Personal Finance Ireland

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2011-03-31T14:55:00.000+01:00

Please note that this Blog is no longer updated.

Checkout the MortgageLine Blog at http://www.mortgageline.ie/blog/

How Can i Reduce My Home Insurance Cost?

2010-08-31T11:40:00.001+01:00

If you have just got the renewal quote for your House Insurance and are not happy with the quote then there is a way to reduce the cost.

It is advisable to review the amount you are insured for at least every two years. The amount that you insure your house for is referred to as the Reinstatement Value or the Rebuilding Cost. Basically this the amount of money it would cost to rebuild your house in the unfortunate event that it burned to the ground.

If you have not checked the rebuilding cost of your house recently then chances are you will be way over insured. The reason for this is that it is now allot cheaper to rebuild a house than it was a few years ago.

Your house insurer will never tell you that you are over insured as they want to maximise profits. The higher your rebuilding cost the higher the profits are for the insurer.

A great guide to the amount you need to be insured for can be found by clicking on the following link

http://www.scs.ie/2010-SCS-House-Rebuilding-Insurance-Guide.pdf

This link is a PDF guide which you can download from The Society of Chartered Surveyors website. You need to know the approx Sq. Ft size of your house and the guide then shows you how to work out the up to date rebuild cost.

Armed with your new lower rebuild cost you can get your insurer to quote you a new lower premium.

Debt Legislation

2010-08-06T22:24:00.000+01:00

Ireland is in urgent need of new personal debt legislation. There has been allot of talk from Politicians and organisations like MABS calling for help for our over indebted population. However little or nothing has been done to help families struggling with debt.

The time for action is now. We really cannot afford to wait any longer. Families across the country are struggling with loan and credit card repayments. Organisations like MABS, by their own admission, cannot cope with the numbers seeking their help.

In the UK there has been proper legislation put in place years ago and they really are light years ahead of Ireland. Anyone in the UK who is struggling with debt can avail of an IVA. This is basically an agreement that is negotiated with your creditors. A full assessment is done of a persons income and expenditure. After all necessary living expenses are accounted for an affordable monthly payment is agreed. This payment is then formalised legally by an IVA and the person can be clear of debt in 3 to 5 years.

Its not rocket science and works very well in the UK. In Ireland we normally copy quality legislation like this but to date nothing has been done. The Irish legislators really need to put under pressure to introduce something similar to IVA's here.

Without IVA's, those in debt are really at the mercy of their creditors. if you are unable to make your repayments on a loan or credit card you can find yourself in court. First to have a judgement for the debt registered against you and then to have an installment order against you. if you fail to make repayments under an installment order you can then face jail. This is a crazy system and how nothing has been done yet about this archaic system beggars belief.

Hopefully those in power will have some compassion soon and give people in debt a helping hand?? I really hope they do sooner rather than later.

Variable Mortgage Interest Rate Increases

2010-07-20T10:50:00.000+01:00

EBS Building Society is the latest mortgage lender to increase its variable mortgage interest rates by 0.6%. This recent increase also applies to anyone who has a mortgage with Haven Mortgages, the Broker arm of EBS.

Is this rate increase justified?

EBS will quote the cost of funding and the fact that they have to become a profitable company again in order to start paying back the money that the government has pumped into the society. On the one hand it does seem logical that they cannot continue to make a loss on mortgages if they are to move forward and become profitable again. However this is very hard for mortgage customers to take as they are the ones who have effectively saved the banks with the tax payers bailouts.

Variable rate mortgage cusotmers are really the only ones that the banks can use to increase their profit margins on morgages. Tracker rates can only be increased when the ECB moves rates but it is unlikely to do so in 2010.

Unfortunately it seems like there are more interest rate increases to come this year and next. There is a good chance that Bank of Ireland, AIB, Ulster Bank and Irish Nationwide will also increase rates before the end of August.

These variable rate increases will not affect those on fixed or tracker rates. Those on fixed rates however will be moving onto higher variable rates once their fixed rates end. Those on trackers will not see any movement until the ECB moves rates.

