Home economics: Sinead Ryan answers your property questions

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Myself and my husband have been living and working in Dubai for the past four years and we are considering investing in property in Ireland, which we may use as our primary residence when we return in a couple of years. We think it’s preferable to do this now rather than have to start the mortgage application process while renting on our return, and begin to move our money back home. What options do we have?

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Sheahan Financial Dublin Galway Cork

We have €163,000 outstanding on a fixed- rate mortgage on our home which we estimate to be worth €380,000. There are two years left on the loan at an interest rate of 4.1pc and the bank is charging us an early redemption fee of €6,000 to get out of the mortgage. The entire term has 18 years left. Would we be better off paying the fee and switching to a much lower fixed rate or sticking it out by which time interest rates will have risen?

A. Your loan to value (LTV) ratio is 43pc, which makes your mortgage an attractive candidate for switching since banks reserve their best rates for LTVs under 60pc. You can definitely do better than your current rate, either with a standard variable or on a new fixed-rate contract.

For example, AIB’s variable is 2.75pc, resulting in repayments of €957.59pm, which is over €100 less than you are paying now. On the fixed side, KBC’s two-year fixed rate of 2.8pc would cost you €961.56 while Bank of Ireland is at 3pc on €977.55.

Obviously you have to take the €6,000 charge into account. Switching now would only save around €1,300 in the first year, and €2,600 over two years and you’d have legal/switching costs also. While you are correct in saying interest rates will be increased by the time your contract comes up for renewal, it’s unlikely to be at a rate which would mitigate against you staying put.

It’s annoying, but my advice would be to stay put until the end of the fixed term and review the entire mortgage at that stage based on prevailing fixed and variable rates.

You could, in the meantime, approach your own bank with the above quotes (you can find them on ccpc.ie) and threaten to switch at the end of the term, unless it agrees to move you to a better rate. It might concentrate the mind.

Q. My husband and I are applying for our first mortgage. We both work hard and have been saving so much over the years, so we are now in a position to approach banks. My husband had been putting this off for some reason but I suspected he was just too busy with work, so I gathered all the paperwork and set everything in motion. To my utter shock the bank has refused the application on the basis that they discovered a loan my husband took out which I wasn’t aware of – it turns out was to pay off a gambling debt which I also wasn’t aware of. What can we do to regroup? He has completely given up gambling, removed his account and this loan is being paid off soon.

A. Joey Sheahan, of Sheahan Financial Planning says ‘financial infidelity’ is unfortunately quite common.

“It’s contentious, and the perils of gambling have been well documented, however, the impact on people’s finances to do with online shopping, hidden bank accounts and apps cannot be over-estimated.

“Being honest and open about your finances when you’re in a relationship is very important, particularly if you are married are entering into a huge financial commitment like taking out a mortgage.

Source: https://www.independent.ie/life/home-garden/home-economics-sinead-ryan-answers-your-property-questions-36894432.html

If you are interested in getting a Mortgage Protection and would like to speak to us at Sheahan Financial  please don’t hesitate to contact us at welcome@mywealthmanagement.ie in Cork +353 21 4277037 or 353 86 8060601

MyWealthManagement Limited trading as Sheahan Financial is
regulated by the Central Bank of Ireland.


By Conall O Fatharta

 

As many as 2,000 mortgage holders may switch lender in the first six months of the year as brokers experience a surge in consumers looking to avail of cheaper rates.

It has predicted that switching will experience double-digit growth in the first six months of the year, as an increasing number of mortgage holders learn of the option which could potentially save them anywhere in the region of €311 per month and €112,000 over the lifetime of an average €350,000 mortgage.

A total of 1,319 people switched or re-mortgaged in the first half of 2017. However, the broker has forecast this number will grow to at least 1,500 — but possibly to 2,000 — during the first six months of 2018.

Figures from the Banking and Payments Federation of Ireland for the third quarter of 2017 show that just 777 borrowers switched or remortgaged during the period, although the numbers switching are up 15% on the year.

