We are back with another great interview from Una McNeil on Phoenix FM as part of the LET’S TALK series. Mortgages are the focus of this episode. Find out what areas are covered below and if any apply to your current situation:
- Mortgage payment breaks
- Abhaile eligibility
Read on or listen back to the interview in full below
Can you explain what exactly is the mortgage COVID-19 payment break and who is eligible for it?
“As a result of COVID, the banks had to act and look at how they can help their customers. They have offered payment breaks. That means a freeze on your mortgage payments. All the banks are offering that. This includes lenders that people would often refer to as ‘vulture funds’. If your mortgage has been passed on to another company, they are also offering this.
Initially, the break was for three months. But that has now been extended for a further three months. You can get a break for a total of six months. You would be eligible for the payment break if your income has been impacted as a direct result of COVID-19. In addition to a reduction of income, mortgage payments must have been up to date, and there can be no existing arrears on the loan.
You can apply by calling the banks. Most of the banks also have a link on their websites where you can fill in a contact form. From a MABS perspective, we do like to see it as a last resort for people. I would be advising people to sit down with their budgets, look at the new income and work out can they still continue to afford to pay their mortgage. If they can, they absolutely should do that. If they can't, by all means, request the payment break.”
Those who may be considering the payment break or are currently availing of this payment break, it can free up some financial resources, but this money does have to be paid back in the future?
“Absolutely, it's not free. It's not like the banks are giving you a free period of not paying your mortgage. That money will have to be paid back at a different time. To give you an example of what some of the banks have been doing for some of the clients that I would be currently working with. They are recapitalizing the payments back into the term of the mortgage.
For example, your mortgage is €1000 a month, that will go back into the term of your mortgage and will be spread out over that time. After your three-month payment break is up, and you're able to return to your full mortgage repayments, they'll have slightly gone up because that three-month break has been put back into the mortgage. You do have to pay for it. It's important that people know that.”
People may have had some difficulties when it comes to mortgage arrears even before COVID. Are there any supports or services that MABS have to help people?
Yes, MABS is always there to help people who are in mortgage arrears or who are at risk of getting into mortgage arrears. The first place that I would advise people to start is our Helpline, and a referral can be made to meet with a Money Adviser.
MABS is the gateway to a scheme called Abhaile. It was set up three years ago to assist people in mortgage arrears. It usually deals with people in the later stages of arrears. The primary focus of the Abhaile scheme is to keep people in their home wherever possible. The scheme offers different options.
One of the options would be to meet with a MABS Dedicated Mortgage Advisers (DMA). They concentrate on the mortgage only. We have DMAs across all of our regions. Another element of the Abhaile scheme is whereby the DMA or MABS Adviser can make a referral for you to see a Personal Insolvency Practitioner (PIP) or an Accountant. We would help the person see one of these specialists through a voucher system. That of course, is free.
The PIPs are licensed under the Insolvency Service of Ireland (ISI). The ISI was set up to support people who are experiencing debt. The PIP will help them look at their mortgage. If the person is going to go down the route of an insolvency arrangement, it adds a level of protection to them. Once they're in that process, a protective certificate is issued. This will protect the homeowner from the case going any further down the legal route. The whole idea, as I said before, is to keep the person in their home and get an arrangement in place.
When we talk about the vouchers for the Personal Insolvency Practitioner, is there a time limit they must be used within?
Yes, they last for three months. From the day the voucher is issued, there is a three-month timeframe that they should make contact with a PIP. MABS will issue you with the list of PIPs involved with the scheme. They're licensed by the ISI. You can ring to make an appointment and you make the decision yourself as to what PIP you want to go and see.
When it comes to someone who wants to apply for the Abhaile scheme, or if they want to know whether they're eligible, how can they find out?
There's a couple of ways you can do that. You can read the eligibility criteria here. You can also contact the Helpline. They will assess over the phone. It may be a case that you're deemed eligible there and then for a voucher to see one of the professionals on the panel. The adviser will process that voucher for you.
Or alternatively, you can apply through your local MABS service by making an appointment to meet with a Money Adviser. The Money Adviser will assess your case and if you are deemed eligible, that option will be provided.
Do you have any further questions about what’s discussed in episode one? Maybe your own money or debt question? Let’s talk! Call us about it on 0761 07 2000 or use our live chat.
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