Anyone on variable rate mortgages really should consider a fixed rate. Fixed rates have increased over the last 12 months and in hindsight last year was the time to fix. However there are still some good fixed rates available.

Negative Equity Mortgages. Right or Wrong??

2010-07-01T10:09:00.001+01:00

According to Charlie Westin negative equity mortgages are on the way with some mortgage lenders already offering them to their existing customer.

Are Negative Equity Mortgages a Good Idea??

It is obviously not a good idea to have a mortgage for more than your property is worth, however many people in Ireland today (me included) are in negative equity through no fault of their own. If you are in a property you are happy with and you can afford the repayments then negative equity is not necessarily a total nightmare. The hope is that in time property prices will recover. How long this will take is anybodys guess but you would imagine that prices cant continue to fall indefinately.

As I see it there are two main groups of people who are suffering badly from negative equity. The first group of people are those who simply cannot afford to make their mortgage payments. With no option to sell the property they are stuck in an awfull situation. Most mortgage lenders are helping people with interest only repayments and in some cases agreeing to write off the negative equity if the property is sold for the current market value. If you are unable to make your mortgage payments you really need to approach your mortgage lender and see what your options are. If you cannot get anywhere with your mortgage lender then firms like DebtLine can offer help and advice.

The second group of people badly affected by negative equity are able to afford their repayments but need to move. This group of people most likely bought an appartment or a starter home just to get on the property ladder in the Celtic Tiger property rush. This is the group that can be helped with negative equity mortgages. A negative quity mortgage will help them move and get on with their lives. They will still be in a negative equity situation but it is much easier to handle if you are in a property you want to be in.

From a Banks point of view it is much better to have a negative equity customer in a home they are happy with. There is much less chance of repayment deliquency you would think.

In my opinion negative equity mortgages used correctly for people already in negative equity can be a workable solution for mortgage customers and mortgage lenders. Hopefully we will start to see more information on negative equity mortgages sooner rather than later.

Debt Management

2010-05-06T16:47:00.002+01:00

Many people in Ireland today are struggling with huge debt repayments that they just cannot afford. Most debt problems arise due to a change in circumstances. You may have taken a wage cut, lost your job, suffered health problems or perhaps a relationship breakdown.

Debt can quickly creep up on you. You might have a car loan, personal loan, credit union loan, credit card and store card. All of these debts can be very manageable when you are secure in your job but if you end up on a reduced income then late payments quickly turn into arears and solicitors letters.

The sooner you face up to the problem and seek help the better. There is help available from government agencies like MABS and also from private Debt Management companies like DebtLine.

A company like DebtLine can help you with a Debt Management Plan. The first step is for your debt adviser to help you with a budget. Your own personalised budget will document all of your income and outgoings.

The next step is to prioritise your Debts. There are two types of Debts. The first type of debt is secured Debt like mortgages and car loans. Failure to make payments on secured debts will eventually result in repossession.

The second type of debt is unsecured debt like personal loans and credit cards. Failure to make payments on unsecured debts will eventually result in you being brought to court where a judgement for the debt will be registered against you and a payment order agreed upon. In a worst case scenario you could face a jail sentance.

Your Debt adviser will assess your overall financial situation and negotiate with all of your creditors to come to an affordable solution to your debt problems. A Debt Management Plan will mean that you will have one affordable monthly repayment to cover all of your unsecured creditors.

If you are struggling with debt then you should contact DebtLine today to see how a Debt Management Plan could be the solution to your debt problems.

Home Buyers Tips for 2010

2009-12-22T16:49:00.002Z

If you are thinking of buying a property in 2010 then you need to make sure you avoid the following 5 common mistakes.

1/ Getting too many mortgage quotes

As a general rule shopping around is a good idea but with mortgages it can sometimes be a bad idea to get too many quotes. When you apply for a mortgage quote banks will generally run a credit check on you. Each time a credit check is carried out it leaves a footprint on your credit report. If you apply to several banks then there will be several notes to this effect on your report. This can sometimes go against you when you eventually find the right property. A good Mortgage Broker, like MortgageLine, will find you the best deal and then only apply to that lender for you. This looks much better on your credit report.