It outlined a sample case where a couple lowered their monthly repayments by €300 and saved interest of €99,000 over the remaining term of their mortgage.

Head of Credit at MyMortgages.ie Joey Sheahan said there were a number of factors that have led to the surge in inquiries they have experienced in the first few weeks of 2018.

“We put this down to a number of factors. As a result of recent media reports, anecdotal evidence suggests that an increasing number of mortgage holders seem to now be aware of the fact that switching lenders to avail of a better rate might be a viable option for them.

“Towards the end of last year myself and others in the industry endeavoured to highlight the fact that more mortgage holders can and should switch lender to reduce their monthly payments.

“It was also revealed that changes in the way lenders operate have meant that many only charge a very small, if any, break out fee from fixed rate mortgages, so what was once a significant monetary hurdle to switching is now obsolete in many cases,” he said.

Mr Sheahan said recent proposals put forward by Fianna Fáil to ban bank incentives to switch will lead to an even greater level of activity as people try to “get in” before any such legislation is introduced.

“Currently the mainstream lenders are offering sizeable cash incentives to certain cohorts of the mortgage market to encourage them to move lenders.

“The merits of this are up for debate but Fianna Fáil are putting forward a proposal to ban these cashback offers.

“If accepted, the Bill could come into force by the summer, so we are going to see large swathes of people who might have, up until now, been on the “switching fence”, make moves to avail of these offers before they are taken off the table,” he said.

Meanwhile, Finance Minister Paschal Donohoe has launched the second phase of the Switch Your Bank campaign.

The campaign directs people to www.switchyourbank.ie, and encourages consumers to shop around for financial products and services.

Source: https://www.irishexaminer.com/ireland/surge-in-mortgage-holders-switching-466129.html

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


 

MyMortgages.ie Dublin Cork

 

Households are finally cottoning on – switching your mortgage can save you €100,000. Brokers MyMortgages.ie report a three-fold increase in switching and forecast double digits growth in the first half of 2018. One reason behind the rush is borrowers want to avail of cash incentives for switching in case they are banned, as Fianna Fail proposes. The brokerage firm cities one couple who had a €390,00  (LTV <80%) mortgage over 28 years at a variable rate of 4%. They switched to a four-year fixed rate of 2.6% and  lowered their repayments by €300 – saving themselves €99,000. You can save €311 per month and €112K over an average €350K mortgage, said Joey Sheahan, of MyMortgages.ie

 

Source: Mail On Sunday  21/01/2018

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


Mortgages gold rush on the cards as ‘cash-back’ deals could be banned

 

Christian McCashin

 

Fears that ‘cash-back’ mortgage offers will be banned this summer is expected to cause a surge of homeowners switching their mortgage.

Fianna Fáil is looking to ban the offers, which give borrowers a return of around 2% of the mortgage back in cash.

This would force the banks to compete on interest rates alone, which is seen as better value in the long term.

 

Fianna Fail’s spokesman for finance Micheal McGrath has proposed an amendment. Pic: Collins

The Variable Rate Mortgages Bill would give the Central Bank the power to limit interest rates on mortgages, although a warning by the Attorney General that it might not be constitutional will be looked at. However, Fianna Fáil finance spokesman Micheal McGrath has proposed an amendment to it banning mortgage cashback deals. The offers, where a bank hands over a percentage of the loan in cash on drawdown, have become increasingly popular and are used by banks to drive up their market share, without having to cut mortgage rates.

Bank of Ireland offers homebuyers and mortgage-switchers 2% back on their mortgage as cash, with another 1% available for the bank’s current-account holders.

The EBS, which is part of the AIB group, offers €2,000 back in cash, and Permanent TSB offers not just 2% cash back on the value of the mortgage, but also 2% of the monthly mortgage repayment back in cash every month.

Ulster Bank offers a flat payment of €1,500 towards legal fees. ‘This amount is fixed and will not change if your legal fees are higher or lower,’ it says.

