3 Ways to Protect Your Home in Mortgage Arrears

For many people struggling with mortgage arrears a constant question is whether the problem can be solved and whether that solution will mean their home can be protected.

Over the last while there have been several innovations introduced which, in most cases, mean that homes can be protected.

These include:

  • Bank offered solutions
  • Personal Insolvency
  • Mortgage to Rent

Bank offered solutions

Despite much misguided commentary neither banks nor funds want to repossess homes.

However, where a borrower does not co-operate or engage with the lender there may be no other option available to the lender,

So, the first step is all about co-operation.

Co-operation means:

  1. Communicating with the lender
  2. Providing the lender with a Standard Financial Statement and supporting documentation
  3. Paying what you reasonably can in a timely and regular manner

Once you are co-operating you are protected and the lender is required to offer a solution – if a solution exists.

Solutions include:

  • Capitalisation of arrears
  • Extension of the term
  • Split Mortgage

 

Personal Insolvency

Under this statutory scheme, a borrower can be offered a deal once they can at least afford a mortgage based on the current market value of the property, extended over the longest period possible, and based on the lowest reasonable interest rate.

Furthermore, all other debts can be dealt with under this system.

The real strength of the system is that even if the bank or fund refuses the offer, a Court can intervene and impose the deal on the lender.

To recap:

If you can afford a mortgage based:

  • On the current market value of the property,
  • Extended over the longest period possible, and
  • At the lowest reasonable interest rate

your home can be saved.

 

Mortgage to Rent

The Mortgage to Rent scheme is available for those whose mortgage is unsustainable and who qualify for social housing.

Under Mortgage to Rent a borrower surrenders their home to the lender who then sells the property to an Approved Housing Body or other provider. The former owner then becomes a tenant in the property on a 20 or 30-year term paying an affordable or means tested rent.

The borrower may re-purchase the property in the future if their circumstances change.

 

At New Beginning, we provide all these services, together with ancillary legal and financial advice services.

For more information go to www.newbeginning.ie or call 01-5240000