If you don't pay your investment mortgage the bank will come after your home.
Not true. Unless the family home is used as collatoral for the investment mortgage, in addition to the investment property itself, then the bank can't touch your family home. They should have no lien/charge against your family home - unless you agreed to this. It would be unusual for the bank to require additional security as the investment property was usually considered sufficient collatoral for an investment mortgage.
Yes the debt stays with the person in this country but that is a different issue. The bank still can't go after assets it doesn't have a charge over, especially if those assets have charges/liens in favour of some other institution. If the bank didn't get sufficient collatoral to cover the loan, that's their problem. They can't come back at a later stage and say Oh, we made a mistake, so now we need to take your other asset(s) now.
In theory, a creditor can get a judgement against you and all your assets. Just because someone else has a lien on an asset doesn't stop them from putting a second lien on it and claiming what is left if anything after the first creditor has been paid.
No court will grant a judgement against your home as long as you are paying the mortgage. They probably would put a second lien on it though.
Sorry I don't agree with the last bit. Say you have an investment property that you cannot afford to pay the mortgage on with Bank 1 and your home is worth 1 million with a mortgage remaining of 300K with Bank 2 which you can just about pay. When you default on the investment mortgage and investment property is sold at a loss of say 200K the balance owing will be sought by the lender on the home which has a value of 700K after mortgage. They can and will go after that house and force it's sale. They are not currently doing this because in Ireland in general 'eviction' cases are bad news for banks. Another reason for not doing it currently is the domino effect this will have. But when the two years of 'no touch' home loans is up I'd say anything is fair game. Particular where a home has a good value and is worthwhile to pursue. In the above scenario Bank 1 and 2 would get paid 300 + 200 plus costs of say 50K and home owner would get 150K.
However, in general the Courts are very reluctant to force the sale of the family home especially if the mortgage holder is not in arrears or is making attempts to pay.
And what happens Sunny in say 10 years when OP has paid back her home loan mortgage?
Sunny, i think you are missing my point. I am talking about security in respect of a performing loan. If a bank hasn't sufficient collatoral now because of a drop in property prices, they can't seek additional collatoral, in the absence of default. Banks have tried to do this. See other blogs on this issue.Sorry, but you are wrong. They are recourse mortgages. In theory, a creditor can get a judgement against you and all your assets. Just because someone else has a lien on an asset doesn't stop them from putting a second lien on it and claiming what is left if anything after the first creditor has been paid.
Sunny, i think you are missing my point. I am talking about security in respect of a performing loan. If a bank hasn't sufficient collatoral now because of a drop in property prices, they can't seek additional collatoral, in the absence of default. Banks have tried to do this. See other blogs on this issue.
If you don't pay your investment mortgage the bank will come after your home.
Not true. Unless the family home is used as collatoral for the investment mortgage, in addition to the investment property itself, then the bank can't touch your family home. They should have no lien/charge against your family home - unless you agreed to this. It would be unusual for the bank to require additional security as the investment property was usually considered sufficient collatoral for an investment mortgage.
At the end of a mortgage doucment is says "WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT". It doesn't say "WARNING: YOUR HOME and any other assets you may own IS AT RISK etc".
Sunny, this was posted by the original poster. They are not in default and both working. They are paying interest only on the investment property and continue to pay it. I was talking about this scenario - security for the loan and not default.What happens if we can't continue repayments on our investment property?
Not true. Unless the family home is used as collatoral for the investment mortgage, in addition to the investment property itself, then the bank can't touch your family home. They should have no lien/charge against your family home - unless you agreed to this. It would be unusual for the bank to require additional security as the investment property was usually considered sufficient collatoral for an investment mortgage.
You incorrectly assumed I was talking about default - I wasn't.You were talking about a defaulted loan and saying a bank couldn't come after a family home because it wasn't used as collateral.
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