2/ Going direct to your bank for a mortgage

Going direct to your bank for a mortgage is a bad idea. One thing that is a given after the last two years is that Irish Banks cannot be trusted. Check out the following Irish Independant article, "Pop into your local bank for bad advice"

By going direct to your bank you are limiting your options. A good Independent Broker like MortgageLine will make sure you get the best deal, not only on your new mortgage, but also on the extras that you will need like Life Assurance for example.

3/ Fixing your mortgage for too long

Rates are at historic lows at the moment and so 2, 3 & 5 Year fixed rates are attractive and well worth considering. However it is not a good idea to fix for too long. Some banks for example will offer you fixed rates for 10 and in some cases 20 years. Fixing for too long is not a good idea because you just cannot be sure how your circumstances will change over that period. Fixing for just 2 or 3 years gives you some security but also the flexibility that you will not have to wait too long if you want to move house or remortgage.

4/ Believing your Estate Agent

In the current market bids below the asking price are normal. In this scenario the Estate Agent will probably come up with some spiel like the following,

"..I should warn you that there is another couple looking at the property tonight and they are very keen and will probably offer the asking price. If you can raise your offer now I can guarantee the property is yours.."

The Estate Agent is most likely preying on your fears of losing the property. Stick to your original offer and tell the Agent to come back to you if anything changes. The Agent will do everything possible to get you to raise your offer so buyer beware!

5/ Not budgeting for the hidden costs

Unfortunately as well as paying for the property itself there are a number of other costs that you will need to budget for. These include solicitors fees, surveyors fees and valuation fees. Ask your MortgageLine Adviser about the costs you need to budget for.

Finaly its hard to say what 2010 will bring. Our economy has took one hell of a pounding over the last few years but I think we can be allot more optimistic going into this new year than we were last year.

If you need good honest Independent Financial Advice in 2010 give us a call or Apply Online

Wheres the carrot??

2009-12-18T13:55:00.001Z

I have just got off the phone with a customer that I setup a mortgage for a year or two ago. She lost her job back at the start of 2009 and has since returned to college to complete a Degree course.

When she became unemployed she signed on for social welfare and claimed her mortgage interest relief supplement. Her lender KBC Homeloans was also contacted and a plan put in place to keep things ticking over till she finished her degree and got back to work.

This woman has now just received notification from the Dept of Social Welfare that her payments will be stopped unless she resigns from her college degree course.

I have to say I am dumbfounded to hear this. This poor woman has no chance of getting a job at the moment in her field and so she has went back to college to improve her future prospects of employment and now she is being told that her benefits will be stopped unless she resigns from her college course.

This is not a joke, this person has a letter in black and white telling her in no uncertain terms that she has to drop out of her college course or face the prospect of poverty and homelessness. The only carrot being dangled infront of this woman is leading her home to her couch despite the fact that she wants to get her degree and improve her chances of getting back to work.

And there was me stupidly thinking that we are supposed to be supporting unemployed people to get the training and further education that they need. How is this woman supposed to live with €0.00 from the state. Surely she should be entitled to something.

You Just Cant Trust the Banks (Now we have concrete proof)

2009-12-08T10:13:00.006Z

You just cannot trust the banks. In his latest report the Financial Ombudsman, Joe Meade, once again confirms why you cannot trust the main Irish Banks. In his article in the Independant, Charlie Weston summed it up perfectly, "if you want bad advice, then pop into your local bank branch"

The Ombudsmans report is full of examples of Greedy Irish Banks ripping off vunerable customers. One of the most worrying things is that many of the ripped off customers are old age pensioners. If the banks dont have the morals to treat our elderly citizens properly then what chance does anyone else have.

Irish Banks and our very own Financial Regulator have overwhelmingly failed the Irish Nation. This is not new news but it is good to see it in black and white and also that the ripped off customers involved are getting compensated. God knows how many ripped off customers there are out there who have not complained to the Ombudsman. Anyone who have been the victim of bad advice by our shameless banks needs to contact the ombudsman asap.

