How default might affect PPR

S

Springsteen

Registered User
Messages
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Hi All,

Long time reader, first time poster.

A quick Question. We have a number of mortgages with the same bank. Our family home PPR is in both our names. My wife has 1 RIP in her name, and I have 2 RIP's in my name. Thankfully all loans are up to date and always were. All RIP's are rented and we're lucky to have a good income separate to rental income( I work, wife at home with young family ). What is the problem I hear you ask? Well there is no problem yet, and I hope there never will be. I am however starting to worry about how much further this financial crisis will take us here in Ireland. In other words if the property prices continue to fall, if austerity measures and taxes continue to erode income, if rents weaken, and if interest rates rise ( 3 loans are variable ), the situation will become unsustainable.

With that in mind, I would like to have a back up plan that would secure our home. I do not mind what happens to the investment properties. All properties are in negative equity, the PPR less so. If we had to stop paying a mortgage or start reducing the payments on a mortgage, which one should we sacrafice? Would there be an advantage to allowing my wife default ( she has no income ) or let me default. Or does it matter? If one of us defaults and the other continues to be a model borrower can they come after the family home?

Any advise would be welcome.

Rgds
S
 
Springsteen said:
If we had to stop paying a mortgage or start reducing the payments on a mortgage, which one should we sacrafice? Would there be an advantage to allowing my wife default ( she has no income ) or let me default. Or does it matter? If one of us defaults and the other continues to be a model borrower can they come after the family home?

S
Click to expand...



As your individual and joint mortgages are all with the same lender I don’t think it matters;

My mortgages have this clause and afaik it or similar is standard in most;

‘’Any other security now or in the future held by us for your liabilities in general will be security for any liabilities under this agreement’’

My understanding of this clause is all properties including your PPR are security for all loans, in the event of default on any loan the lender in theory anyway would be entitled to call in any security they hold, not necessarily the one in default.

In my case my PPR would be far more saleable than my investment.
 
twofor1,

thank you very much for your response. I was not aware of that clause. I'll check it out. That clause would give them greater control of all assets in the event of a default.

Thanks again.
Rgds,
S
 
As was said above, with some banks mortgage is called 'all sums due' mortgage, same effect.
 
Hi two for 1 and springsteen

would it make any difference if the ppr is withy a different institution than the investment properties are with ?
 
Basically, if you have a debt and you have an asset, the holder of the debt can get a judgement mortgage against the asset. If you own half an asset, they can get a judgement mortgage against your half of the asset.

If your ppr mortgage is in a different bank to the bank holding the debt you default on, it adds on a layer of legal fees (which you will likely be held liable for).
 
Thanks for all the info and comments. While not the news I wanted to hear, I prefer to be fully informed.

Best Rgds
S
 
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