Down-sizing move with part of existing mortgage - is it possible?

Trebor_Irl

Hi all!
I have an 'old' mortgage of €300k on a property with a current value of approx €380k.
After being made unemployed in 2010, I retrained myself and am now self employed. Things are going 'ok' but my current mortgage repayments are killing me: I am not in arrears but could be soon and so would like to take some action before that happens. I'm currently paying €1500pm and would be in a better financial position if it was half that.

I went interest only for 1 year which was a really humiliating experience. I had to battle with my bank to get an interest only agreement so that I could have a bit of financial leeway as I set myself up in business. At the end of the 'interest only' year my repayments however jumped so high that I then ended up having to extend the mortgage by 5 years [an even more humiliating experience] to bring the payments down to something close to manageable. I don't ever want to have to deal with my bank should I get into arrears and want to take some action now that should help prevent that from ever happening.

Ideally I'd like to downsize. I can find properties in my area that are suitable to my needs for €230k or below. What I would like to do is sell my current home, pay off half my existing mortgage and use the other half and the equity to buy a smaller place. To make the switch I'd need to keep part (€150k) of my existing mortgage as being only recently self employed I wouldn't get a new mortgage.

Do any of the banks offer such a facility: is it something that can be done?
Any guidance would be appreciated.
Thanks in advance

Cuddlesworth

I know this sounds odd but you would probably be in a better position if you were not paying your mortgage to get the bank to agree to anything.

Trish56

Unfortunately OP your mortgage is registered on your existing property and if you sell it you must redeem the mortgage and apply for a new mortgage for the new property. To qualify for a new mortgage you will need to have at least 2 years accounts.

Trebor_Irl

Cuddlesworth wrote: »

I know this sounds odd but you would probably be in a better position if you were not paying your mortgage to get the bank to agree to anything.

I am hoping to avoid that scenario but it may be the way I may have to go. Given the humiliation I experienced in dealing with my bank (and I wasn't in arrears) I really feel for those who are genuinely struggling. It seems like the bank actually want you to be in trouble before you bother them: if that's the route they want me to go then so be it.

Trebor_Irl

Trish56 wrote: »

Unfortunately OP your mortgage is registered on your existing property and if you sell it you must redeem the mortgage and apply for a new mortgage for the new property. To qualify for a new mortgage you will need to have at least 2 years accounts.

Thanks Trish. I thought I had heard the a bank/some banks were beginning to offer a switch so that the mortgage (or part of it) is tied to the person and no longer the property...or maybe it was just wishful thinking on my part.

chris85

Trebor_Irl wrote: »

Thanks Trish. I thought I had heard the a bank/some banks were beginning to offer a switch so that the mortgage (or part of it) is tied to the person and no longer the property...or maybe it was just wishful thinking on my part.

UB and BOI offer mover mortgage for poeple in negative equity.

http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/moving-home/products/home_movers.ashx#tabbed-nav=tab1

Trebor_Irl

Thanks Chris. Fortunately (or possibly unfortunately) I am not in negative equity but who knows, if I fall into arrears knowing that that kind of offer is available could give me some leverage. I guess I am trying to avoid getting into financial trouble in a system that doesn't want to deal with me until I am actually in trouble.

chris85

Trebor_Irl wrote: »

Thanks Chris. Fortunately (or possibly unfortunately) I am not in negative equity but who knows, if I fall into arrears knowing that that kind of offer is available could give me some leverage. I guess I am trying to avoid getting into financial trouble in a system that doesn't want to deal with me until I am actually in trouble.

Sorry dont know why I thought negative equity when clearly you are not. May still be an option. Perhaps a chat with your bank to see if they can help with this, even though they havent been too helpful to date.

Magicmatilda

Have you the option of renting a room in the property to assist with the mortgage or could you rent the property as a whole and then rent a chaeper place yourself?

Another option is to rent a room temporaily through airbnb at weekends or something.

I know that doesn;t answer the question but might assist with revenue issues.