Wants to claim hardship to avoid repaying capital on the investment property because they have bettert things to spend the money on.
Well, if that punter earns 100 p.a then they are well capitalised and should start paying off the mortgage.
I think he’s being led by example so it makes sense he should keep his money, spend it on nice cars and stuff then emigrate to the other little house he didn’t tell us about.
why should they pay? are the policitians property developers or bankers paying back there loans? are they fuck.
I don’t think you’ve been quite honest in framing the OP, DSE3Br.
This is the post.
In fairness this is a simple business decision.
He has borrowings on a rental/investment property at ECB+0.8. That’s a brilliant rate. You’d be far better off putting money into pension or almost anything else than paying off capital.
He’s not looking to default on loan, just re-negotiate to continue interest only.
No harm in him trying, they’ll likely tell get lost anyway. Likely that his loan-to-value ratio is >100% due to recent price reductions, so not the safest of loans for the bank. I’m assuming as it’s interest only it’s a bubble purchase at max loan-to-value ratio.
I think the whole interest only was a bizarre offering risk rise from the banks perspective.
Seems to me like he’s suggesting feigning hardship to stay on interest only.
Given that I am likely shareholder in the bank in question I would advocate the withdrawal of this chap’s sweetheart interest deal, which given he has been IO for a good while he must have provided sufficient breach of terms. Put him on a nice chunky “standard variable rate” instead.
I am sick of paying for liars, who then seem to blame it on the banks they lied to.
This article may be of interest to the situation
independent.ie/business/pers … 06954.html
This is the very punter who’ll say the banks are completely unreasonable if he loses a source of income, has not repaid any capital and can’t refinance…but still has a shiney beamer. The degree of personal irresponsibility that contributed to the mess we are in is often over looked. It was a significant bedfellow to the irresponsibilty of some senior financiers and politicians. The IO period has finished on his BTL, he should be moved to a reaonable P+I rate reflective of where banks are funding themselves, otherwise the rest of us are funding his lifestyle.
Symptomatic of the rot in this country - looking for a way to reduce his obligations at the ultimate expense of others!
I avoid reading AAM these days, particularly the questions, as I just start getting chest pains. I recently got into an argument there with someone who got an affordable apartment (that is, subsidised by the taxpayer - i.e, me), on a 100% mortgage (!) and now is demanding that other people’s savings should be taxed.
Ah come on guys. He needs to replace a 7 year old car and is trying to work out the best way to do it.
It more like
" I don’t feel like repaying my debts yet"
He can finance it through a personal loan at 11%-12% or through his tracker at 1.8%. Add to the mix that paying off capital will reduce his tax relief and it’s a no-brainer.
IMO, anyone that says they wouldn’t take advantage of the tracker is lying or else just a really generous person that would like to pay the banks more than they have to.
The last budget reduced that to 75% the next budget will reduce it further still or even abolish it,he owes 100k,no comment as to whether its in NE,the sooner he starts paying down capital the better,debt monkeys aways amaze me,they have no fear of loading up on borrowing and some have a massive reluctance bordering on being resentful towards actually repaying it,as a poster on that thread said the sooner he starts capital repayments the better.
f I owed 100k and was repaing it on IO,I would not be looking at buying a new car,its this keeping up with the Jones next door that has landed a good percentage of defaulters and the tax payer in this bloody awful mess…whats wrong with a 7 year old car anyway?
Why bother paying off the capital, there’s another concerted effort out there to relieve the likes of him of some of his debt. Mcfloppy and others want an amnesty so a young go-getter like him can buy that motor and stimulate the economy.
According to “A New Beginning” his bank had a duty of care to him and shouldn’t have forced all that evil debt on him, poor lamb.
Exactly, earlier this year I bought a seven year old car and it will do me for another three years easily.
Is he an investor? Because if so, I doubt A New Beginning will take him as a poster case. They seem to be more interested in the heartstring tugging home losers…
It might be reduced but they still get relief on it. Why would he reduce the amount of relief he gets if he doesn’t have to?
I’m not saying buying a new car is a smart thing to do but assuming they do buy it then the smart thing to do is make use of their tracker if they can.
As for the smart thing being to pay down the capital as soon as possible, I disagree (though it is smarter than buying a new car).
If you had a BTL with a ECB +0.8% tracker and the rent covered mortgage payments (interest and capital) would you:
a - continue to use the rent to pay off the mortgage
b - go interest only and pay the excess rent into AIB or BOI saver accounts which will pay you 3.25% - 3.50% p.a. (i.e. borrow at 1.8% and lend it back to the bank at 3.50%). At the end of the IO period use the proceeds of your saver account to being your mortgage back up to date and pocket the profit you’ve made from being paid the higher interest rate. You’ll also be maximising your tax relief.