Family home and 3 buy-to-lets - going for a PIA

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BrokeGuy

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Hello all,

I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.

I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)

The mortgage on my home is €289k, it is a tracker with BOS and we are just paying interest (€700 per month). Originally it was a 25 year loan for €310k so only €20k cleared from it. Ouch.

Anyway reading all the PIA examples etc I am thinking the best I can hope for is to go into this misery PIA for 6 years, live on bread and water and walk to work etc (exagerrating a little) and in the meantime the rentals will be sold, transferred to "unsecured debt" and more or less written off. That will also apply to my credit card and other loans but luckily for me the total of them is only €2k or something.

Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great.

As I am on a tracker I can't avail of a lower interest rate.

Because I am 34 they will hamper me with this huge term unlike those in their 50s who will get their lovely write-offs leaving the younger generation carrying the can. That's fair!

Does anyone think I am way off on that prediction? Problem is that is seems rather pointless to me because banking on working continually for the next 35 years to pay off the mortgage is like putting €100 on Stoke to win the league - far fetched.

Is there any other option? I'd love to keep the house but I feel I am being penalised for being within an age bracket where they can increase the term of the loan and that is hard to bear given I have 3 kids and come 10 years time all 3 will be in school and require education funding etc.

Sorry....
 
I actually don't really see your point......
All your investment properties will be written off - no effect on you, you'll then have 30 working years (most people's mortgage) in which you will pay off the home you want to stay living in..... Why should you have your debts cleared quicker than an average mortgage given unlike people in their 50's who only have a good 15 years full income in order to clear theirs.
A tracker is a pretty low rate... You want lower? And you'll be out of the PIA by the time your kids start the big expensive of secondary school.
I think it's an unjustified moan
Perhaps I'm being a bit harsh :/
 
Last edited:
Baby blues...

Fair assessment but critical points missed; when you buy a house over 35 years you usually start of with a loan to value of 90%, like I did. Worse case you are thinking that 10 years down the road if I am sick or something the loan to value could be 75% so if I had to sell I am not crippled with debt.

In this case you would enter into a loan for 35 years with a loan to value of 192% meaning the same instance you'd still owe circa 160% in 10 years time making it seem rather pointless?
 
Perhaps move to one of your investment homes... Sell the expensive house and keep a cheaper one?
 
Why don't you include your PPR with the PIA, allow the PPR to be sold with your investment properties and start fresh in six years ?
 
BrokeGuy said:
Hello all,

I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.

I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)

The mortgage on my home is €289k, it is a tracker with BOS and we are just paying interest (€700 per month). Originally it was a 25 year loan for €310k so only €20k cleared from it. Ouch.

Anyway reading all the PIA examples etc I am thinking the best I can hope for is to go into this misery PIA for 6 years, live on bread and water and walk to work etc (exagerrating a little) and in the meantime the rentals will be sold, transferred to "unsecured debt" and more or less written off. That will also apply to my credit card and other loans but luckily for me the total of them is only €2k or something.

Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great.

As I am on a tracker I can't avail of a lower interest rate.

Because I am 34 they will hamper me with this huge term unlike those in their 50s who will get their lovely write-offs leaving the younger generation carrying the can. That's fair!

Does anyone think I am way off on that prediction? Problem is that is seems rather pointless to me because banking on working continually for the next 35 years to pay off the mortgage is like putting €100 on Stoke to win the league - far fetched.

Is there any other option? I'd love to keep the house but I feel I am being penalised for being within an age bracket where they can increase the term of the loan and that is hard to bear given I have 3 kids and come 10 years time all 3 will be in school and require education funding etc.

Sorry....
Click to expand...

You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term.

Had you continued on the PPR mortgage then you would have paid at least 450k over the term.

Forget about the value of your house, many people are in NE. In writing off so much debt you are free to start again, you have your home, the payments are manageable.

If you are employed then at some stage your income will rise, as will house prices.

I think you are looking at the glass half empty in this situation.

As well as looking for a mortgage write -down (when you got 3), you are looking to have your NE wiped out as well.


Instead of looking at 50 somethings who get "lovely" write-offs, maybe take into consideration the other section of the population who didn't go mad, or if they did then who are still paying their mortgages on much reduced earnings - these people, who duly pay each month, are entitled to nothing.
 
