Thursday 14 December 2017

Questions and Answers

Sinead Ryan

Sinead Ryan

QAs part of a judicial separation, I am taking over the mortgage on our house which now becomes mine. I have always paid this anyway, and without a problem, but the bank is now insisting on charging me an extra 0.5pc interest. It's the same loan, paid by the same person. Are they allowed do this?

The bank is charging you for the extra risk attached in having just one income earner as opposed to two, on the mortgage now.

And as it is effectively a new contract in their eyes, they are attempting to treat it as a separate entity from your previous mortgage arrangement but it does seem really unfair to you, I'm sure.

Karl Deeter, of Irish Mortgage Brokers, says this is an example of banking opportunism.

"Contact your bank and ask to engage with the 'transfer and release' department, but bear in mind that many staff may not even know such a department exists!

"My thinking is that if you were on the mortgage originally and got a legal separation, you might be able to 'release' your husband from the deed and transfer it to you, which would require no new loan being written or changed, and hence, no alteration to the interest rate for that reason."

It's worth the call in any event or perhaps ask your solicitor to intervene on your behalf.

QI had been in arrears for around four months. Initially, I tried to do a deal with the bank and they put me on interest only for three months, but I still can't afford the repayments. They are refusing to listen to any other option and I am tempted to avail of the new insolvency regime. Would I lose my house?

Tom Murray is Personal Insolvency Practitioner (PIP) with Friel Stafford and explains the process.

"When you contact a PIP, s/he will get an in-depth understanding of your personal circumstances and explain the options open to you.

"These depend on the type of debts, the profile of creditors, whether they are subject to a "fitness and probity" regime, the timing of any expected inheritances, pension entitlements, age and income levels.

"Key to this will be whether you have sufficient income to meet the minimum reasonable standards of income.

"If the bank is your only creditor, it is unlikely to participate in an arrangement, so direct negotiation will be necessary and may include a split mortgage, debt equity swap or if the circumstances warrant it – bankruptcy.

"Personal Insolvency Arrange-ments deal with debt secured on the family home.In order to qualify you must be working with the bank to identify a workable solution through MARP process. I would advise you to appeal the latest decision with the bank.

"If unsuccessful, make an appointment with a PIP to see if the new regime can offer a solution."

Irish Independent

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