Pepper has offered to reduce my mortgage rate to avoid arrears. Will I be able to switch?

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Galwaygirl81

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Hi there, I have a mortgage of circa with pepper - in arrears from a number of years ago when I went through seperation and we were sorting out assets. . My repayments have gone up 700pm over last 18 month due to rising rates. I’m at about 8% now. had continued to pay apart from one late payment but can no longer afford to due to exceptional costs (divorce, children in 3rd level) but primarily due to the increase in rates I simply don’t have an extra 700 pm.
I did an SFS and the have offered me a reduced rate s which gives me some breathing room to sort out my finances. The term has been extended which I wasn’t happy about but was told it’s my only option and arrears have been capitalized.
Overall I think it’s a good outcome - my question is if I agree to this restructure and pay the mortgage monthly payment on time without arrears for 24 months at that point will I be able to switch to a mainstream bank to a fixed rate as I will have met 2 years of payments? I would like to be in a position to be able to borrow again in the future with my new partner and want to ensure that any decisions I make now won’t affect me negatively downstream.
 
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Hi Galwaygirl

1) Extending the term is a great idea and you should be happy about it. It reduces your monthly payments and means you are more likely to be able to afford them. If you have spare cash, you can always overpay your mortgage and reduce the term.

2) What if you don't agree to the deal? You will be paying 8%, you will be in arrears and you will not be able to switch.

3) So you should agree to the deal.

4) It's very hard to know what will happen in two years. On the face of it, I think it's unlikely that you will be able to switch to another lender at that stage. But if you meet your repayments in full, you should be able to do so.

Whatever way you look at it, you have better chances of switching if you have a lower rate and no arrears.

Brendan
 
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Great thanks Brendan appreciate the quick response.
Based on the new monthly repayments I definitely think I will be able to meet them and expect my financial situation to stabilise or improve the coming 24 months all going well. So hopefully will put me back in a position to move from pepper to a provider with a fixed rate offer and some certainty down the line.
Thanks again
 
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I had missed this at the time, or if I had seen it, I have forgotten it.

Pepper Advantage Ireland launches new Temporary Fixed Interest Rate Reduction ARA solution for customers in financial difficulty

Pepper Advantage Ireland launches new alternative repayment arrangement solution for customers in financial difficulty.
blog.pepper-advantage.ie

Minister calls on Pepper to be 'absolutely clear' with customers about new fixed mortgage interest rate

Mortgage holders with non-banks and vulture funds can now switch to one of the pillar banks, says Minister McGrath.
www.thejournal.ie

It's good to see that they are actually following through on it.

Brendan
 
Not only had I seen it, but we had a detailed discussion of it.

Pepper announces details of their scheme for customers in extreme financial difficulty

This is not for the ordinary customer struggling with 9% interest rates. https://blog.pepper-advantage.ie/resources/pepper-advantage-ireland-launches-new-temporary-fixed-interest-rate-reduction-ara-solution-for-customers-in-financial-difficulty 08 September 2023 – Pepper Advantage in Ireland...
www.askaboutmoney.com
 
Pepper has offered a fixed rate of 3.5% if we fill out the financial statement. And then we will have a fixed rate for 2 years

Warehouse split mortgage

Hello we are with pepper vulture fund. No arrears on our mortage but have money in a warehouse. Interest rates are 7.8 % as we are paying over 608 euro a month on interest as we don't see our mortage going down at all only 185 euro going to capital. How can we sort this out. Should we start...
www.askaboutmoney.com
 
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Hi
Just to let you know the Term Extension/ Reduced payment will be flagged on your credit report for 4/5 years after you go back on full payments . This can be a negative when looking to switch to a main stream lender down the line.
 
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