Also those 50 something's have
Probably being paying mortgage for the last 20/25 years.
This isn't a get at broke guy it's a your not gonna do that badly.....
As commonsence said, glass half full.....
 
commonsense said:
You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term.

Had you continued on the PPR mortgage then you would have paid at least 450k over the term.

Forget about the value of your house, many people are in NE. In writing off so much debt you are free to start again, you have your home, the payments are manageable.

If you are employed then at some stage your income will rise, as will house prices.

I think you are looking at the glass half empty in this situation.

As well as looking for a mortgage write -down (when you got 3), you are looking to have your NE wiped out as well.


Instead of looking at 50 somethings who get "lovely" write-offs, maybe take into consideration the other section of the population who didn't go mad, or if they did then who are still paying their mortgages on much reduced earnings - these people, who duly pay each month, are entitled to nothing.
Click to expand...


Agree with everything here, you are getting a write off of over €200k. You should be happy with that as you can still keep your PPR and have a fresh start. There are people in much worse situtions were they will lose everything.
 
My husband and I decided against taking the phenomenal mortgages some years ago as we worried about having an unsustainable loan in the future. We now can't get a mortgage due to being self employed and cannot see a way out of this. We are paying 1k a month off someone else's mortgage (rental) with no hope of putting a permanent roof over our childrens' heads. So forgive my lack of sympathy....
 
BrokeGuy said:
Baby blues...

Fair assessment but critical points missed; when you buy a house over 35 years you usually start of with a loan to value of 90%, like I did. Worse case you are thinking that 10 years down the road if I am sick or something the loan to value could be 75% so if I had to sell I am not crippled with debt.

In this case you would enter into a loan for 35 years with a loan to value of 192% meaning the same instance you'd still owe circa 160% in 10 years time making it seem rather pointless?
Click to expand...

Actually you are the one that is missing the point - the value of pretty much anything you invest in can go down as well as up! There is no guarantee that your investments will always go up end of story!
 
BrokeGuy said:
Hello all,

I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.

I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)

The mortgage on my home is €289k, it is a tracker with BOS and we are just paying interest (€700 per month). Originally it was a 25 year loan for €310k so only €20k cleared from it. Ouch.

Anyway reading all the PIA examples etc I am thinking the best I can hope for is to go into this misery PIA for 6 years, live on bread and water and walk to work etc (exagerrating a little) and in the meantime the rentals will be sold, transferred to "unsecured debt" and more or less written off. That will also apply to my credit card and other loans but luckily for me the total of them is only €2k or something.

Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great.

As I am on a tracker I can't avail of a lower interest rate.

Because I am 34 they will hamper me with this huge term unlike those in their 50s who will get their lovely write-offs leaving the younger generation carrying the can. That's fair!

Does anyone think I am way off on that prediction? Problem is that is seems rather pointless to me because banking on working continually for the next 35 years to pay off the mortgage is like putting €100 on Stoke to win the league - far fetched.

Is there any other option? I'd love to keep the house but I feel I am being penalised for being within an age bracket where they can increase the term of the loan and that is hard to bear given I have 3 kids and come 10 years time all 3 will be in school and require education funding etc.

Sorry....
Click to expand...

You seem rather woebegone and sorry for yourself brokeguy. You need to rethink your attitude, it will do nothing but harm you if you focus on "woe is me"
1) You are healthy
2) You are in your 30's
3) You are employed
4) You are being given a fresh start
5) You have a home
6) And since you say "we" - you have the support of a relationship

Honestly - stop.
Stop kicking yourself for losing on what has turned out to be stupid gamble on property.
Stop bewailing the fact that you have to deal with the consequences of that gamble for, possibly, six years (before the PIA legislation was in place, what would your options have been?).
Stop assuming the worst,
BrokeGuy said:
That loan over 35 years total a repayment of €600k for a house worth €150k.
Click to expand...
thinking like that means you are still betting on current values just now you see them in a negative light. What is worse is if you keep that up - you will start to hate your own home, better to include it in the PIA than do that.
Stop thinking that you are worse off, more shabbily treated, more to be pitied than other people.

Start
Looking at the positives in your life
Looking at what you can learn from this experience
Looking at what you can do and achieve in 6 years
Set yourself some goals, put your mind back into gear and start moving forward. Don't look back and tarry around might-have-beens.

