Bank accepting interest only, outside loan agreement

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xttt

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I've been paying interest only on a property loan for a couple of years now as I can't afford full or partial principal repayments. This agreement has been revisited several times on a 4-5month review basis & each time my bank has increased the interest only rate based on what they call a change in borrowing from markets...or something. Anyway, to avoid hassle I have agreed time upon time to the reviewed upward rates just to keep them off my back. I got a call for a meeting next week which will result in probably another stab at trying to squeeze some principal repayent out of me. I had my last review in January during which I signed a form/contract agreeing to €700 interest only until April 2012, this date came & went with no re-call for a review & the bank have continued to accept...take!...€700 from my account each month. I remember from previously threads that this may well form a contract by virtue of the fact that they have been willing to accept this payment on an ongoing basis outside the terms of the latest contract.
I know I'm easy prey once seated opposite the man with the shirt & tie telling me the "computer says no" until I cave in & agree to overstretch my household budget to keep them happy.
I would like to know your thoughts on this as I am not exactly flush, although thank God things have improved, and it would be more managable to stay on the €700 a month until we see a bit more light at the end of the tunnel.
 
I presume that this is not for your home? The bank is not allowed to raise the interest rates for home loans?

What happens if you don't agree? You will go into arrears. Does that matter? Is your credit record clean at the moment? If it's not, you might consider going into arrears.

You should not sign any agreement without taking it away and reviewing it.

How much is the loan for? What is it secured on? Is it time to consider selling the property?

Don't be afraid to ask your acccountant or solicitor or a professional friend to attend the meeting with you.

Brendan
 
Explain what you have explained here, that you can continue with 700 no problem with a view to increasing this amount at a later date, but that if you paid any more now it would severely impact upon your household budget and possibly lead to missed payments.
 
Good points & all the stuff I should be asking myself. Although I know what the scenario in the next meeting will be..."We need to see some commitment from you & that your willing to make more of an impact on the principal, I don't think "THEY" will agree to stay on interest only for another term" ..that'll be the commercial managers line & I'll cave & probably sign something I shouldn't.
The loan was for a derelict shop with a view to converting to a restaurant, that's dead in the water now. The bank loaned me 200k (plus my own life savings) to buy it, plus 150k loan to convert. I drew down the 200k but after planning delays they refused to release the other 150k as "things have changed" a.k.a. the boom to bust, which they had covered in the small print...hence i am the proud owner of a derelict 200k loan with a building worth approx 140k best case! I could default & throw back the keys as it were, because the loan is only secured on the building itself & not my home....hmm... To be honest i don't know why I don't default & let them keep it? It's costing me 700 a month to hold onto a derelict building that I will probably never be able to repay in full...ever! and 700quid a month is a hell of alot of money....actually, I'm working 16-18 hours a day 7 days a week to keep this debt serviced! My kids don't see me & I'm absent from the house till late every day!
Thanks for that guys, i think I really need to put pen to paper & see if I can salvage anything from the bad investment I made (which by the way I agreed to & accept full responsibility for) , & if nothing is salvagable it might just be time to bite the bullet, let it go & STOP paying out 700 a month for the foreseeable future.
Hurrumph! I shall make a plan & make a stand against the bank. I'm not sure how it will go but I'm now determined, for the sake of my family, health, happiness & peaceful nights, to make it go my way! Cheers
 
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