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ICB Query

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  • 17-05-2010 4:15pm
    #1
    pokermonkey
    Registered Users Posts: 239 ✭✭


    Hi,
    Hopefully I'm in the right place.
    Can't find the answer to this question on the interweb, and when i ring the ICB, i can't get through to a staff member to get the answer.
    Anyway.... the question is this.

    If i cancel the DD on my mortgage, and put in place a standing order for the interest only (as opposed to principal and interest) how does this affect the ICB rating?

    Basically, i've recently been made redundant, and asked my bank for an extension of the interest only period (which was declined), and I'm now wondering how the above action would affect my credit rating.

    thanks in advance.
    N


Comments

  • Options
    #2
    dotsman
    Registered Users Posts: 3,635 ✭✭✭dotsman


    It would most definitely show up as your account going into arrears.

    If you are paying off the interest only, then the capital remains as is. However, the limit on the account is continuing to decrease, thus the gap between the limit and the capital remaining is in arrears.

    I was going to say that you could try your bank again to allow the interest-only repayments, but I've just noticed the word "extension" in your post. Does this mean that you already had an interest-only period?

    P.S. You might be better sending a PM to a mod to get this moved to banking where you might find more advice.


  • Options
    #3
    pokermonkey
    Registered Users Posts: 239 ✭✭pokermonkey


    Yeah,
    We took the mortgage out 2 years ago. 1st year was interest only with the option to extend for a further year. We did that, now the 2nd year is over, we're expected to go to P&I now. Simply cant afford it.
    i'll pm a mod.
    cheers
    n


  • Options
    #4
    dudara
    Registered Users Posts: 33,519 ✭✭✭✭dudara


    Moved to Banking & Insurance & Pensions

    OP - you cannot change the terms of your mortgage repayments on your own initiative. If your bank has refused your request, then get in touch with MABS and seek more professional help.

    dudara


  • Options
    #5
    Pythia
    Registered Users Posts: 7,469 ✭✭✭Pythia


    Yes, it is going to affect your ICB. You need to talk to the bank and explain your situation again. Be totally honest about what you can pay. Doing something without telling them will not go down well.


  • Options
    #6
    pokermonkey
    Registered Users Posts: 239 ✭✭pokermonkey


    hmmm, well i did try that route. We gave them extensive detail on our finances, and proved that we were unable to fund the principal portion of the mortgage.

    We'll be writing another letter asking them to re-consider. I find the whole thing baffling to be honest. The Bank are effectively forcing us to default on the loan, when we are happy to fund interest and a lower level of capital.

    Thanks for the info. I'll contact Mabs for further help.
    Many thanks
    N


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  • Options
    #7
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    pokermonkey wrote: »
    hmmm, well i did try that route. We gave them extensive detail on our finances, and proved that we were unable to fund the principal portion of the mortgage.

    We'll be writing another letter asking them to re-consider. I find the whole thing baffling to be honest. The Bank are effectively forcing us to default on the loan, when we are happy to fund interest and a lower level of capital.

    Thanks for the info. I'll contact Mabs for further help.
    Many thanks
    N

    you are only a few years into the mortgage so the interest only is probably about 90%-95% of your monthly payment anyways. Have the bank advised how much the interest is on it each month?


  • Options
    #8
    pokermonkey
    Registered Users Posts: 239 ✭✭pokermonkey


    chris85 wrote: »
    you are only a few years into the mortgage so the interest only is probably about 90%-95% of your monthly payment anyways. Have the bank advised how much the interest is on it each month?

    current interest is approx 1090 pm. the P&I payment will be approx 2300 pm.
    Note that these figures are net of mortgage relief etc.


  • Options
    #9
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    pokermonkey wrote: »
    current interest is approx 1090 pm. the P&I payment will be approx 2300 pm.
    Note that these figures are net of mortgage relief etc.

    fair enough, seems very low since you only have the mortgage a few years even with the mortgage relief taken into account.


  • Options
    #10
    dotsman
    Registered Users Posts: 3,635 ✭✭✭dotsman


    chris85 wrote: »
    fair enough, seems very low since you only have the mortgage a few years even with the mortgage relief taken into account.

    Not really. Sounds about right to me. For example, 400K @ 3.5% would give you those figures approx.

    pokermonkey, I think MABS should be your next port of call. Do you have any savings from when you where previously on interest only? Do you have any other debts?

    What is working against you here is the fact that interest-only is only ever supposed to be a short-term solution. The regulator (and everybody else such as investors/media) are putting a lot of pressure on the banks to get people off interest-only, as this is the only way to truly see what loans are performing. They have been heavily criticised in the past by the media for "hiding" possibly poor-performing loans under interest-only options. Yet, the very same media will then hang them for not doing enough for customers in trouble!


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