And good luck. You are pioneering this new legislation, it is an incredibly frightening step but because you take it, others will have more confidence in following. Because you do it, financial stability will become more attainable for you personally and for others as they follow.
 
commonsense said:
You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term.

Had you continued on the PPR mortgage then you would have paid at least 450k over the term.

Forget about the value of your house, many people are in NE. In writing off so much debt you are free to start again, you have your home, the payments are manageable.

If you are employed then at some stage your income will rise, as will house prices.

I think you are looking at the glass half empty in this situation.

As well as looking for a mortgage write -down (when you got 3), you are looking to have your NE wiped out as well.


Instead of looking at 50 somethings who get "lovely" write-offs, maybe take into consideration the other section of the population who didn't go mad, or if they did then who are still paying their mortgages on much reduced earnings - these people, who duly pay each month, are entitled to nothing.
Click to expand...

I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.

The 4th property was excessive but the debt on that is actually only €45k.

Anyway...
 
Hi BrokeGuy,

I think you have some fair responses so far, and maybe some not to your liking.
Has the PIP actually negotiated on your behalf yet, with your creditors, or are you presuming this will all happen?

Stoke are currently 2550/1 to win the league,for a good reason.

Some PIPs have claimesd to have been negotiating behind the scenes with creditor in reaching deals already, thats why I'm very curious to know will you receive write-downs as described, and also keep the most expensive house out of three?

Hope things work out for you and you get a second chance in life.
 
Jim2007 said:
Actually you are the one that is missing the point - the value of pretty much anything you invest in can go down as well as up! There is no guarantee that your investments will always go up end of story!
Click to expand...

Thanks for the advice for an obvious novice here but all I am saying is that starting a repayment plan on a loan with a loan to value of 192% is madness. Seriously. Say it out loan, 192%.
 
Go bankrupt mate.....

Heard there might be an apartment to rent in Swansea close to a pub
 
BrokeGuy said:
I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.

The 4th property was excessive but the debt on that is actually only €45k.

Anyway...
Click to expand...

I'm sorry if you took it so, it certainly wasn't intended that way. I think that you have to put things into perspective and sometimes hearing a straight point of view is what is needed.

My post related directly to the circumstances you are in now, I made no reference to how you got there. Merely to how you feel hard done by in getting the balance of 3 rental properties wiped off along with other debt.

You keep referring to the 192% loan rate - but that isn't what it is. You are basing this on the current value of your home, you are asking for the Negative Equity portion of the property to be wiped out. Can you not see how unrealistic that sounds.

Thousand's of people are in Negative Equity. But they will not receive a write down because of this. You are young and have a future ahead of you. Yes it'll be tough for 6 years, but if the banks are taking a hit, the taxpayer is taking a hit, then don't you think it somewhat fair that you take some of the hit too?
 
Broke Guy; I think So-Crates and Commonsense make good points.

Knuckle down , you will be surprised how things will turn.
Some of us have been there. The difference today is there are far too many!
Your home will go up in value. Your Residual Debt will become easier. You will in time afford the Holiday.
Don,t be so fast to knock public service pensions. MOST have pensions that are POOR. We only hear about the gilded Big Boys.Again this a glib falsehood from a lazy media.
I wish you well,
 
daftpunk said:
Hi BrokeGuy,

I think you have some fair responses so far, and maybe some not to your liking.
Has the PIP actually negotiated on your behalf yet, with your creditors, or are you presuming this will all happen?

Stoke are currently 2550/1 to win the league,for a good reason.

Some PIPs have claimesd to have been negotiating behind the scenes with creditor in reaching deals already, thats why I'm very curious to know will you receive write-downs as described, and also keep the most expensive house out of three?

Hope things work out for you and you get a second chance in life.
Click to expand...

Daftpunk, I'd probably accept losing all properties to be honest it is just that the most expensive is the home and has been for 6/7 years and it is in the city where we both work so you'd logically hope that is the house we'd keep, if any.

I don't think banks, however bad, are keen on kicking the likes of us out especially when we could actually afford a "normal" mortgage so it isn't a pipe dream in hoping we could stay in the house.

This isn't a case, like I personally know of, with a guy owing 25m going into receivership and still living in a house which is 8,000 square feet! No lie. That person lives around 6 miles from me.
 
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