Do First Active do Interest Only

C

cazmayo

Registered User
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Hi,

I have a repayment mortgage with First Active. I am interested in changing to interest only as money is tight.

Our house was valued in 2006 at 395,000 our mortgage is 239,000.

Do they offer interest only on a residential mortgage?

Thanks,
Caz
 
More than likely, sometimes depends how long you have it, should be 2 yrs old but my advice is dont even bother asking branch or head office, just write in requesting interest only for 2yrs for example, you can always stop whenever you want, make sure if it is joint mortgage that you both sign. Only problem is you will need to make sure your life cover is level and not decreasing as the mortgage will not decrease during the interest only period so decreasing life cover will not be acceptable. Follow up your letter after few days with phone call and pester them on a regular basis until you get out the forms to sign.
 
Hi agapanthus,

Thank you so much for your reply. Will try that. We have been with them 4 years. Its a better option than borrowing more! Creche fees cripling.

Kind Regards
Caz
 
By moving to Interest only you are only building up more debt . Have you considered moving to a lender with a lower rate? Your LTV (Loan to value ratio) on your mortgage is probably close to 60% - you could get 4.6% from NIB - is this lower than your current rate?
 
irishlinks said:
By moving to Interest only you are only building up more debt . Have you considered moving to a lender with a lower rate? Your LTV (Loan to value ratio) on your mortgage is probably close to 60% - you could get 4.6% from NIB - is this lower than your current rate?
Click to expand...


I disagree. By going to interest only, you are not building up more debt.
Your level of debt is staying exactly the same in nominal terms.

In real terms, when you go interest only, your level of debt is going down every year (as inflation reduces the value of money, your loan is actually reducing in real terms).

Going interest only is a great idea if your finances are tight, you can pay off chunks of the principal in the future when your finances improve.
 
Please update the post to tell us if First Active agree to the interest only request (if possible).

Also perhaps some other posters can tell us of other mortgage products which allow interest only in Ireland on their PPR. I was always under the impression that Irish lending institutions dont like giving interest only mortgages unless its an investment property ?
 
Hi!

Well I wrote the letter and sent it off, today I got a reply saying they were giving me a month holiday payment, no explanation?? So I phoned them and said it was actually to put my mortgage on interest only, so didnt understand the letter. They said I had an offset mortgage which you cant do interest only. However they wanted to retain me as a customer and therefore if we wanted to go interest only, we should contact the local branch to discuss other mortage products.

So Im off into them tommorrow.

Im not fussed in keeping the offset mortgage as we havent saved anything significant. I guess if we had a savings account with them, and lots of money in the current account we might benefit, but at the money, its peanuts.

Will let you know if interest only is an option.

Cheers
Caz
 
Didnt realise it was an offset, there is no interest only option with that one. If you are not making use of the offsetting of savings its hard to see what they can offer as an alternative as tracker rates have risen. Might be off to NIB for you!!
 
Hi there,

Yes First Active do not offer Interest Only on the off-set mortgage, so I asked to change to a tracker mortgage with them. Believe it or not, that means a whole new mortgage, and the expense of solicitors, valuation etc.

Could they not just change over as my mortgage is with them.!!!

My husband is self employed and we had a bad year last year with me being very sick (caught MRSA in one of our dirty hospitals) and nearly died. Thus his business suffered as he couldnt work for 4 months. He is now working as a fitter for a company as a subbie, but FA wont take those wages into consideration. They will only go on last years accounts which were not healthy due to illness.

Who would look at present position (contract work/subcontracting contract). This work is ongoing and regular.

In the meantime I struggle on. Its not what I need after a serious illness.

CHeers
Caz
 
Hi,

You might be better off at this stage sticking with the offset as tracker rates have risen so much, at least the tracker is set at 1.15% over ECB. There should be no need for new income details if you are simply switching the same amount from offset to tracker, this should only be necessary if you were trying to borrow extra money. It makes no sense as you already have the mortgage anyway. Couple of months ago you could have got them to maybe pay the cost of switching to the tracker but unfortunately the way things have gone with the credit crunch they know your options for switching to another lender are limited at the moment. You can take payment breaks with the offset, maybe this would work in the short term.
 
cazmayo said:
Hi there,

Yes First Active do not offer Interest Only on the off-set mortgage, so I asked to change to a tracker mortgage with them. Believe it or not, that means a whole new mortgage, and the expense of solicitors, valuation etc.

Could they not just change over as my mortgage is with them.!!!
Click to expand...

Thats very strange - I took out a variable mortgage with First Active mid 2005, changed it to a tracker 8 months ago, and all I had to do was sign a form... no fees, valuations, etc. Call the loan officer in your branch and get them to clarify it.
 
Thank you for your advice. I have written to my Mortgage Advisor and asked for clarification. Hopefully I will be able to change and put on interest only.

It didnt make sense to me to have to go through the whole process again if I had my mortgage already with them. Just changing from one type of mortgage to another!!!

Anyway, we will see. Will let you know how I get on.

Kind Regards
Caz
 
I have an offset. When I first opened the account i asked about switching to tracker in the future (thinking about future LTV and if I had to spend my savings). They made it clear from the out set that you can hop between fixed, variable and tracker, but the offset is a completely different thing. Ie you have to get a new mortgage. So if you want to go for an Int only or tracker ,close the offset and move to a new lender.
 
Hi,

FA have got back to me and have confirmed that if I want to change to variable that it is a whole new mortgage, solicitors fees etc, and that Interest Only is not available on an offset.

I dont want to change mortgage provider as its more difficult being self employed and with having a bad year last year due to illness, not in a strong position to change.

Think I will look at short term loans and see if I can reduce outgoings by renegoiating them.

THanks anyway.

I just HATE redtape!!!!

CAz
 
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