Joe Meade retires from his role as the Financial Ombudsman at the end of this month. He has been worth his weight in gold to many Irish consumers who have been compensated under his watch. You can see a copy of his latest report at http://www.financialombudsman.ie/

What we really now need is for Joe Meade to switch to the Financial Regulators office for a few years to put a stop to the bad advice before it happens.

New Debt Management Service

2009-12-01T16:49:00.006Z

MortgageLine have launched a new service with DebtLine.ie

Many Irish consumers are experiencing problems with Debt Repayments. Incomes have reduced substantially over the last year and so it has become increasingly difficult for many to keep up with their debt repayments.

During the Celtic Tiger years too many people (me included) simply borrowed too much. Many people have been left, not only with big mortgages and negative equity, but also with big car loans, personal loans and maxed out credit cards.

It's really important to face up to your debt problems. Unfortunately they will not go away of their own accord. There is no shame in getting into debt, it happens to the best of us, but it is important to deal with the problem head on as soon as possible.

With the new service from DebtLine Ireland a budget is worked out to see what customers need to cover priority household bills like their mortgage and living expenses. Then whatever is left over is divided out proportionately to secondary creditors like credit cards and personal loans.

DebtLine Ireland will negotiate hard with creditors and in most cases aim to get all future interest and charges waived so that debts can be cleared quicker.

It is going to take a long time for many Irish consumers to clear their Celtic tiger debt. However with a Debt Management Plan from DebtLine Ireland you can get that debt cleared in a realistic and manageable way.

Contact DebLine Ireland today to see if a Debt Management Plan is what you need to get your life back on track.

Any Positive News for First Time Buyers?

2009-08-05T12:24:00.013+01:00

It is hard to find any positive news at the moment however things are looking up for First Time Buyers.

Mortgage Brokers and customers alike are starting to get used to the new stricter lending policies of the Banks and Building Societies. During the Celtic Tiger years there is no doubt that the banks helped to fuel the property boom by reckless lending practices and in particular 100% mortgages. Banks, in hindsight, now realise that they were reckless in the past and have now gone to the other extreme and are being overly prudent. Hopefully over the next several months a happy medium will be found and we will get back to normal lending practices.

What are normal Mortgage lending practices you may ask?
Basically all prospective mortgage customers should be able to show a solid income and two or more of the following

1/ Ability to repay or proven repayment capacity
This can be shown for example by a history of rent payments, previous loan repayments or a consistent savings history.
2/ Proven Access to Deposit
This can be from your own personal savings, a gift from parents or other means. Wherever the deposit is coming you will be asked for bank statements to show the balance and proof they are from an unborrowed source. You will need at least 8% of the property purchase price.
3/ Regular Savings
Saving a regular weekly or monthly amount from your current account into a separate savings account is a great way of increasing your chances of getting a mortgage.

If you are not in a position to get a mortgage now then you need to plan for the future and get yourself into a position where you will be able to get a mortgage. You need to keep your bank account in good order with no missed direct debits and if you can pay your rent or savings as a regular monthly standing order this will also help.

The good news for First Time Buyers is that the stricter lending criteria and hence lack of mortgage approvals is pushing prices even lower. If you can get a mortgage and have access to a deposit then you have great bargaining power. Properties are currently selling for well below their asking prices so don't be put off by over priced properties. Now is the time for cheeky bids, now is the time to grab a bargain. The worst the seller can do is say no.

If you would like to discuss your mortgage options contact MortgageLine

PTSB Increase Variable Rate

2009-07-24T13:39:00.003+01:00

The rumours that PTSB were about to increase rates has been confirmed today. PTSB have announced that variable rates for existing customers will increase by 0.5%. This will mean an increase of about €65 for anyone with a mortgage of 250k over 25 years.

This is terrible news for all mortgage customers not just those with PTSB. Although other lenders have today denied reports that they are planning rate increases, it is almost inevitable that they will.

