Mortgage Repayment Query

EimearMCD

Hi, I'm looking for some advise..

I have a 100% mortgage on a 5 year fixed rate. It was only taken out in April of 2007.

The thing is I am currently applying for the Gardai and if I'm successful I will be on Garda training for two years starting in May of 2008.

The pay during training is only €150 a week so I will be unable to contribute my half of the mortgage which is €675 (my half), as I will need this money for travel expenses food & drink etc

Would the mortgage lender let me push back the mortgage repayments for a certain amount of time- if so how long?

Would they let me pay the interest only for 2 years? as my partner will still be in full time employment we could afford to pay back approx €800 a month for the two years I'd be doing training.

I know getting a lodger is an option but we'd get a max of €350 - €400 a month and this would still leave us sort and would also mess up my partners life alot & dont want to put him through more stress etc.

Anybody able to help? Want some advise before I ring the mortgage lender and they laugh me off the phone!

thanks

BoatMad

Most mortgage lenders will listen to any reasonable proposals, try to arrange a face to face. Youd be suprised at how flexible they can be if you adopt a reasonable approach.

your situation sounds good , as they would see you having a good reliable income after the training.

I'd say go for it, arrange a meeting with the local branch manager and talk

uberwolf

the banks are very favourably disposed to civil servants - witness higher LTV mortgages being extended to them still.

There may be implications for your fixed rate with this proposal. If you are paying principal and interest at the mo, then that piece of principal that they'd presumed you'd be paying off will throw them.

Depending when you fixed, that is.

So they should be flexible.

dotsman

Most likely you will be hit by breakage charges. The whole idea of a fixed is that both parties (yourself and the bank) agree to a fixed payment with a fixed schedule, regardless of whether interest rates go up of down or circumstances change. (At the moment, I'd say you would get a much better rate on Variable/Tracker, and that is what the bank might think you are trying to do). Check your mortgage documentation. They are obliged to show you the formula for calculating the breakage fee, but after just 1 year into a 5-year fixed, I would expect it to be pretty high.

You mention that you are paying half the mortgage. Who pays the other half? Can they take on your responsibility while you are in training? What about parents etc?

That said, you should of course go and sit with them. Bring the other party to the mortgage (as it will of course affect them and require their agreement). There may be something that you can work out. Good Luck!

EimearMCD

Hi,
thanks for the advice, I jsut found out that in the second year of garda training you earn 26k so it would just be for 12 months that I couldn't make the repayments. I think the bst option for me is to get a credit union loan of 9k to pay for my half of the mortgage for the first year. my partner would be paying the other half.

The Rooster

Mortgage breakage fees apply if you pay off a loan early.

This is not the case in this situation. If they do agree to a change in repayment terms, they'll end up with more interest, therefore there should be no breakage fee.

I agree totally with other posters above, that a meeting is the best way to go. I'd be surprised if the bank were not flexible with you, so long as you can at all times pay at least the interest.