Combining original Mortgage & Top up

Dempo1

Not sure if I am in the right section but seeking advice on a Mortgage Dilemma.

I took out a small Mortgage in 2001 for €52k and two years later a top up bringing the total to €110k. This was a restoration project, family home and despite general negative equity in the over all market, i doubt i am in the situation. Currently my outstanding combined mortgage liability is €65k, Small as it is, here is my dilemma.

Recently made redundant (no big payout unfortunately) I have had to review all my outgoings. I have the bizarre situation whereby my original mortgage and top up are treated as two separate mortgages and one consequence is paying two mortgage protection insurances per month. Whilst not in a position to re mortgage i wondered is anyone in a similar position and what options are open to me given the inflexibility of Banks right now. I also have two separate mortgage payments per month. I have availed of an interest only period also.

My concern is when this expires. Ideally i would like to combine the two mortgages and agree one payment per month (hopefully lower) and at the very least only have one Insurance payment to cover same.

Any advice appreciated!

jor el

I think the only way you'll be able to combine the two is by a re-mortgage for the total amount. If you've had payment troubles, and are on an interest only period, this may not be possible. You'd have to ask the bank.

As for getting a lower rate, it may actually be higher than what you currently pay, depending on what your old mortgage interest rate models are.

phormium

Having both loans separate is not in the least bizarre, it is quite common and was usually done that way to save on legal costs or because original loan was on fixed rate for example.

It does not necessarily mean you are paying anything extra, for example two loans of 50k over 20 yrs on the same rate cost the same per month as one loan of 100k, where the savings by amalgamating loans come into play is when it causes one of the terms to be extended or a new lower rate to be used. Re-mortgaging in this way usually involves legal costs too. So just because the loans are separate is not necessarily a problem.

On the life cover side you could just take out a policy to cover the total amount and to cover the maximum term the loans run to, this may not necessarily save you money either but there is no reason why the bank would not allow this.

If the bank is willing to offer you reduced payments for a period then the fact that the loans are separate should make no difference as they can treat them the same.

unclebill98

Be wary of your interest rates as mentioned. You could find yourself being screwed with a worse rate.

I agree with others in realtion to the insurance. You should have just gotten the original cover up'd to cover both. It could be well worth your time looking at sorting this out.