Am dealing with IMHO since last November in relation a KBC mortgage; not much progress being made, despite great optimism at the outset by IMHO. Am thinking of seeking a second, independent opinion and not sure where to turn. Who else other than IMHO might be able to advise? Am willing to pay for independent, professional advice if that's necessary.
Seeking second opinion on unsustainable mortgage
- Thread starter Ava2016
- Start date
Brendan Burgess
Founder
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- 52,098
Why not post it here as a case study?
Information required for mortgage arrears and negative equity questions
While there is no harm in getting a second opinion, IMHO has a good relationship with KBC and they will have a good idea of what is possible.
Information required for mortgage arrears and negative equity questions
While there is no harm in getting a second opinion, IMHO has a good relationship with KBC and they will have a good idea of what is possible.
Thanks Brendan, here are some details
Income details
Net monthly- in receipt of Disability Benefit €800 per month
Amount of Mortgage Interest Supplement received -€770 per month
Contribution from family to pay interest only on mortgage of €800 per month
Personal circumstances so we can calculate your reasonable living expenses
Single adult aged 64years, medical issues
Home loan
Lender: KBC
Amount outstanding: €420,000
Value of home: 300,000
Interest rate 4.25%
Monthly repayment €1550 -interest only
Amount in arrears: none
In MARP process with IMHO and KBC
How important is retaining the family home to you?
Which of the following best describes your situation?
Would like to stay in home
What is your preferred realistic outcome?
I know the mortgage is unsustainable and have only been able to cover the interest only payments with the help of family and mortgage interest supplement. I discussed the Mortgage to Rent option with IMHO. After some persuasion, negotiated through IMHO, KBC sent out a valuer and valued the property at €335,000-property is a townhouse in the Dublin area and to qualify for MTR it must be a maximum of €300,000. Having researched the property register I found a number of properties in the same complex and similar size that sold in the past six months for €300,000 or less. I suggested getting a local estate agent to value the property but KBC will not allow this. They will only accept valuations from their own approved list of valuers. I suggested to IMHO that I get a valuer from the KBC list and get another valuation but the list is not available, they say it's for internal purposes only.
It seems that neither IMHO or KBC are keen to go down the MTR route but I believe this will be the only route that will enable me to stay in my home. Why are they not keen to go down this route?
They have offered a three year interest only extension with an agreement to voluntary sale or surrender after that. Not sure if the MIS will continue and not sure if I can continue to rely on family for contributions of approx €800 per month
Only other option suggested by IMHO and KBC is voluntary sale or surrender.
I really want to stay in my home if I possibly can.
Can KBC foreclose and if so how long will that process take?
Income details
Net monthly- in receipt of Disability Benefit €800 per month
Amount of Mortgage Interest Supplement received -€770 per month
Contribution from family to pay interest only on mortgage of €800 per month
Personal circumstances so we can calculate your reasonable living expenses
Single adult aged 64years, medical issues
Home loan
Lender: KBC
Amount outstanding: €420,000
Value of home: 300,000
Interest rate 4.25%
Monthly repayment €1550 -interest only
Amount in arrears: none
In MARP process with IMHO and KBC
How important is retaining the family home to you?
Which of the following best describes your situation?
Would like to stay in home
What is your preferred realistic outcome?
I know the mortgage is unsustainable and have only been able to cover the interest only payments with the help of family and mortgage interest supplement. I discussed the Mortgage to Rent option with IMHO. After some persuasion, negotiated through IMHO, KBC sent out a valuer and valued the property at €335,000-property is a townhouse in the Dublin area and to qualify for MTR it must be a maximum of €300,000. Having researched the property register I found a number of properties in the same complex and similar size that sold in the past six months for €300,000 or less. I suggested getting a local estate agent to value the property but KBC will not allow this. They will only accept valuations from their own approved list of valuers. I suggested to IMHO that I get a valuer from the KBC list and get another valuation but the list is not available, they say it's for internal purposes only.
