Releasing equity in our Mortgage. Is it possible at the moment?

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gazzer

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Hi. I’m looking for some advice and thought I would ask here. Myself and my partner are homeowners, both working in full time jobs in the Civil Service. We earn €40,000 each (before pension deductions etc) Through some bad decisions on our part over the years we have accumulated a fair bit of debt and we are looking at ways to manage it. We are able to pay our bills and loans each month and have never missed a payment but we have found that we have very little each month left to put into savings.

We currently have the following outgoings

Mortgage €1040 per month (17 years remaining)

Car Loan €230 per month (1 year remaining)

Personal Loan €310 per month (3 years remaining)

Credit Union Loan €550 per month (3 years remaining)


There is currently €155000 left on the mortgage (17 years). I have looked at asking prices in the locality for similar houses and they range from €230000 to €250000. So potentially there is equity there of €29000 that would still keep us just under the 80% loan to value ratio. If we could get that amount we could pay off the Credit Union Loan and Car loan in its total. I could then use the €11000 that we have in Credit Union savings to pay off the Personal Loan.

I know it means that we are paying off the loan over a longer period and that we would be eating into our Credit Union savings but potentially we could save around €800 a month in debt payment and after a year or two when we have built up some savings we could start paying extra off the mortgage each month.

We approached BOI about remortgaging but they were not interested. So we are looking at moving our mortgage and if it was possible to release some equity in the house at the same time. Has anybody any recent experience of this that they could give me some advice on?

Thanks in advance
 
I just had a look on the Pepper Website. It seems that they only deal with certain areas in Ireland. Unfortunately Cavan is not one of them.
 
gazzer said:
I could then use the €11000 that we have in Credit Union savings
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You have €11,000 in CU savings? And you are having problems paying your loans?

gazzer said:
Credit Union Loan €550 per month (3 years remaining)
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This suggests that you have a loan of around €18,000.

So why don't you insist to the Credit Union that they set the shares against the loan and reduce the net loan to €7,000?

This would reduce your monthly repayayments on the CU loan by about €350 per month.

Brendan
 
We are not actually having problems paying my loans. I just dont have much spare cash left at the end of the month. I could offset my CU shares against the loan but that would only reduce my total monthly outgoings by approx €200 a month. If I could go down the remortgage route I could reduce my monthly repayments by approx €800.

I can continue as is for the foreseeable future if remortgaging is not an option as luckily we have a guaranteed income and we have no additional expenses coming up. If we have to continue as we are then I will just look to switch mortgages.
 
gazzer said:
I could offset my CU shares against the loan but that would only reduce my total monthly outgoings by approx €200 a month.
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Why don't you do that? What rate of interest are you paying on your CU loan? What are you getting on the deposit?

Having lower loans and outgoings might make BoI look again at your proposal.

Brendan
 
Thought I would give an update on my original post. I had a meeting with a mortgage broker last week in Dublin. With his help I have applied to 4 different banks for a switcher mortgage with equity release and to pay off our BOI personal loan. The broker seems to think that everything should be ok but I wont know until later in the week. Hopefully it will work out.
 
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