Advice on restructuring with my bank!

[baba]

Hi there,
I have been trying to 'engage' and arrange a long term restructure with my bank! They are reluctant to give me a term extension and have offered IO on Property 2,3&4 for 2-3 years with the caveat that all existing terms and null and void, essentially giving them control and they will want all sold after that time to reduce my overall debt. So I will end up with property 1 only (and additional mortgage to pay if i don't sell above current mortgage amount, and no income to pay for it!) I strongly believe the portfolio can work - with terms extension. Would like to hear what you think?
Property 1.
Loan 550k. Value of property 550k. Interest rate 4.65. Current Mortgage 4573pm (2150 interest). Remaining term 16yrs. Gross rent 4k. Rent after costs allowable 3575.
Property 2
Loan 285k. Value 125-150k. Rate 1.6. Remaining term 22yrs. Current Mortgage 1389 (380 interest). Gross rent 1100. Rent after costs allowable 885.
Property 3
Loan 225k. Value 225+. Rate 4.4. Term remaining 17yrs. Current Mortgage 1720 (825 interest). Gross rent 1000. Rent after costs allowable 800
Property 4
Loan 295k. Value 125k. Rate 4.4. Term ended full amount due. So need to negotiate. (had IO for 5 years) Gross rent 1000. Rent after costs allowable 750. Interest only Mortgage would be 1075 over 25 years. Section property.

If you look at it as a portfolio. I have gross rent of 7100 pm, costs allowable 1100pm, left to pay bank 6k pm (I could inject 500 max). They are in good locations and never empty.
In order to reduce the loan and make it all more workable I have offered the bank 100k in order to negotiate term extensions. (Yes I could use this and pay my full C&I for 2 years but what happens when this is used up? I can no longer afford repayments based on current terms.) If they dont agree to term, then no 100k will be given. Why would I?
I am looking to restructure so that the mortgages are in line with net rent and are sustainable.
I am currently on a fixed payment which was granted a year ago. I am not in arrears yet! and looking to agree a restructure as I will not be able to afford full C&I when it kicks in.

Idea was to extend Property 1&3 to 25 years. This would reduce their mortgage considerably. Then go IO on 4 for a term. And keep 2 as is (as its a tracker). My plan is to sell Property 3 as it has good potential, when it makes sense i.e. the market is rising, I 'hope' that I could sell in a few years and clear loan and pay additional capital off the portfolio (50-100k) - making it all more manageable.

I have a PPR with equity of approx 250k. But this not secured against any loan. So they have no access to it. And I would not plan to allow this.

Any advise thinking most welcome and hopefully this is clearer than first post!

Cheers

 

[44brendan]

It's a slim enough post on the information front. However, based on the information you provided it does appear as if the Bank should be doing a deal with you. I assume that the properties are buy to lets and as such would come under the Banks code for dealin with arrears. Normally this would not require a forced sale of properties if the borrower can meet monimum monthly payments equivalent to at least 5% of the outstanding amount. In your case this would be c5.6K pm. It will be difficult to do a long term rstructure at this time based on net funds available to service the debt, but based on the limited information provided by you, most banks would be prepared to agree to a 3 year repayment deal, with position to be re-assessed at the end of that period. You would be well advised to emply a good intermediary to put an acceptable case together and present this to yopur bank.

 

[oysterman]

To get meaningful discussion going here you will need to provide some more details.

Are you in arrears? If so, for how long, to what current level and at what rate are you falling further into arrears?

Are the loan amounts quoted including any such arrears and penalties added?

The rates you quote, do they include any surcharges for being in arrears?

You say "After all costs to run them I have 6k-6.5k pm to pay the bank". This is a little unclear: do those "costs" include the interest? do they include capital rpayments due?

What does the loan documentation say re property 4? The loan is due to be repaid or it is not; that must be clear from the loan offer you accepted.

What is your gross rental income over the last 12 months? What is it net of non-loan related running costs? What is your monthly interest liability and what is your monthly capital repayment liability? Obviously it would be interesting to break these out by property but if the loans are cross-collateralized it is largely an academic exercise.

What other collateral did you offer? Is any of the properties your PPR?

 

[baba]

Thanks Oyster man I have now tried to make things more clear. Hopefully it is. But it is a complex one anyhow.

 

[cremeegg]

You probably think that you have explained the situation clearly, but really it is clear as mud.

For example if you are not in arrears why have you been stressed for three years.

The only advice I would give based on your info. is don't even think of giving the bank €100k

 

[Bronte]

Baba, I realise you are new to AAM but I don't understand anything in your figures. So I'd say no wonder the bank cannot deal with you. If you cannot get it clear to us, how can you expect the bank to accept any proposal from you.

Can you list for each property, the rent, the mortgage repayments, interest and capital. Plus the annual costs for each.

Can you also give the details of the PPR, you might not think it's relevant, but the bank sure will.

Where did the savings come from. I don't understand why property 4 need be an issue, you could easily pay 100K off that and then it might be manageable.

But until you take the time to write out clearly on here all your figures then you cannot hope to get meaningful advice. It would also help if we knew how much of your current income you can afford to 'spend' on these investment properties.