It is a hard pill for mortgage customers to take at this time when they are already trying to cope with the effects of the worst recession to hit this country in decades.

PTSB to announce variable rate increase

2009-07-22T09:00:00.004+01:00

In a number of different newspapers yesterday it is rumoured that PTSB are planning to introduce an increase to their variable rate for new and existing customers. It is only a rumour at this stage but it would seem that the news has been leaked from PTSB to try and soften the blow of the news when the actual increase is announced.

This is bad news for all Irish Mortgage customers currently because if PTSB put their rates up then the other Irish Lenders will no doubt follow with increases of their own.

Customers on tracker rates are safe for now as it does not look like the ECB will increase rates anytime soon but all those on variable rates should prepare themselves for a rough ride over the next few months.

Anyone currently on a variable rate should really consider fixing for at least 2 or 3 years. However it really depends which lender you are currently with. BOSI for example has very high fixed rates but on the other hand lenders like AIB and EBS have attractive fixed rates. You really need to check with your own lender and then make a decision as to whether or not it is worthwhile fixing.

Should I Switch Mortgage Lenders?

2009-07-05T20:01:00.004+01:00

As the recession continues to bite it is more important than ever to operate a tight personal budget. For most people their mortgage is their biggest monthly commitment and so an opportunity to reduce the cost of your mortgage should not be missed.

If your mortgage is with one of the foreign owned banks then now is the time to switch. Irish mortgage lenders have much better deals, especially if you are looking for a good fixed rate. The difference in the worst and the best 5 Year Fixed Rates is enormous. The worst 5 Year Fixed is 7.75% and the best is 3.86%. Over five years there would be a saving of over €35,000 if you picked the best rate.

However these huge savings are not for everyone. Remortgages are only available to borrowers who have equity in their properties. The highest remortgage loan to value on offer is 90% at best and as low as 50% with some lenders. Therefore a remortgage is probably not on the cards for anyone who has bought over the last 4 or 5 years.

If you do have equity in your property then you should contact a good Mortgage Broker who will calculate the possible savings for you.

Foreign Banks are not interested in new mortgage business

2009-06-26T08:59:00.005+01:00

Bank of Scotland Ireland (BOSI) effectively closed their doors to new mortgage business yesterday. They have hiked their new business rates to a totally uncompetitive level and as such are effectively saying to customers that they do not want your mortgage business.

Their variable rate for new business now stands at 6.06 APR and the 5 Year Fixed is now an incredible 7.12 APR. These rates seem crazy when you compare them to the likes of Bank of Ireland and AIB with variable rates as low as 2.28 APR and 5 Year Fixed as low as 3.92 APR.

A new trend has emerged in the Irish Mortgage Market since the government bailout of banks here and abroad. The banks coming under the Irish Guarantee are open for new mortgage business. There is no question that the Irish Banks have tightened their lending criteria but they still have attractive interest rates for those who qualify. The foreign owned banks have been bailed out in their mother countries and the last thing they want to be seen to be doing is aggressively competing for new mortgage business in another country.

Foreign owned banks like BOSI, First Active and Ulster Bank are not only knocking back new business with high interest rates they are also putting off new customers with restrictive criteria. BOSI for example will now only offer First Time Buyers 80% of their new property purchase price.

The only good news from BOSI is that they have confirmed the rate increases will not affect existing customers, only new business. So they are effectively saying that their doors are closed for new mortgage business.

No Proven Repayment Capacity? No Mortgage

2009-06-23T21:47:00.007+01:00

92% mortgages are now the norm for First Time Buyers with many getting a helping hand from the folks. However getting your hands on the 8% deposit is not the only barrier to getting onto the property ladder. Prospective First Time Buyers are slowly but surely becoming more familiar with the phrase "proven repayment capacity."

In order to get a mortgage nowadays you need to have a steady income and access to at least an 8% deposit but now more and more risk adverse mortgage lenders also want to see a proven repayment capacity.

