Split Mortgage review

[2adults2kidsDub]

Hi,

over 2 years ago we got a split mortgage from our lender KBC . In the meantime our financial position has stabilised, and the value of our house has gone up sufficiently that it would be touch and go whether it would still be in negative equity. It probably would, but only 20-40,000 as opposed to the 150-250,000 that it was at the time.

At the time, the lender indicated there would be a review at the 3 years through the term - we have two concerns, a) that they may not continue to warehouse any part of the loan - which would put us in an extremely difficult financial position again and b) that if they do that, they will be able to force a sale and with the relatively low negative equity it may even be in their long term best interest to do so.

Has anyone gone through a review and if so could they let us know (by Private message if that's easier for you) what it entailed.

We don't know if it's going to be possible, but we did also think about trying to see if we could raise 100% of the non-warehoused portion and say 40/50% of warehoused portion in full settlement from Family if people thought that a financial institution might take that offer seriously - we would commit to paying back family over an extended period, but would also have the security of knowing that we wouldn't be going near a repossession situation! We don't want to go forward with an offer like that if it wouldn't be taken seriously as it would clearly allow them to feel confident that family might help out if they put us back on paying the full amount of the loan.

Thanks in advance.

 

[Danny Boy]

I'm in a split mortgage for the past few years also & like yourself I was advised that it would be reviewed after 3 yrs throughout the term of the mortgage.
I think the 3 yrs are up in August so it would be handy to know if the reviews are actually taking place.
The house value hasn't increased much since so I'd imagine I'm still in excess of 100k in negative equity. My personal situation hasn't improved either so I would hope the terms stay the same if there is a review.

My understanding is that any lump sum payments are taken off the warehoused portion. Split mortgages are fairly new so I'd imagine the first reviews are only happening now but does anyone know if lenders are doing deals on any lump sum payments or would they be mad when a guy can now go back on full payment if they base it on a new SFS showing savings??

 

[Brendan Burgess]

OK,

Like most banks, KBC won't do a deal on the warehoused amount, especially if you are close to positive equity. ( AIB would do a deal)

They will just look at your affordability. They won't worry too much about the negative equity.

If for example, you are meeting the repayments on a mortgage of €200k with €100k warehoused, and they think that you can afford to meet the repayments on €250k, they will move €50k to the main mortgage.

Brendan

 

[Mauritius]

Danny Boy, I got a single page automated letter from KBC at the end of my first three years of split mortgage .(That was end of April this year.) It simply stated that if my circumstances had changed, I should contact them. If not, I am not required to do anything. Obviously they don't have the manpower to do full financial reviews on all their warehoused mortgages every three years. And the way the paperwork is drawn up, it's up to me to notify them that my circumstances might have changed. Even if I won the lottery, why would I tell them, if I am still living in the property. The split mortgage is for the full term of the loan. When they gave me a tracker rate for 'the full term of the loan' back in 2007, they still managed to take it off me two years later (January 2009). I will never let KBC shaft me again.