Don't want to lose savings to mortgage!

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Tinney78

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Hi all. Me an my wife are due our first child in July and we are trying to reduce our mortgage. My name is not attached to the mortgage whatsoever. We are with aib and our mortgage is 1700 a month. We have savings of 45000 due to my wife selling her shares in a business she started, which we do not want to throw away to a mortgage!! Our long term plan is to relocate from dublin to limerick but this won't happen for 2 years or so! Our 30k of our savings is in an aib joint account while 15 k is in a cu account in my name. These are savings we want to use for our relocation. So the question is can we restructure our mortgage as my wife will now only be recieving social welfare payments. Can they make us use our savings to pay full mortgage. Should an how could we hide savings from them?? Am I responsible for this mortgage when I'm not on mortgage but we are married. Thanks in advance
 
You have not given very much financial information.
What do you mean by not wanting to throw savings at a mortgage? Is the €1700 all interest? If not, some of this is capital which is paying back the sum borrowed. Hardly thrown away.
Is there negative equity ?
You are not liable for the mortgage but if you are living in the property you should be contributing something toward it.
I doubt you will get advice on how to hide savings from a bank and anyway AiB have visibilty on 30k of this. Why would you want to hide savings from the bank and then expect the bank to do a deal based on an inability to pay? However, if there were no savings, and your wife was struggling to pay, that would be entirely different.
 
House is in negative equity by 20-30k. The 1700 represents full mortgage repayments. What I'm trying to say is that we want to do a deal with bank to reduce our mortgage repayments to 1200 cause with my wife not working its what we can afford. The 45k in savings we don't want it to be swallowed up to meet mortgage repayments when we are gonna need that money for when we re-locate
 
No one here will give you advice on how to defraud your bank.

I gather your wife has a mortgage with AIB. She should either continue
paying the mortgage or sell the house.

If you are honest with your bank about your circumstances, I doubt that they will allow you to make smaller payments.
 
Tinney78 said:
House is in negative equity by 20-30k. The 1700 represents full mortgage repayments. What I'm trying to say is that we want to do a deal with bank to reduce our mortgage repayments to 1200 cause with my wife not working its what we can afford. The 45k in savings we don't want it to be swallowed up to meet mortgage repayments when we are gonna need that money for when we re-locate
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Stay classy Tinney78 .
 
I'm not trying to defraud anyone!! I'm trying to protect savings for us to be able to have decent start when we can sell the house to relocate
 
Is it not six of one, half dozen of the other! If you keep paying full payments the balance owing will be less when you sell so while your savings will go down so will the amount of the mortgage. If you reduce your payments you will keep your savings in place but will have to clear a bigger mortgage.
 
OK, If you're not defrauding your bank (even though you earlier asked if you should be hiding the money from them !!) and you sell the house, any negative equity will have to be paid back from your savings unless you can come to another arrangement with the bank.

If you apply to the bank to repay less on the mortgage each month , they will immediately ask you to fill out an SFS (single financial statememt) which summarises all your income and expenses and all your assets and loans. You will have no real options but to come clean and disclose everything.

In the end of the day, the 45000 is not savings at all, its compensation your wife received for selling her business and giving up her income. I think the bank will see very clearly that the money received in this way needs to be used to pay down the mortgage.
 
At the moment your paying your full mortgage and the 45,000 isn't in any way regarded as security on your mortgage I assume.
Just move the money to a different bank or that credit union account you mentioned.

I assume you only want to reduce your mortgage repayments for a while ? That your wife will be going back to work after her maternity leave.
Just ask the bank nice and friendly would they mind reducing your repayments for the duration of your wife's maternity leave.
I wouldn't think they'd have a problem with that.
 
I think the bank would probably be amenable to your wife going interest-only at least during her maternity leave (unless she is on a particularly low tracker) so I would start by asking for that. But as pointed out above, if you go interest only, the negative equity will not be reducing every month as it is at the moment when there is capital being repaid. So if she is in 30K negative equity now, she will still be in 30K negative equity in a year's time unless house prices pick up and reduce the NE that way. So when you come to relocate, there will be NE to be paid off that your wife will have to use her savings to repay. It might be different if it was YOUR savings and HER debt but the savings came 100% from her so there's really no way to shield them from her overall liabilities.
 
Your wife-and you are not that badly off. Read some posts from people struggling with little or no income, and negative equity of 100,000's etc. They would love to have savings like you as they buy you options and time. You cant just decide that you would prefer to put the money to something else that suits you better.

Anyway, unless there is something we don't know, with a baby on the way, you and your wife should keep up the full repayments of 1700. Based on your timeline for moving in 2yrs, that equates to 12,000 (500 x 24), some or all of which is capital. This still leaves you with combined cash of 33,000 to go towards any shortfall on the mortgage come sale time.

Alternatively, sell the house now, settle up with the bank and rent somewhere cheaper than 1200pm. Then you can build up some savings again to help with the relocation. But with the baby on the way, and currently no bank hassling you or your wife, staying put seems a far better course of action.

It is important to bear in mind that you have no liability to the bank should your wife not be able to pay at a future date-but it is your home too, so with so little negative equity, paying seems the best option. As stated already, your wife could ask for a capital holiday but that won't leave you both any better off come sale time.

Finally, while you say you do not want to defraud the bank, in your first post you did ask for advice on how to hide money from them. If you did that, the financial information given to bank would not be truthful. The bank would consider that fraud!
 
I asked should and how?? It's not like we are trying to stash millions out of reach. It's our nest egg. Money two of us worked very hard for an with a baby on the way we want to be able to have some comfort in knowing that we have a rainy day fund! You tell me to read posts about people in worse positions than us well as far as I'm aware I'm entitled to ask a question as well as those people!! 11 months ago we were in debt to the tune of 80k. We sacrificed an awful lot to be in the position we are now in. My wife worked around the clock an I to this day work a 70 hour week for a not so huge salary. We haven't been out socialising or throwing away money. We have no sky or broadband. We have 1 car when 2 is required. We watch every penny so that we can be comfortable when our child arrives. All we want is to be able to live a little when our child arrives an not to be held over a barrell by a mortgage!!
 
You'll be about €2,000 better off after 2 years if you pay down your mortgage with the €45,000 and save the difference between the current payment and the reduced payment.

Assuming a mortgage interest rate of 4.5% and a net savings rate of 2% on a €305,000 mortgage over 25 years.
 
To manninp2 can you explain. I appreciate advice are you telling me to pay 45k off mortgage then re negotiate the terms?
 
You are getting good advice here. Why do you think things are so bad? They are not. Your wife owes AiB any shortfall on sale and they will pursue this and it will be stressful. With a new baby do you really want this when it can be avoided? Keep paying and hopefully the house will sell for close to what is owed to the bank. You walk away with cash and a clean sheet. Think about this!!!
Yes, you asked the question should and how can I hide money-and then you deny an intent to defraud anyone....really?
 
I never said things were so bad! I asked for advice that was all. Asking should I hide money is asking advice! I don't have a financial brain hence I'm here seeking advice
 
Why not put up your full financial details (case study format) and people can look at options for you and your wife.

I would not recommend paying all your savings (as advised above) now to the bank to reduce the capital amount outstanding. The savings are your buffer for the next two years.
 
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