All,
Glad to see this website is still going strong - I had forgotten how useful and informative it can be! Emigrated myself 8 months ago for a new Job in London which has been a succesful move (espeicially as the banking sector I left in Ireland has gone from bad to worse!). It has been very interesting to see the level of Irish people moving to the UK in search of work, but I suppose it is a sign of the times (although I think I read a statistic that more are hitting Oz at the moment!).
Anyway, enough of a ramble and more to the point - when I left Dublin I had a mortgage on an apartment which has, of course, dropped 40% in value from the time I bought it. I have been fortunate that I have a tracker mortgage (ECB+1.15%) which has kept the costs to a minimum, but my rent still doesn't cover the three remainign costs I have back here (it covers about 65% of my mortgage, management company fee and life insurance). While not overly punitive on its own, costs in the UK haven't been teh cheapest (i.e. rent etc!) and the shortfall has been a bit of a stretch recently (I have a family now which I did not when I lived in Dublin). Also, with interest rates set to rise in UK and ECB land at some stage this year (and keep rising) I'm afraid my position is not going to get any better, and only go one way!
As a result, I have started doing some research (such as this site!) on what options people are currently doing in Ireland these days as I'm a little out of the loop - I have seen some interesting threads, so many thanks for the people who have already contributed to my knowledge base.
As far as I see it I have three options:
1) Sell
In rough numbers, I have a mortgage of around €350k and I think I would be lucky to sell for much over €200k in the current environment. It's a wonderful apartment, loveley location but noone is buying so prices have plumetted. As you can see, I would have a negative equity check of about €150k, which unfortunately exceeds my meagre savings by a little! So, if the bank were to give me permission to sell, which is uncertain as far as I can tell, I would have to get a personal unsecured loan for €150k which I can't imagine the bank granting. I have read here anicdotal reports of a bank rolling the negative equity on the terms someone has left on their mortgage (i.e. 31 years at the tracker rate). I imagine this is rare?
2) Interest Only
Try to get the bank to agree an interest only option for a large period of time (i.e. 5 years). Currently, I'm repaying around €8k capital repayments p.a. which have greatly lagged the fall in property prices. The interest only, while not a solution, postpones the time I have hopefully a better job, more pay etc to then perhaps do something about it. My question here is would the bank make me move onto an Investor Mortgage rate, which I assume is about 5% - this would then really defeat the purpose of me changing my outgoings. Are there other implications of me changing to an interest only option that I haven't thought of (apart from tax implication of rent exceeding interest payments?).
3) Bankruptcy
There has been a surprisingly large amount of chat on this site on declaring myself bankrupt in the UK to clear Iirsh debt. While I qualify for it (resident in UK etc) I am still not fully aware of the ramifications of this. Don't get me wrong, I don't liek this idea, but the more I know the harder I can negotiate with my mortgage provider (Ulster Bank). It is not an option I wnt to use, but need to know what actually happens once I go down the route (I believe I cant work for an FSA regulated company which I think automatically stops me from doing it!!). But, even the potential threat of it might help me negotiate a better deal?
Apologies for the long-winded post, but what are people's opinions on the above? Have I missed any other options?
Cheers,
K
Glad to see this website is still going strong - I had forgotten how useful and informative it can be! Emigrated myself 8 months ago for a new Job in London which has been a succesful move (espeicially as the banking sector I left in Ireland has gone from bad to worse!). It has been very interesting to see the level of Irish people moving to the UK in search of work, but I suppose it is a sign of the times (although I think I read a statistic that more are hitting Oz at the moment!).
Anyway, enough of a ramble and more to the point - when I left Dublin I had a mortgage on an apartment which has, of course, dropped 40% in value from the time I bought it. I have been fortunate that I have a tracker mortgage (ECB+1.15%) which has kept the costs to a minimum, but my rent still doesn't cover the three remainign costs I have back here (it covers about 65% of my mortgage, management company fee and life insurance). While not overly punitive on its own, costs in the UK haven't been teh cheapest (i.e. rent etc!) and the shortfall has been a bit of a stretch recently (I have a family now which I did not when I lived in Dublin). Also, with interest rates set to rise in UK and ECB land at some stage this year (and keep rising) I'm afraid my position is not going to get any better, and only go one way!
As a result, I have started doing some research (such as this site!) on what options people are currently doing in Ireland these days as I'm a little out of the loop - I have seen some interesting threads, so many thanks for the people who have already contributed to my knowledge base.
As far as I see it I have three options:
1) Sell
In rough numbers, I have a mortgage of around €350k and I think I would be lucky to sell for much over €200k in the current environment. It's a wonderful apartment, loveley location but noone is buying so prices have plumetted. As you can see, I would have a negative equity check of about €150k, which unfortunately exceeds my meagre savings by a little! So, if the bank were to give me permission to sell, which is uncertain as far as I can tell, I would have to get a personal unsecured loan for €150k which I can't imagine the bank granting. I have read here anicdotal reports of a bank rolling the negative equity on the terms someone has left on their mortgage (i.e. 31 years at the tracker rate). I imagine this is rare?
2) Interest Only
Try to get the bank to agree an interest only option for a large period of time (i.e. 5 years). Currently, I'm repaying around €8k capital repayments p.a. which have greatly lagged the fall in property prices. The interest only, while not a solution, postpones the time I have hopefully a better job, more pay etc to then perhaps do something about it. My question here is would the bank make me move onto an Investor Mortgage rate, which I assume is about 5% - this would then really defeat the purpose of me changing my outgoings. Are there other implications of me changing to an interest only option that I haven't thought of (apart from tax implication of rent exceeding interest payments?).
3) Bankruptcy
There has been a surprisingly large amount of chat on this site on declaring myself bankrupt in the UK to clear Iirsh debt. While I qualify for it (resident in UK etc) I am still not fully aware of the ramifications of this. Don't get me wrong, I don't liek this idea, but the more I know the harder I can negotiate with my mortgage provider (Ulster Bank). It is not an option I wnt to use, but need to know what actually happens once I go down the route (I believe I cant work for an FSA regulated company which I think automatically stops me from doing it!!). But, even the potential threat of it might help me negotiate a better deal?
Apologies for the long-winded post, but what are people's opinions on the above? Have I missed any other options?
Cheers,
K