Residential Investment Property

Given the current economic environment, it is an unfortunate fact of life that there are many property owners in difficulty with their mortgage. In many cases, the owner has missed only one or two mortgage payments and has now received a letter from the Bank in relation to the arrears. If you are in difficulty, contact the Bank immediately.

The primary responsibility lies with the Borrower(s) to advise the Bank of any problems with repayments. Failure to do so could give rise to more serious arrears problem with negative consequences for both parties: for the Bank, many factors including greater difficulty in normalising the repayment situation; for the borrower accumulating arrears that will affect his/her credit rating and give rise to the risk of losing his/her property. If the borrower’s cumulative arrears exceed three months repayments, the Bank may issue a Solicitors letter. In most cases, the last thing a Lender wants to do is to repossess your property.

What are your Options?

Do you have Payment Protection Insurance?

Your mortgage may be covered by payment protection. If so, claim as early as possible to avoid missing any time limits stated in the policy.

Are you maximising your income?

Check that you are getting all your social welfare and tax entitlements. Your local Citizens Information Centre will be able to help you (your local telephone directory contains details of the Centre nearest to you). There may be other ways of maximising income, letting a room for example, with your lender’s permission. Check to see if you are entitled to any benefits that you are not already receiving e.g. you may not be receiving Tax Relief on your mortgage or you may not be receiving the appropriate amount. You can contact the revenue commissioners to discuss your Tax Relief payments on lo-call 1890 46 36 26 or alternatively you can apply for Tax Relief online at www.revenue.ie.

Increasing your mortgage term

If your mortgage has for example 12 years left to run, the Bank may be willing (depending on your age) to extend this. Although your monthly repayments will decrease, in the long run you will pay more in interest than you otherwise would have done. Additional Life cover may also be required.

Payment Break

If your difficulties are only likely to be short term, the Bank may be prepared to give you breathing space to allow for circumstances to improve. Please contact us to discuss your options.

Interest Only Payments

Again, if your problems are hopefully short term, the Bank may be willing to accept just the interest part of the payment for a period.

Switching Loans

It may be possible to change from an endowment to an annuity mortgage. If you give up your endowment policy, you may get a lump sum that you could use to reduce arrears. However bear in mind that your mortgage payments will go up. Please note there may be costs involved.

Selling your home or Trading down

The difference between the value of your house and the amount that you owe the Bank is called the equity in your property. If your arrears are increasing and you are unable to meet the basic mortgage payment, the equity will go down all the time. You may end up with very little to spare or even negative equity if you still owe the Bank money even after your house is sold. If there is little hope of finding a solution to your current mortgage difficulties you may need to consider selling your house or trading down.

Alternative Refinancing through another lender

It may be possible to refinance your mortgage with another financial institution.

In listing the above options the Bank is not agreeing to provide all or any of the options. Each case is individually assessed. Equally the appropriateness of these measures must be determined by the factors of each individual arrears case.

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The borrower is advised to take appropriate independent advice. What steps should I take?

Talk to the Bank

Make contact with the Bank as soon as possible to discuss any Mortgage related concerns or problems you may be experiencing. Call us on +353 (0)1 6096182

Remember to Budget and be realistic

Don’t make promises you can’t keep! For example, if you contact the Bank and you agree to pay €100 per week off the arrears, make sure you can actually afford to pay that sum. If you can’t afford it and then miss a couple of these agreed payments, it affects your credibility with the Bank. A Mortgage budget form is available from the Bank on request and will aid in coming to an affordable and realistic agreement.

Look at all your options

If you cannot foresee a real prospect of being able to maintain repayments and clear the arrears and get back to a healthy financial situation, you should consider selling the property. Also sit down and look at your income and expenditure. Is there any expenditure that you can cut or reduce? If you have mortgage arrears, it is important to resolve the problem now.

The first step is to consider how you are going to clear the arrears in addition to maintaining your normal monthly repayments to the Bank. Draw up an income and expenditure form and budget that cover all of your monthly outgoings. (Although it is important to put down realistic figures, the Bank will expect you to repay the arrears within an agreed timeframe). Finally, keep in contact with the Bank. Don't ignore the calls or letters. Deal with matters promptly and only make a proposal for repayment that you can afford and adhere to.

The borrower is advised to take appropriate independent advice in entering any binding agreement with the Bank. Debt Counselling Services

Please see below for details of debt counselling services and other services that maybe helpful in an arrears situation.

Money Advice and Budgeting Services Ph: 1890-283438

Legal Aid Board Ph: (01) 6441900

Citizens Information Board Ph: (01) 6059000

Repayment arrangements

Once contact has been made regarding an arrears situation, the Bank will endeavour to make a repayment arrangement with you. You should state in writing the reason for the arrears and you will be asked to complete a Standard Financial Statement which the Bank will send out to you.  

Once completed the Bank will then reassess the mortgage based on your present financial circumstances and loan to value and may require verification of information provided. Where possible, the Bank will propose a repayment arrangement. This arrangement will be issued in writing and must be accepted by you in writing. It is imperative that this agreement is maintained. If you default on repayments, the Bank will proceed to litigation i.e. proceed for possession of the property.

Once one mortgage repayment has been missed, the Irish Credit Bureau will automatically be notified. Any arrears on your mortgage may affect your credit rating.

Telephone Communication

The Bank will always be readily available to deal with customer queries in relation to your mortgage. You can contact the Arrears Support Unit on +353 (0)1 6096182. Any repayment arrangements made by telephone or verbally in a meeting must be put in writing by the Borrower/s.

Written Communication

Once a monthly repayment has been missed, the Bank will issue a written communication to the Borrower/s requesting payment. This process will be repeated after the 2nd missed repayment. After the 3rd month of missed repayments, the Bank will issue communication stating that the Bank will be referring the case to its solicitors. An estimate of costs to the Borrower/s in relation to this will be provided and is purely indicative.