Mortgage advice

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Fenwayprk

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Is it possible to change from variable repayments to interest only. What are the requirements or is it possible? When we originally bought our house 18 months ago it wasnt possible as my partner is not from the EU. Now that we are married would my wife be seen less as a risk by a bank or a mortgage broker. My wife previously lived in ireland and even though we are back in the states now has a work permit there that doesnt expire for another 12 months.

We are moving back to ireland in 2007 so are just thinking through all our options. We dont want to sell but with the exchange rate between the euro and the dollar it makes us strapped for cash every month. The rent we get only covers 62% of our mortgage repayments. So its either sell or look for a cheaper mortgage if possible. We want to keep the house but we cannot afford the mortgage esp if interest rates are going up in 2007.

The last time i called BOI and talked to our local mortage broker in Galway, she wasnt exactly friendly and offered little if any good advice.
 
Where were you when the current mortgage was approved? Were you living in Ireland, using the house in question as your PPR?

If so, is the bank aware that you are now renting it out?

How much equity do you now have in the property?

On the face of it, it's very hard to see any bank in Ireland wanting to do too much for you.

If you don't have a load of equity in the property (and with the rent covering only 62% of the mortgage I'm guessing you don't), your bank would be hugely exposed in the event of the property crash we may already be on the cusp of. And, of course, your affordability looks even ropier as interest rates continue to rise. If you were resident in Ireland they could pursue you but they know it'd be a hopeless cause with you across the Atlantic.

They are unlikely to believe that you are on the verge of coming back to Ireland if you look for a switch to interest only.

I think you'll have to put up with the cashflow issue.
 
oysterman said:
Where were you when the current mortgage was approved? Were you living in Ireland, using the house in question as your PPR?

If so, is the bank aware that you are now renting it out?

How much equity do you now have in the property?

On the face of it, it's very hard to see any bank in Ireland wanting to do too much for you.

If you don't have a load of equity in the property (and with the rent covering only 62% of the mortgage I'm guessing you don't), your bank would be hugely exposed in the event of the property crash we may already be on the cusp of. And, of course, your affordability looks even ropier as interest rates continue to rise. If you were resident in Ireland they could pursue you but they know it'd be a hopeless cause with you across the Atlantic.

They are unlikely to believe that you are on the verge of coming back to Ireland if you look for a switch to interest only.

I think you'll have to put up with the cashflow issue.
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Have a look at this http://www.boards.ie/vbulletin/showthread.php?t=2055033806 and think on.
 
Given that the property is an investment your lender (or AN Other if they aren't forthcoming) should allow you to switch to interest only on a straight swap basis; it's more tax efficient and you will be less likely to default on the lower payments.

Sarah

www.rea.ie
 
Sarah W said:
Given that the property is an investment your lender (or AN Other if they aren't forthcoming) should allow you to switch to interest only on a straight swap basis; it's more tax efficient and you will be less likely to default on the lower payments.
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It is both disquieting and a measure of the extraordinary lengths to which financial institutions in this country seem to be prepared to go to keep the whole (increasingly unsustainable) show on the road that they would be prepared, as an apparent matter of policy, to switch to interest only a borrower who:

  • is non-resident
  • may have very little equity (in a market showing signs of turning)
  • is having difficulty meeting mortgage payments
  • is clearly "an investor" in name only
Folks, it's time to dump those so-called "investment" properties.
 
Folks, it's time to dump those so-called "investment" properties.
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This is an example of the madness entering the market at present. I as a property investor loveto hear this chat as it means fools will sell quality rental property at a discount. Fenway if at all possible hold esp if good location etc as galway will always have good rental potential and the bank know this also. Going interest only is a good idea in your case imho. Remember with little equity in you are leveraging returns which would be a multiple of which you could earn elsewhere.
All this doom and gloom I think is media churned and it would be interesting to hear how many of these "experts" ever owned or run an investment property as from where I am looking it has never been better for the buy to let investor!
 
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