It seems that neither IMHO or KBC are keen to go down the MTR route but I believe this will be the only route that will enable me to stay in my home. Why are they not keen to go down this route?
They have offered a three year interest only extension with an agreement to voluntary sale or surrender after that. Not sure if the MIS will continue and not sure if I can continue to rely on family for contributions of approx €800 per month
Only other option suggested by IMHO and KBC is voluntary sale or surrender.
I really want to stay in my home if I possibly can.
Can KBC foreclose and if so how long will that process take?
You should discuss further with whomever has your file at IMHO, your further info provided gives a good sense of where you are and what you can do about it, convey this to your intermediaries at IMHO.
it will be difficult for anybody else to step in and try representing you at mediation so stick with it, the process is very slow.
it will be difficult for anybody else to step in and try representing you at mediation so stick with it, the process is very slow.
I thought mortgage interest supplement had been done away with. Is there a ceiling on this, which is why you are only getting 770 a month.
How long has the family member been paying the interest only. Why would they do this? How are they to be repaid. I can't see the logic to this. You clearly cannot afford this mortgage.
Do you have to live in Dublin. In all honesty it would seem to me you'd be better off renting somewhere else that will be paid for by social welfare.
You said you have medical issues, does that mean you have to stay in Dublin. I would think this financial hardship is not good for you. You certainly cannot expect a family member to pay 800 Euro for another three years into a bottemless hole. If I were advising them I'd tell them to stop paying you as you won't be able to pay them back.
It seems you are not eligibile for the MTR scheme. How would this be beneficial to you, it's my understanding very few of those have been available as they are very complicated.
How long has the family member been paying the interest only. Why would they do this? How are they to be repaid. I can't see the logic to this. You clearly cannot afford this mortgage.
Do you have to live in Dublin. In all honesty it would seem to me you'd be better off renting somewhere else that will be paid for by social welfare.
You said you have medical issues, does that mean you have to stay in Dublin. I would think this financial hardship is not good for you. You certainly cannot expect a family member to pay 800 Euro for another three years into a bottemless hole. If I were advising them I'd tell them to stop paying you as you won't be able to pay them back.
It seems you are not eligibile for the MTR scheme. How would this be beneficial to you, it's my understanding very few of those have been available as they are very complicated.
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Mortgage Interest Supplement is closed to new applicants but still exists however it is not technically available where a mortgage has been deemed unsustainable so could be subject to review in this case.
Mortgage to Rent rules changed in July 2015 and although they are still fairly uncommon they the numbers have increased 85 went through last year and a more than 100 others are nearly complete. KBC are one of the banks that have put cases through. If you think the townhouse has been over valued you can appeal the decision. If the bank/local authority claim you are over accommodated this too can be appealed. A lot of the successful Mortgage to Rent cases were assisted by MABS so they might be a good source of support.
Mortgage to Rent rules changed in July 2015 and although they are still fairly uncommon they the numbers have increased 85 went through last year and a more than 100 others are nearly complete. KBC are one of the banks that have put cases through. If you think the townhouse has been over valued you can appeal the decision. If the bank/local authority claim you are over accommodated this too can be appealed. A lot of the successful Mortgage to Rent cases were assisted by MABS so they might be a good source of support.
Am rapidly running out of options with an unsustainable mortgage. Am working with the IMHO and voluntary sale or surrender with a possible write off of remaining debt is being suggested as the the only realistic option left.
My question is re voluntary sale-I may have a buyer willing to buy the property, possibly less than the banks valuation(I queried the valuation as it was above the value of recent sales of similar properties in the area). Would the bank allow me to sell the property to this buyer or would it have to go on the open market ?
The buyer/investor would consider allowing me to remain in the property and I think I would qualify for a Housing Assistsnce Package to assist with rent.
Could this be an option to enable me to remain in my home albeit as a tenant?
My question is re voluntary sale-I may have a buyer willing to buy the property, possibly less than the banks valuation(I queried the valuation as it was above the value of recent sales of similar properties in the area). Would the bank allow me to sell the property to this buyer or would it have to go on the open market ?
