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17 Jul 2009 00:00 by Montserrat Star rating. 3 posts Send private message

HELP - I have found myself in a difficult situation without going into all the sordid details my husband disappeared after taking most of the money out of our bank acct which was backup to cover the mortgage on our property.  I have a holiday let business which brings in some income and full-time job.  However I will not be bringing in enough to cover my 930 euros mortgage payment plus all the living expenses.

I was very pleased that my bank would help me out by giving me a personal loan - which would help me out for a year however I have been informed that they will keep this money in a separate acct to cover the mortgage payment.   Now  I have been thinking if this is a personal loan why do I not have control over this money and can they do this?  There is enough equity in the property as collateral

I fully intend to keep up the mortgage payments - as I do not want to simply hand back the keys to the bank and with it the equity  It just does not seem right that they should dictate those types of terms.  I quite sure that it would not happen in any other country - or correct me if I am wrong!

If anyone could shed some light on this please let me know.  

Regards

PS The property is up for sale!

 

 

 

 

 


 



This message was last edited by Montserrat on 17/07/2009.



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17 Jul 2009 09:08 by mariadecastro Star rating in Algeciras (Cadiz). 8586 posts Send private message

mariadecastro´s avatar

Dear Montserrat:

As that contract for personal loan is a private agreement between you and the bank, I am afraid to say that they can set their own conditions and you need to agree and if not, if you need further financiation, not just for the mortgage payments, maybe just look into different lenders.

Hope this helps!

Maria



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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17 Jul 2009 13:03 by Rose FP Star rating in Costa Almeria. 20 posts Send private message

This is not an unusual ploy by your bank; I have heard of such before. The bank's primary concern will be ongoing mortgage payments and, as they are probably loaded up with repossessed properties, they will do all that they can to remove the potential threat of another. The equity in the property is largely an irrelevance; they do not want to take any risks now.

The likely solution, as intimated by Maria, is a Remortgage to another bank to repay both the existing mortgage and loan. If you do intend to sell soon then look for an 'Interest Only' product to keep the obligations to the new lender at an absolute minimum.

However, it seems that your existing arrangement (with a payment of €900 per month) may be set up on a Repayment basis (Capital and Interest); have you not asked the lender if they will consider an 'Interest Only' period for you for a year or so to give you that window of time to ese the pressure and allow the sale? Many if not most banks will offer such now, but only if you ask for it!



_______________________
Mark Mountney Rose Financial Planning



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