UB wants me to surrender home in positive equity : Good outcome evenutally

Discussion in 'Mortgage arrears & negative equity case studies' started by Polly 123, 26 Aug 2018.

  1. Brendan Burgess

    Brendan Burgess Founder

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    36,529
    Hi Polly

    That is great news. Thanks for much for updating us.

    So what is the final agreement?
    What interest rate are you paying?
    What is the new term of the mortgage?
    What is your monthly repayment?

    I understand fully why they leave the arrears on the record. I have seen court cases where the bank is trying to get an order for possession but the arrears are "only" €10k. The bank argues that they struck out the last court case two years earlier and capitalised €100k of arrears. But the judge dismisses the bank saying "That was your choice. The arrears are only €10k."

    It's a pity you can't get the 2.3% mortgage rate. But their website does say:

    "For all other customers, our 2 year fixed rate is available to customers who are borrowing with a maximum Loan to Income ratio of 3.5 (using Income as determined for the mortgage application process) and a maximum Loan to Value of 80%."

    Under this rule, you would need an income of €34k.

    The bizarre thing about all this, is that if you owed €300k, you would probably qualify for Mortgage to Rent. But because you are in positive equity, you don't.

    Again, I would think you should tell your local TD about this. The government should be paying you Mortgage Interest Supplement to pay the mortgage interest. They secure it as a loan on your property, so that when you do sell it, it is repaid. You would not have had all that hassle.

    But well done for sticking it out. Ulster Bank is very difficult to deal with. And you were lucky to get someone good in the end.

    Brendan
     
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  2. Bronte

    Bronte Frequent Poster

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    Congratulations Polly. Delighted for you. Maybe this is a sign of the banks having some heart after all.
     
  3. Polly 123

    Polly 123 Registered User

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    Thank you everyone, it is a great relief.

    Brendan what they have done is extend my mortgage to a new term of 21 years.
    The new repayments are €674. This will leave a balance of €4570 at the end of the 21 years (which I think if i'm right is probably to do with the mortgage arrears.
    The interest rate is standard variable of 4.3% and states that this will mean I will repay more interest in total but I'm ok with that, I intend to check out if there is a better rate available to me once everything that has been agreed is put in place but as you state about there are some pre conditions that means I cannot avail of these rates.
    They specify that I do not need to do anything only adjust my direct debit amount for the new payment from February and if I do not contact them within the cooling off period of 20days that they take I accept the new conditions.

    The only thing they do advise is to contact my life insurance company to see if these changes effect my current policy. I've been paying that for about 13/ 14 years now at €82pm with cover for full mortgage paydown and lump sum to the value of approx €200k in event of death/ life changing condition. I'm hoping that I can somehow hold onto this policy because I would now have a health condition that may load any new policy, I had looked into cheaper options but couldn't find anything similar for the same figure.
     
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  4. Brendan Burgess

    Brendan Burgess Founder

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    The policy is separate from the mortgage.

    The sum assured won't change. However, it probably expires in 5 years and you would not be able to extend that.

    Don't worry about it until it matures. At that stage, if UB requires a new policy, you can get a quote and tell them that it is prohibitive which means that you are not legally obliged to have one. UB might insist but then tell them you will pay the premium off the mortgage instead. But cross that bridge when you come to it.

    Likewise, don't worry about a balance of €4,570 in 21 years. Lots will happen in the meantime.

    I am really surprised that you can't do anything about the 4.3% rate. I campaign against the high mortgage rates in Ireland but use the statistics for new business which shows them at 3.3% or thereabouts. But thousands are paying rates in excess of 4%.

    Brendan
     
  5. Polly 123

    Polly 123 Registered User

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    Thanks Brendan, I would be happy enough to keep the current policy going, so hopefully that will be possible. I'm hoping that I can work on the interest rates, I had requested them while I was waiting for them to come back to me and there was an option of 2.9% that would have been available to me to fix for 5 years but that would have been on the original mortgage term. I have all that here so I'm hoping I can use the information to try negotiate a more favourable interest rate but for now I'm just relieved to have something secure in the place for the foreseeable future.
     
  6. newtothis

    newtothis Frequent Poster

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    Polly, that's brilliant - I'm so glad it's worked out for you!

    Don't worry about either the policy or interest rate - they can be sorted out if needed down the line.
     
  7. Polly 123

    Polly 123 Registered User

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    10
    Thank you newtothis I'm delighted and thank you for your advice with my original post.
     
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  8. Korbous

    Korbous New Member

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    3
    Hi Polly,

    Glad to hear that you got gotten the term extension and based on your circumstances, I believe that you should accept this once you receive the official offer. In line with some of the other posts, its not worth worrying about the policies at this stage and wait until they mature.

    After you have accepted the arrangement and it has been set up, I would look at addressing the arrears position. Based on the original post, you were up to date on an arrangement of 620pm and arrears only began due to the delay in getting an appropriate arrangement put in place.

    If you continued to pay the 620pm then its worth writing a complaint in a few months time outlining that the arrears position of c.€5k was only incurred during a negotiation period and that if the new arrangement was backdated to the start of the negotiation period then the arrears position would be greatly reduced based on the below

    (New Arrangement amount per month) - (Amount you paid per month) x No of Months

    This would reduce your arrears amount to something like €674 - €620 X 8 months = €432.

    At least the estimated amount of €432 is an amount that you can tackle over the next year or two and after that time your credit record will be restored. I wouldn't advise to leave arrears outstanding for the next 21 years as you will continue to be reminded of this issue when CCMA Arrears letters continue to be issued on a quarterly timeframe and it could restrict you in other ways in the future.

    I understand that the last 8 months have been a battle and it might be best to take a break before having a go at the above buts it worth doing at some stage to give yourself final peace of mind.
     
  9. Polly 123

    Polly 123 Registered User

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    10

    Hi Korbous, thanks for the reply, yes I continued with the payment and was hoping it would be back-dated, I will follow up with them once the 1st new payment comes out this month, thanks for the advice