Struggling homeowners’ campaigner David Hall, of the Irish Mortgage Holders’ Organisation, welcomed the proposal to scrap the cash-back offers. ‘Ultimately you’re paying for it. All of these things cost money, there’s no such thing as a free lunch in banking,’ he said. ‘You might get a couple of quid now but ultimately it’s being added on to the bottom line of variable rates, that’s paying for it.

‘So you’ll never get variable rates lower if you keep having these scams. By scrapping them they’ll compete on the straight-forward rate, there’s no misinterpretation, no sneaky language, very straight forward, you’re just going on straight, raw rates,’ he said.

 

Joey Sheahan, of MyMortgages. ie, believes a number of factors have led to a surge in enquiries in the past few weeks. ‘Currently the mainstream lenders are offering sizeable cash incentives to certain cohorts of the mortgage market to encourage them to move lenders,’ he said. ‘The merits of this are up for debate but Fianna Fáil is putting forward a proposal to ban these cash-back offers.

‘If accepted, the Bill could come into force by the summer, so we are going to see large swathes of people – who might have, up until now, been on the “switching fence” – make moves to avail of these offers before they are taken off the table.’ Brokers forecast the switcher market alone will experience double-digit growth in the first half of the year, as an increasing number of mortgage-holders learn of the option which could potentially save them anywhere in the region of €300 a month or €112,000 interest over the lifetime of a €350,000 mortgage, about a third of the loan’s value.

In the first half of last year 1,319 people switched or re-mortgaged but that is expected to grow to at least 1,500. That figure could go as high as 2,000 during the first six months of this year.

Switching and remortgaging saw the largest increase in transactions, up 44% on 12 months earlier, the most recent figures show, up from 309 in November 2016 to 445 in November last year, an extra 136 mortgages.

Mr Hall said mortgage-holders should take up the cash-back offers while still available but warned: ‘People should ensure that they benefit from it, that there’s nothing hidden, that there’s no disadvantage with the mortgage rate.

‘Also, all brokers should declare what commission they’re getting so the public understand that if you’re switching from Bank of Ireland to AIB and AIB are paying the broker €500 that you’re told that in advance.’

 

Source: https://extra.ie/2018/01/24/news/irish-news/mortgages-gold-rush-cash-back-deals-banned

 

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

 

 


 

Experts at MyMortgages.ie have reported a flurry of activity in the mortgage switcher market since the beginning of the year.  The brokers forecast the switcher market alone will experience double digit growth in the first 6 months of the year, as an increasing number of mortgage holders learn of the option which could potentially save them anywhere in he region of €311 per month and €112k over the lifetime(1) of an average €350k mortgage.

Joey Sheahan, head of Credit at MyMortgages.ie,  believes a number of factors have led to the influx in enquires they have experience in the last two weeks.

“We have experienced a three-fold increase in the volume of enquiries received since January 2nd from mortgage holders all over the country wondering if they might be eligible to switch lender and avail of cheaper rates. We put this down to a number of factors.

“As a results of recent media reports, anecdotal evidence suggests that an increasing number of mortgage holders seem to now be aware of the fact that switching lenders to avail of a better rate might be viable option for them.”

“Towards the end of year myself and others in the industry endeavoured to highlight the fact that more mortgage holders can and should switch lender to reduce their monthly payments. It was also revealed that changes in the way lenders operate have meant that many only charge a very small, if any, break out fee from fixed rate mortgage, so what was once a significant monetary hurdle to switching is now obsolete in many cases.

“1,319 people switched or re-mortgaged in the first half of 2017 and we expect this number to grow to at least 1,500 but could go as high as 2,000 during the first six months of 2018.”

Experts at MyMortgages.ie predict that recent proposals put forward by Fianna Fail to ban bank incentives to switch will lead to even greater level of activity as people try to “get in” before such legislation is introduced.

Sheahan went on to say: “Currently the mainstream lenders are offering sizable cash incentives to certain cohorts of the mortgage market top encourage them to move lender.

“The merits of his are u