Recent contact from PTSB re investment property mortgage - guidance on what to do next please

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Alonzo Mosely

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I would appreciate your views on a call I received from PTSB last week and what to do next. I bought a house in 2003. 25 yr mortgage on a tracker. In 2007, we moved to a bigger house and kept house 1 as an investment. Awful idea but anyway. After the crisis, rents tanked and interest rates rose so we put the house on interest only and that is how it has been since. I have never missed a payment or gone into arrears. In the last 3 years I made an arrangement to make some overpayments. My situation is better now and I am planning to make a lump sum payment and put in back on principal and interest for the remainder of the term which is 7 years. The rent should cover the monthly payment just about.

Last Wednesday I got a call from PTSB looking for an update on my plans to deal with the mortgage. I hadn't heard from them in 2 or 3 years. I explained my plans and they seemed happy about that. On Friday, my wife (also on mortgage) received a call from the same PTSB person. The PTSB person said that the loan was a home loan and should have been reassigned as an investment loan and would we mind filling in a form to convert it to this. I was in the house when my wife received the call so we both conferenced in. I explained that I did not understand. Our current home loan and the investment loan were both with PTSB and both were arranged at the same time and this issue was never raised before in my dealings with the bank. My feeling is that they have found something in our records that gives them some kind of exposure. I think that if I signed the form then my rights to the property could be reduced and they could try to force a sale at a later date if things did not go to plan. i.e. it would no longer be a home loan so not a "home" as such and easier for them to force a sale.

If I look at the account is it is called "End/IO Home - Standard Variable Rate". Current rate is 3.6%. We used to have a good tracker rate on this loan but were forced to give it up when we bought the second house.

I found the whole conversation and approach very strange and I am minded not to sign anything and perhaps to investigate further with the help of a solicitor.

Any advice on how to proceed would be welcome. I am concerned that when I try to convert to principal and interest that they will try and get me to sign something else.
 
1) I don't think that there is any obligation on you to fill in forms.
2) Whatever it's called, this is an investment property. If they do take you to court, it won't be treated by the court as a home as you are not living there.
3) If the original contract entitles them to appoint a Receiver, then that would stand. I doubt that the forms they send you would make any difference to this right. If they don't have the right, the forms should not give them the right.
4) Don't do anything. If they send you the forms, you can look at them and then decide.
5) I suspect that there is nothing malicious just trying to comply with Central Bank requirements.
 
Alonzo Mosely said:
We used to have a good tracker rate on this loan but were forced to give it up when we bought the second house.
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Did you verify this at the time?
They can't just take you off a tracker. The loan agreement must specify that you will lose your tracker if you let the property.

You should get the original mortgage and check this out. Raise it with them anyway. People got back trackers when it was not absolutely clear that they should have.
 
Alonzo Mosely said:
In the last 3 years I made an arrangement to make some overpayments. My situation is better now and I am planning to make a lump sum payment and put in back on principal and interest for the remainder of the term which is 7 years. The rent should cover the monthly payment just about.
Click to expand...

Do you have a mortgage on your family home?
If so, unless you have a much cheaper mortgage rate, it makes sense to pay that off first as you don't get tax relief on the interest paid.

As you seem to have some concerns about your ability to pay your mortgage and that permanent tsb might take enforcement action, you should consider selling the investment property and not having these worries.

It is probably a good idea to do a full money makeover

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Brendan
 
Thanks Brendan. I am not concerned about it now as I have a plan to put it back on principal and interest and the rent will cover it. It did give me some sleepless nights over the years though.
 
Phone calls of this nature (in my opinion) are designed to put you under pressure to respond.

As you've noted, they can be confusing; sometimes contradictory and often without a record.

If they call again, tell them you're not free to talk & can they send a letter.

That way you have time to fully understand what is being said and consider your response.
 
The PTSB interest rate for rental properties for existing Customers is 5.8%. At least that's the rate I have been on for years. I've been making full principal and interest payments for many years and ltv < 50%. Their rate for new investment mortgage Customers is I think 4.8% but they won't extend this to existing Customers - I tried.. So I'd say to be very careful about signing anything. They may have made a mistake with you initially and should have set up the mortgage as an investment / RIP mortgage when you moved house. They may now try to rectify this mistake on their side and move you from your current 3.6% rate to 5.8% and maybe even back date this higher charge
 
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