Digging yourself out of mortgage debt – where to start

There has been much media debate regarding the 100,000 plus people presently in mortgage arrears. The situation unfortunately is worsening and we are going to see this number increase significantly over the coming months unless guidance and action are taken.
The reality on the ground for people both working and unemployed is that they may have been experiencing huge difficulties over the past number of months just to meet their mortgage repayments.
This is unsustainable as they have done without essentials such as food, clothing and electricity to make ends meet. In addition, the effects on people’s mental health and relationships are hugely at risk and could result in serious social issues. With incomes down over 14% and increased taxes imposed in an effort to establish economic stability, the funds are not there to meet mortgage repayments for loans agreed in the boom years.
What are the options? Well the most important advice anyone could give to someone in difficulty or potentially facing difficulty repaying their mortgage is to keep the lines of communication open.
I would advise fully discussing the matter with your financial advisers or experts in the field who can either act on your behalf when dealing with lenders or can advise how best to manage the situation.
It is without doubt extremely difficult for someone in arrears or faced with the daunting prospect of not having the finance to pay their mortgage, to have the strength and confidence to make contact with their bank.
The process can be very intimidating and there can be huge stress already involved. There are numerous options available to people to reduce their monthly repayments such as interest only options, moratoriums or payment breaks, or extending the term of the mortgage.
What you are finding now is that banks are taking longer and longer to make decisions on even basic interest only applications. We have seen applications take over four months and this clearly is most frustrating. Applications for restructuring are being dealt with in the head offices of lending institutions, which are generally in Dublin.
Whom you speak with today regarding the case may be someone different tomorrow and you are passed from pillar to post in many instances resulting in even further delays in putting an agreement in place.
In the meantime, arrears accrue and stress levels increase and the whole process can turn people off dealing with the banks at all. Again, it is definitely most advisable that no matter what, keep communicating with the banks and documenting all correspondence. That also is why having a financial adviser deal with the issues on your behalf ensures all exchanges are on file if required further down the line.
There is no simple solution to mortgage arrears or difficulty. Most Irish people want to address their debts and come to some resolution. What is the best approach is to know your options, deal and address the issues and potential issues that have arisen and will arise and to seek the help and advice that is out there.

For further information
contact Carey Corbett
Financial Solutions, Ennis.