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Tracker Mortgage/Negative Equity/Rightdown

  • 16-09-2019 2:02pm
    #1
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭


    Speaking to my neighbor last night. He sold up his apartment.

    I've been thinking about it for awhile but based on what he got its still in negative equity (LTV 107%).

    Given the relative small gap to break even is there a possibility of getting a right down based on the fact its on a tracker from 2007?

    Account has no arrears but given the cost of a tracker to the bank over its life time they might be willing to swallow it.

    Any thoughts?


Comments

  • #2
    Geuze
    Registered Users Posts: 13,029 ✭✭✭✭Geuze


    Writedowns have been discussed extensively on AAM.

    The answer is: not a hope.

    Tracker mortgage are profitable, even though many people say they aren't.


    Even a 0.75% / 1.00% tracker is delivering a margin, when the bank's liabilities are costing approx 0% - 0.25%.


  • #3
    Geuze
    Registered Users Posts: 13,029 ✭✭✭✭Geuze


    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???


  • #4
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Geuze wrote: »
    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???


    Height of the boom and a 100%+ mortgage - believe it :pac:


  • #5
    BrokenArrows
    Registered Users Posts: 7,500 ✭✭✭BrokenArrows


    Geuze wrote: »
    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???

    People who paid boom prices but still nothing too crazy have all recovered by now. But a few paid insane money for shoe boxes in horrible locations and they are stil screwed.


  • #6
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    Samuel T. Cogley wrote: »
    Height of the boom and a 100%+ mortgage - believe it :pac:

    I think there was an 8% deposit. Good location on commuter rail line (100m from station), large employment in the area and decent location.

    Just the purchase price


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  • #7
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,334 Mod ✭✭✭✭Gumbo


    Geuze wrote: »
    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???
    Samuel T. Cogley wrote: »
    Height of the boom and a 100%+ mortgage - believe it :pac:

    Not that hard.
    I know of houses bought for 425k in Dublin in 2006 on trackers with Bank of Scotland current value placed at about 280-300. Houses were obviously overpriced in the first place!

    Those with mortgages of less than 90% LTV so none of the 100% mortgage BS.


  • #8
    Darc19
    Registered Users Posts: 3,817 ✭✭✭Darc19


    kceire wrote: »
    Not that hard.
    I know of houses bought for 425k in Dublin in 2006 on trackers with Bank of Scotland current value placed at about 280-300. Houses were obviously overpriced in the first place!

    Those with mortgages of less than 90% LTV so none of the 100% mortgage BS.

    On a 30 year 400k mortgage there'd be about €280k balance, but some banks were giving 40 years, so those would still be in negative equity, but with the benefit of a tracker making the overall cost actually less than the overall cost if buying today at today's prices and mortgage rates.

    Basically, if you have a tracker of 1.2% or less, you will not have overpaid when you calculate the life cost of the mortgage v the life cost if taking it out now.


  • #9
    Dr_Kolossus
    Registered Users Posts: 112 ✭✭Dr_Kolossus


    We bought for 365k in 2007. 90% ltv. If sold now we would get 250k. I think we owe 255k or so. So slight neg equity still. 1 more year renting it out and hopefully can sell.

    Has been rented last 4.5 years, and have to put in 4k per year extra due to tax man. So will have put in 20k tax by time we sell too.

    Loads of people like us


  • #10
    Uriel.
    Registered Users Posts: 8,061 ✭✭✭Uriel.


    Dr_Kolossus wrote: »
    We bought for 365k in 2007. 90% ltv. If sold now we would get 250k. I think we owe 255k or so. So slight neg equity still. 1 more year renting it out and hopefully can sell.

    Has been rented last 4.5 years, and have to put in 4k per year extra due to tax man. So will have put in 20k tax by time we sell too.

    Loads of people like us

    Same here although I'm probably slightly the other side of the negative equity line. Though it's hard to tell as for the location (rural town) it's hard to get a definite sense of the market price.

    It's been rented for past 4 years also and tbh if/until the tenants act up its better to leave it rented for me. That may change if the rules/laws/burdens change further for landlords. Its a tracker mortgage so low interest, and the house is about 70k less in value than I paid for it (excluding 25k refurb costs), so it suits me at the moment with decent tenants to keep it ticking over, with some (hopefully) eat in to the lost value. Hard to predict though. At least, at the moment apparently being just out of negative equity, I can just about exit the rental market when I want to which is reassuring.


  • #11
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    Geuze wrote: »
    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???

    c250k oustanding, apartment value c 190k. Believe it.
    in the height of the recession some apartments were selling for c50/60k. they seem to have topped out at c190/200k.

    Have to wait for a while before I can sell it, I don't want it anymore as I don't live in it, its a cost I don't need anymore.


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  • #12
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    TheShow wrote: »
    c250k oustanding, apartment value c 190k. Believe it.
    in the height of the recession some apartments were selling for c50/60k. they seem to have topped out at c190/200k.

    Have to wait for a while before I can sell it, I don't want it anymore as I don't live in it, its a cost I don't need anymore.

    I’d sell tomorrow if I could clear the mortgage. A lot of ‘accidental’ landlords would do the same i’m Sure.


  • #13
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    godtabh wrote: »
    I’d sell tomorrow if I could clear the mortgage. A lot of ‘accidental’ landlords would do the same i’m Sure.

    I'd get rid of it in a heartbeat if I could. Costing me in tax even though the rent barely covers the mortgage. nothing but a pain in the butt.


  • #14
    Sunrise_Sunset
    Registered Users Posts: 1,211 ✭✭✭Sunrise_Sunset


    Geuze wrote: »
    It's hard to believe people are still in negative equity on a tracker mortgage from 2007???

    We sold this year, and were still in negative equity from a mortgage that started in 2006. Believe it!


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