What is a capacity to repay? and how do I prove that I can pay?

Mortgage lenders will look for a combination of one or more the following to show that you are a good candidate for a mortgage approval.

1/ If you are renting a property then this in itself is proof that you can pay a mortgage. You will need to pay your rent through your bank account by standing order if possible. If you can show your rent being taken from your current account for at least six consecutive months prior to seeking a mortgage you are well on your way to proving repayment capacity.

2/ If you are living at home with the folks rent free then you will need to show that you can save at least an amount equal or more to the monthly repayment of the mortgage you require. Again six consecutive monthly amounts into a savings account will suffice as repayment capacity.

3/ If you have loans or credit cards then getting a mortgage will be a bit harder as the monthly repayments will be taken off your qualifying income. However if you use the six months before applying for a mortgage to reduce or clear your debts then this is another way to prove repayment capacity.

With the advent of the credit crunch mortgage lenders want to make sure that you not only qualify for the mortgage but also have a proven track record or capacity to repay.

Whether we like it or not we are now back to the position my father was in when he got his first mortgage. Don't expect any favours from your local bank manager. Get yourself into a position where you can show your repayment capacity. Seek advice from a good Independent Mortgage Broker.

Have you considered asking your parents for a helping hand?

2009-06-22T16:50:00.009+01:00

There are many obstacles these days which make buying your first home seem an almost impossible task. With the advent of the credit crunch Mortgage Lenders have tightened up their qualifying criteria making it difficult to get your finance approved.

For those lucky enough to get an approval the maximum available is 92%. This leaves a shortfall of an 8% deposit which needs to be funded from an unborrowed source. If you are paying rent then it could take forever and a day to save the 8% needed. However there are a number of ways that your parents can help you.

The first and most obvious way your parents can help is to simply hand over the 8% needed. If your folks have the cash at hand and are willing to hand it over then you are in luck. However not all parents have thousands of euro lying idle on deposit.

Another option would be to ask your parents if they are willing to let you live with them rent free for a while. With no rent or bills to pay you should be able to save the 8% deposit in no time.

Thirdly if your parents have some spare land (many boggers do! no offence intended) then they could offer you a gift of a site. Most mortgage lenders are willing to lend you the full cost of construction if you have a site. The site is effectively your deposit.

Finally if your folks are unable to help then you should turn to your attention to your local council. Most local authorities have Affordable Homes available. These are basically homes that are available to you at a discounted price. It is possible to get a 100% mortgage on the discounted purchase price so a deposit is not necessarily needed.

Despite the current doom and gloom there are options available for First Time Buyers. Falling property prices can make things look scary however a lifetime of rent down the drain is a much scarier prospect. Over the medium to long term we will undoubtedly see some positive growth again in property prices.

To Fix or not to Fix?

2009-06-19T08:43:00.006+01:00

I have commented on fixed rates before in this blog and I am going to make the same recomendation here again. Now is a good time to fix your mortgage rate for 3 to 5 years.

If you are on a variable or tracker mortgage then you have benefited from the dramatic ECB rate reduction. Last September the ECB rate was 4.25 but now stands at 1%. However it does not seem likely that there will be any further reductions any time soon. In the medium to long term it looks like rates will be on the up.

AIB has just this week put its 5 year fixed rate up from 3.69 to 3.89. This is not a huge jump and their 5 year fixed is still the best on the market but it is a sign of things to come.

In brief if you are interested in locking into a fixed rate now is the time to do it before rates rise and you miss out on the low fixed rates that are currently available.

The first thing you should do is contact your existing mortgage lender to see what fixed rate options they have available. Then you should check with a reputable mortgage broker like MortgageLine, who can search the market, to see if it is worthwhile switching your mortgage.

Bank of Scotland reduce LTV's to 80%

2009-05-25T17:32:00.006+01:00

Bank of Scotland Ireland have today announced that they are reducing the Loan to Values for new mortgage approvals. This is bad news for First Time Buyers as it means there is now one less option in the higher LTV bracket.

