PTSB Split Mortgage and Options for moving home

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paddyt2006

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Hi All,

I'm just looking for advice here. I've mortgage on my family home and details as below.

Mortgage Details

Purchased in : Jun'2006
Purchase Cost : €410,000.00
Mortgage : €345,000.00 term 30+ years with PTSB

In 2009-2013, had financial difficulty and mortgage went into arrears

Total Arrears end of 2013: €28,000.00 (throughout the bad time we engaged withe the bank)

In 2014, PTSB offered the split mortgage €180,000 as primary mortgage and €150,000 as warehouse amounts.

In 2016, spouse started working as well, I moved the job and our financial situation improved. Since the property was no longer suitable for our family needs and to be close to wife work place, we rented out the house and moved into a rental property.

In Jun'2016, approached the bank our self to start pay the mortgage in full i.e., warehouse amount is merged back with interest rate 4.3%

Current Balance: €323,000.00
Value of the house: €285,000.00

Now, we would like to sell the house and buy a family home for €400,000.00 but PTSB is not allowing us to sell the house and use the proceedings to buy new house and we can't approach other vendors because of ICB record.

Current Savings:€100,000 (€40,000 our own savings and €60,000 parents support)

Note: All figures are rounded off to nearest thousand.

Any advise appreciated.

Thank you.
 
Last edited:
What are your combined salaries?

You can use your savings to pay off the negative equity.

After that, you will have a €60,000 deposit from your parents.

How much is the house you want to buy?

What ages are you?

Brendan
 
Thanks for the response Brendan.

What are your combined salaries?

€90,000 + 50,000 (contract)

You can use your savings to pay off the negative equity.

This may create shortfall for the deposit and we have no interest in keeping the investment property.

After that, you will have a €60,000 deposit from your parents.

How much is the house you want to buy?

Around €450,000

What ages are you?

42 & 35


Thanks
 
So with a €60,000 deposit and a bad ICB record , you want to borrow €390k 2.8 times your combined income, €50k of which is contract. I understand why ptsb refused. The €390k would be a LTV of 87%.

Or alternatively, you could try Pepper who might give you a €350k loan with a €100k deposit, given that you have shown responsibility.

Why was the €285k house not suitable for your needs?

It seems absolutely clear to me that your best and most secure financial future is to live in your own €285k house and use your good savings and high salary to clear down the mortgage as quickly as possible- or else build up savings as quickly as possible so that you might be able to get a Negative Equity mortgage.

Brendan
 
Thanks for your advice Brendan. The apartment no longer suits my family hence we moved out a year ago. What makes us to eligible for a Negative Equity mortgage?

Thanks
 
Lenders have their own criteria for granting negative equity mortgages. But the borrower would have to have a good credit record and would have to have the repayment capacity. It seems that ptsb has said that you don't qualify.

But the dilemma for you is that if you are in negative equity, the Central Bank LTV rules do not apply.
However, if the house value or capital repayments just tip you into positive equity, you will generally need a 20% deposit.

So the right thing for you to do theoretically, is to pay down your mortgage as quickly as possible as it will cut the interest that you pay.

If you pay the €100k off your mortgage, the LTV would be 78%( €223/€285) rate would reduce to 4%.

So instead of paying €13,800 a year (€323k @4.3% )

You would be paying €8,900 a year ( €223k @4%)

€5k is a significant saving.
 
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