Will doing a deal with the bank lead to bad credit ??

9

9332edward

Guest
Hi
I was wondering if you done a deal with the bank to pay off the the mortgage would it result in bad credit.

Say one had a mortgage of 400,000..
Say the house sold for 300,000..

If one had 50,000 in savings and offered this to the bank with the 300,000 from the sale of the house. Would the bank be prepared to write down the remaining 50,000 with it affecting your credit ??
 
Hi Edward, the short answer is Yes. It would be entered in to the database on ICB (Irish Credit Bureau) as a debt settled for less than the amount owed. Saying that, in today's climate it may be viewed less seriously by financial institutions as you have made a clear effort to repay the debt. Good luck with the negotiations and stick by your position.
 
Edward., john2010 I cannot see how doing a deal i.e. a mutually acceptable transaction can result in you getting a bad credit rating. You will have paperwork to show that the Bank accepted your offer, in full and final settlement of the debt.
I dont know how the ICB records would reflect such a deal, but it certainly is not a default on the loan repayment.
 
It would depend on the terms of the deal.

Some could be write off (damage icb) others may be a discount that wouldn't.

Any example that wouldn't effect would be the current PSTB offer.
 
Mizen Head said:
Edward., john2010 I cannot see how doing a deal i.e. a mutually acceptable transaction can result in you getting a bad credit rating. You will have paperwork to show that the Bank accepted your offer, in full and final settlement of the debt.
I dont know how the ICB records would reflect such a deal, but it certainly is not a default on the loan repayment.
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Hi mizen head, I don't make the rules up unfortunately, I just responded in a factual way. The ICB record all loans settled for less than the full amount as code "L". I agree with your sentiments but unfortunately that's the way the system operates. However, as I said earlier, in current climate it may not be viewed so badly given the fact that they are making a settlement on a home in negative equity. It's nowhere near as bad as a default or a loan in arrears.
 
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