Mortage Advice

goalie2

Took out a mortage with KBC (iib) 11 years ago. We where told we had three years of interest only and used the first year while building the house and renting.

We are now going through a separation, I have moved out and KBC will only give us 3 months of interest only. Also had to fill in a Standard Financial statement and send back which I have.

Are KBC not legally obliged to allow us to go interest only for the next year till we both get back on our feet?

Thanks

Peregrinus

Depends on exactly what was said to you, and on what it says in the mortgage document.

Peregrinus

[Wrong thread.]

goalie2

not sure on the second reply if intended for me.

If I do get the interest only for the next two years how many years will it add onto my mortage? is it worth it?

Pat Mustard

goalie2 wrote: »

not sure on the second reply if intended for me.

If I do get the interest only for the next two years how many years will it add onto my mortage? is it worth it?

You need proper advice in relation to your mortgage/debt problem. You should ask your financial or legal advisor to recommend somebody like New Beginnings or the Irish Mortgage Holders' Association.

You should look into this as soon as you can.

Peregrinus

goalie2 wrote: »

not sure on the second reply if intended for me.

Sorry. I posted it to the wrong thread. I have deleted the content to avoid further confusion.

goalie2 wrote: »

If I do get the interest only for the next two years how many years will it add onto my mortage? is it worth it?

If you pay interest only for two years, and you pay the full interests for that time, then your final repayment date will be deferred for two years. The overall cost of the mortgage will of course rise; over the full term you will pay an extra two year's interest (calculated on the sum outstanding at the time you take the two-year principal holiday).

Only you can decide whether it's in your interests. The advantage of switching to interest-only for a time is that, during that time, your monthly repayments are reduced, which may help your cashflow. The later it is in the term of the mortgage, the more they are reduced, so in order to make a decision about this, you need to find out (a) exactly how much your repayments would be reduced each month if you took a holiday now, and (b) whether that would help you with a period of temporary cashflow stress.

If the issue with separation is that your income will be permanently reduced, or your expenses permanently increased, or both, then a holiday may not be a good idea. When the holiday ends you're not necessrily in a better position to meet the increased repayments, and you have increased your overall costs.

goalie2

Thank you for sound advice Peregenius.