The buyer/investor would consider allowing me to remain in the property and I think I would qualify for a Housing Assistsnce Package to assist with rent.
Could this be an option to enable me to remain in my home albeit as a tenant?
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Brendan Burgess
Founder
- Messages
- 52,098
I presume that KBC would insist that one of its own panel handles the sale.
A lot of people would try to get family or friends to buy the house in these situations at a discount.
It seems that you are getting a great deal from KBC - a write-off of €100k.
Put the house on the market in the ordinary way and let the market decided its value.
It may go for less than the €300k you think it's worth.
Brendan
A lot of people would try to get family or friends to buy the house in these situations at a discount.
It seems that you are getting a great deal from KBC - a write-off of €100k.
Put the house on the market in the ordinary way and let the market decided its value.
It may go for less than the €300k you think it's worth.
Brendan
I'm sorry given your age and circumstances that is has come to this for you but it clearly is unsustainable. Your relation is also wasting money on the property with the €800 contribution that they will never see back, I'm amazed they see the wisdom of continuing. I note you didn't clarify this when asked earlier.
There is no way a bank will go for a buyer at less then their value, why would they, what would they gain from that, and it's also a scenario that banks are suspicious of. And you're not telling us the full story on this either as it makes no sense to a prospective buyer, but I'm putting it down to desperation on your part.
Given your financials a sale of this house and a write down of all the remaining debt is the only option.
There is more to this story as it's strange that you owe so much at 64 years of age.
I didn't see your other thread and I'll look at that now.
Thank you Brendan for your reply. Bronte, I explained that my family have supported me, not one member but several members. I have tried to explain my situation. Some of your comments are not very helpful. Yes it a desperate situation at 64 years of age and it is a lot of money as I have only been paying interest only.
I'm sorry if you find my comment unhelpful, this website is about trying to be realistic in relation to financial matters, I'm not going to paint a glossy picture where I see none. I said from the get go that it didn't look good and I note the IMHO also have come to that conclusion as has the bank. The money your relations are giving you is dead money based on what you've posted, I'm merely pointing this out, and as I already said I'm very sorry for your circumstances.
AVA2016 this site provides advice and at times that can appear unsympathetic. However the advice given to you is realistic and sympathy will not effect the ultimate outcome. The responses above are realistic and reflect the facts as you have presented them. Your mortgage is unsustainable and the only option any "friend" will have to purchase your property is on the open market (this may well be a realistic option). As the bank will be writing off a considerable element of the debt in this scenario they will need to get a realistic market value for the property.
Brendan Burgess
Founder
- Messages
- 52,098
Hi Ava
Your family is not wasting their money paying €800 a month to the bank.
Bronte's misconception is a common misconception along the lines of "rent is dead money.".
You are getting use of the house you want to live in for €1,500 per month.
The house is worth €300k, so I presume that it would cost around €1,500 per month to rent a similar house anyway.
The question is whether you can cut your accommodation costs by selling the house, and moving to a cheaper house. Unless you are prepared to share a house with others, I presume that you will not be able to do so.
A small point. You should open a current account with KBC as this will reduce the interest rate to 4.05%.
A big point - if KBC were charging fair mortgage rates, your mortgage would actually be sustainable. You would be able to afford the interest only, but you would never be able to repay the capital.
Brendan
Your family is not wasting their money paying €800 a month to the bank.
Bronte's misconception is a common misconception along the lines of "rent is dead money.".
You are getting use of the house you want to live in for €1,500 per month.
The house is worth €300k, so I presume that it would cost around €1,500 per month to rent a similar house anyway.
The question is whether you can cut your accommodation costs by selling the house, and moving to a cheaper house. Unless you are prepared to share a house with others, I presume that you will not be able to do so.
A small point. You should open a current account with KBC as this will reduce the interest rate to 4.05%.
A big point - if KBC were charging fair mortgage rates, your mortgage would actually be sustainable. You would be able to afford the interest only, but you would never be able to repay the capital.
Brendan