4 steps in addressing your mortgage difficulties

If you are having difficulties meeting your mortgage repayments or think you will in the near future, please contact our Customer Support Team on 0818 93 06 50.

If you have already fallen into arrears, please contact our Arrears Support Unit on 0818 93 02 35.

These teams are here to help you and will work with you to endeavour to find solution to assist you in meeting your monthly mortgage payments.

In order to achieve this, it will be necessary for us to keep in touch with you. We would ask that you ensure the lines of communication are kept open by providing us with current contact details, promptly returning our phone calls and responding to our correspondence in a timely manner

When you contact us, we will ask you to complete a Standard Financial Statement and give details of your current circumstances. We will also ask for supporting documents, which may include bank statements, business accounts, payslips and your EDS.

You may wish to seek independent advice to assist you with completing the Standard Financial Statement, e.g., from MABS or an appropriate alternative.

We will use the information you provide us to assess your individual situation. In doing so, we will give careful consideration:

• Your personal circumstances
• Your overall personal debt
• The information provided in the Standard Financial Statement
• Your current ability to make repayments
• Your previous payment history
• Any other relevant information

In certain situations, a short term arrangement may be appropriate to allow you sufficient time to either adjust your household expenditure or address your unsecured debt, and enable you to return to full repayments. In other circumstances it may be more appropriate to consider a long term arrangement. In some cases, it might be more appropriate to examine alternative arrangements. Further information on all potential repayment arrangements is detailed below.

Short term repayment arrangements

1. Interest Only

In this arrangement, you only pay the interest on your mortgage for a period of up to 12 months. This temporarily reduces your overall mortgage repayments as you are not required to make any payments towards the capital part of your mortgage for the period of the arrangement.

2. Interest and Part Capital

In this arrangement, you only pay the interest and part of your capital repayments for up to 12 months. This temporarily reduces your overall mortgage repayments as you are only required to make interest and part of your usual capital repayment of your mortgage for the period of the arrangement.

3. Temporary, Partial or Full Moratorium

In this arrangement, you defer paying all or part of your mortgage repayments for a specified period of time.

NOTE: During the period of the short term repayment arrangement it is critical that you take the necessary steps to prioritise your mortgage repayments above all other debt to ensure that you are in a position to return to full capital and interest repayments on your mortgage. This may also include an adjustment on your monthly household expenditure.

When any of the short term repayment arrangements numbered 1-3 expire, KBCI will re-calculate your repayments based on the outstanding capital balance and the unexpired term. If the term of the mortgage is not extended at this time, your mortgage repayments will be higher over the remaining term as the capital balance outstanding reduces at a slower pace then was originally agreed for your mortgage. The slower pace of capital paydown will increase the cost of credit over the remaining life of your mortgage.

Long term repayment arrangements

1. Term Extension

In this arrangement, the term on your mortgage account is extended for a longer period of time. This reduces the amount of your monthly repayments by spreading the repayments over a longer period of time.

2. Long term Interest Only

In this arrangement you pay the interest on your mortgage for an agreed period longer than 12 months. This temporarily reduces your overall mortgage repayments as you are not required to make any payments towards the capital part of your mortgage for the period of the arrangement.

3. Long term Interest and Part Capital

In this arrangement you pay Interest Only or Interest and Part Capital for an agreed period greater than 12 months. This temporarily reduces your overall mortgage repayments as you are only required to make interest and part of your usual capital repayments of your mortgage for the period of the arrangement.

4. Interest Rate Reduction

In this arrangement, the repayments on your mortgage are set at an affordable level. The interest rate is reduced for a period of up to 5 years. This accelerates the amount of capital you repay over the period of the arrangement, meaning you will reduce the mortgage balance more quickly. At the end of the arrangement, the interest rate returns to the prevailing variable rate as per your original mortgage terms. Full capital and interest repayments then resume. The benefit for you is that you have reduced your loan balance to a level where future capital and interest repayments are affordable.

5. Capitalising Arrears

This is where the outstanding arrears are added to the remaining capital balance of your mortgage and repaid over the remaining term. This means that you will no longer be in arrears and your repayments will increase if your mortgage end date remains unchanged.

6. Split Mortgage

In this arrangement your mortgage is 'split’ into two portions based on your current financial affordability levels. The first portion will be repaid via capital and interest repayments over the term of the mortgage (“main mortgage portion”). The capital balance of the second portion of the mortgage is deferred until maturity of the mortgage (“the deferred portion”). The arrangement will be reviewed at regular intervals and where your affordability levels improve, an affordable element of the deferred portion will be transferred back to the main mortgage portion. You will not be required to make a capital payment on the deferred portion unless your financial situation improves, bearing in mind that the ultimate goal is to help you to repay the mortgage in full and in line with your affordability.

Note: When any of the long term repayment arrangements numbered 2-4 expire, KBCI will re-calculate your repayments based on the outstanding capital balance and the unexpired term. If the term of the mortgage is not extended at this time, your mortgage repayments will be higher over the remaining term as the capital balance outstanding reduces at a slower pace then was originally agreed for your mortgage. The slower pace of capital paydown will increase the cost of credit over the remaining life of your mortgage.

These short and long term arrangements will not be appropriate in some circumstances. Where this is the case, we will write to you to outline the reasons why we have declined an arrangement. The most common reason why an arrangement is not appropriate is usually due to affordability.

Alternative Arrangements

In certain circumstances it may not be possible to offer you a short or long term repayment arrangement. In such circumstances there are a number of alternative arrangements, which may require you to sell your property. These include:

1. Negative Equity Trade Down

In this arrangement, you trade down to a lower value property. The funds from the sale of your existing property are then used to pay off your arrears and reduce the remaining mortgage balance. Your new mortgage will be for the cost of your new property and any shortfall from the sale of your existing

property. The benefit for you is that the mortgage for your new property is at a reduced level that matches your affordability.

2. Mortgage to Rent

In this arrangement, you transfer the ownership of your home to a housing authority to which you then become a tenant. You no longer own the property and will pay rent to the housing authority. The benefit for you is that you will remain in your home. There are certain qualifying criteria for this scheme (e.g. maximum income, maximum property value). This scheme may also involve an outstanding amount for which you will remain liable. The Citizens Information Board operates a Mortgage Arrears Information Helpline for potential applicants to the scheme (See 'Useful Contacts’).

3. Voluntary Surrender

This is where you move out of the property and permit KBCI to sell or rent the property. When the property is sold, the proceeds from the sale are used to pay off your arrears and reduce the remaining mortgage balance. If the property is sold for less than the balance outstanding on your mortgage you remain liable for any outstanding mortgage balance, which will be repaid by you over an agreed period.

4. Voluntary or Assisted Sale

This is where we permit you to sell the property yourself and repay your mortgage loan with the proceeds of the sale. If the property is sold for less than the balance outstanding on your mortgage, you will remain liable for any outstanding mortgage balance which will be repaid by you over an agreed period.