amounts.

FYI, I have worked for 3 different Irish banks and 1 life assurance company, so I have a fair notion what I'm talking about.

If you know what you are talking about then you'd know that the bank is losing money on their tracker mortgages.
Unless your contract states that The tracker is transferable, then you won't be able to transfer it and they'll only be too delighted to give you a fixed or standard variable one.

I don't understand how it's the same loan being repaid. Are you carrying the neg eq with you or do you plan on using savings to clear neg equity before buying a new home. If its the latter then the loan is going to be bigger than the current outstanding amount. Either way it's a new contract and works the same way as any other new contract. It's new and the terms and conditions change.

If aib were to allow tracker mortgages to be transferable it would cost tge state more as it would mean that aib is losing more money than it would have, had it issued you with a standard variable or fixed rate mortgage. This would cost me more through increased bank charges, decreased interest on savings and possible increases in taxes to cover the loss.

I don't buy the argument that because its a state asset it should give you what you want. I want cheaper lotto tickets but I don't get them. The esb costs my family more than the offer aertricity gave.

killers1

OP, AIB do have a negative equity product to allow you to move from a current property in NE to a new one but you CANNOT take your tracker mortgage with you.

noodler

Perfect example of an OP throwing his toys out of the pram when he doesn't hear what he wanted to hear.

Bruthal

noodler wrote: »

Perfect example of an OP throwing his toys out of the pram when he doesn't hear what he wanted to hear.

You expect the op to have no reply to incorrect assumptions by others? That toys and pram saying is another stupid phrase adopted by some posters.

Tombo2001

Scortho wrote: »

If you know what you are talking about then you'd know that the bank is losing money on their tracker mortgages.
Unless your contract states that The tracker is transferable, then you won't be able to transfer it and they'll only be too delighted to give you a fixed or standard variable one.

I don't understand how it's the same loan being repaid. Are you carrying the neg eq with you or do you plan on using savings to clear neg equity before buying a new home. If its the latter then the loan is going to be bigger than the current outstanding amount. Either way it's a new contract and works the same way as any other new contract. It's new and the terms and conditions change.

If aib were to allow tracker mortgages to be transferable it would cost tge state more as it would mean that aib is losing more money than it would have, had it issued you with a standard variable or fixed rate mortgage. This would cost me more through increased bank charges, decreased interest on savings and possible increases in taxes to cover the loss.

I don't buy the argument that because its a state asset it should give you what you want. I want cheaper lotto tickets but I don't get them. The esb costs my family more than the offer aertricity gave.

I know banks lose money on tracker mortgages.

Its the same loan because its the same loan.

The process would be:
Sell house, take proceeds, add savings, buy much larger house.

Keep repaying mortgage loan in exactly the same way, but secure it against the new property.

For me it makes sense because I dont lose the tracker.

For the bank/state it makes sense because if I cant do it, then I cant trade up and so the loan remains secured against a property it has negative equity on;

Secondly, the transaction is net new money into the property market, which overall boosts the value of property assets in this country (property being the state's single biggest asset via NAMA).

Thirdly, I pay a higher property tax on the new place as well as stamp.

Bruthal

Tombo2001 wrote: »

I know banks lose money on tracker mortgages.

Its the same loan because its the same loan.

The process would be:
Sell house, take proceeds, add savings, buy much larger house.

Keep repaying mortgage loan in exactly the same way, but secure it against the new property.

For me it makes sense because I dont lose the tracker.

For the bank/state it makes sense because if I cant do it, then I cant trade up and so the loan remains secured against a property it has negative equity on;

Secondly, the transaction is net new money into the property market, which overall boosts the value of property assets in this country (property being the state's single biggest asset via NAMA).

Thirdly, I pay a higher property tax on the new place as well as stamp.

You would possibly be better making some sort of appointment to see a manager about that. Calling on the phone is more likely to get fixed responses to the usual standard FAQ people have.

killers1

Tombo2001 wrote: »

I know banks lose money on tracker mortgages.

Its the same loan because its the same loan.

The process would be:
Sell house, take proceeds, add savings, buy much larger house.

Keep repaying mortgage loan in exactly the same way, but secure it against the new property.

For me it makes sense because I dont lose the tracker.

For the bank/state it makes sense because if I cant do it, then I cant trade up and so the loan remains secured against a property it has negative equity on;

Secondly, the transaction is net new money into the property market, which overall boosts the value of property assets in this country (property being the state's single biggest asset via NAMA).

Thirdly, I pay a higher property tax on the new place as well as stamp.

The bank still have to fund the new mortgage from their lending reserves which were purchased at a much higher cost than tracker rates. The sale proceeds are used to pay off an existing debt off loan book which was funded by money purchased at a much lower cost. It's not the same loan - it's the same loan amount.

BuffyBot

Closing this as the OP got his answer.

By the by, getting an answer you don't want to hear does not entite you to lash out. Act civil, or don't post on this forum

As a sidenote: Even as a majority state owned institution, AIB (or any of the others) has to operate as a commercial entity or it will never exit that state.