As well as reducing Loan to Values Bank of Scotland have also hiked their new business rates. Their 5 year fixed for example is now 6.15%. AIB's 5 year fixed is currently 3.69%.

The only Mortgage Lenders now offering 90 to 92% of the purchase price are the ones covered by the government guarantee. For instance 92% mortgages are still available from AIB and Bank of Ireland. PTSB will lend up to 90%.

There is now a very limited range of options for First Time Buyers and only the best applications are getting approved.

ECB Rate falls to record low of 1%

2009-05-07T12:44:00.004+01:00

The European Central Bank has just announced today that it is reducing the ECB interest rate to 1%.

This means a futher saving of approx €30 per month on a 250,000 mortgage over 25 years for those on tracker rates. Hopefully all Mortgage lenders will also pass on the cut to variable customers too.

With rates now at an all time low fixed rates are looking very tempting, even perhaps for those currently on good tracker rates. Rates will inevitably go up at some stage so fixing in for the next 3 to 5 years could be a good option.

If you need to discuss interest rates with one of our Mortgage Advisors you can Apply Online here.

Confused about Mortgage Interest relief??

2009-04-30T09:39:00.009+01:00

There has been alot of confusion over Mortgage Interest Relief since the budget but even more so in the last few days. Confusion has increased because it has now come to light that some who do qualify for the interest relief will loose it temporarily. The reason for this is that it is going to be hard for the revenue to clarify whether or not certain customers qualify for the relief.

The change in the budget is not that confusing in itself. Basically anyone who has had a mortgage for longer than seven years will no longer qualify for tax relief. The Revenue has clarified the Mortgage Interest Relief Budget changes on their website.

Haven Mortgages (EBS Group) have also clarified how some people who will still qualify for the relief might loose it temporarily while the changes are introduced.

Haven Mortgages Statement

"As you may be aware, the recent Budget introduced changes to Tax Relief at Source (TRS) which will affect some mortgage cusotmers. From the 1st May 2009 all qualifying mortgages will receive TRS for the first seven years of the mortgage only.

Consequently, to allow the Revenue to administer this change in the TRS rules, TRS has been temporarily ceased for all non-first time buyers with immediate effect. The Revenue has committed to carry out a review of all affected accounts and will, at a later date, reinstate TRS on all accounts that continue to qualify for relief.

For example, customers who may have switched lenders in the early years of their mortgage or purchased a second property are no longer considered first time buyers by the Revenue - but will retain the balance of TRS still available to them until the seven year period has expired - this category of customer will have TRS reinstated as part of the Revenue's review at a later date (to be notified)."

Haven Mortgages clarification of this matter is very welcome and helpfull. In a seperate statement the revenue have confirmed that, "the relief at source should be reactivated in June where an entitlement is established, and that any arrears will be credited to customers accounts automatically"

Over the next month there are going to be alot of mortgage holders who will loose their Mortgage Interest Relief temporarily. With all the other recent tax increases this extra burden has come at a bad time for hard hit mortgage holders.

Sick of your Credit Card Bill? These four tips should help you get the balance cleared as soon as possible

2009-04-24T13:38:00.007+01:00

Your credit card can be your friend or your enemy, depending on how you use it. For example, if you spend sensibly and always repay your monthly bill in full, then you can enjoy up to 59 days of interest-free credit.

Sadly, most of us often spend too much and cannot afford to clear the balance in full each month. Once your credit card balance becomes a multiple of your monthly income you are in trouble. It can be tempting to pay just the minimum balance each month but this is just a long road to nowhere.

However don’t despair. Here are five ways to deal with your credit card debt.

1/ Play by the Rules

If you go over your credit limit, miss a repayment, or fail to pay on time, then you have broken your card's terms and conditions. As a punishment, your card provider will charge you a fee, typically €15 for each and every offence.

Therefore, it's vital to ensure that your monthly payments are on time. The best way to do this is to set up a direct debit for at least your minimum monthly repayment. Then you can top up the minimum payment with extra payments when you can.

2/ Scrap your payment protection insurance

Credit Card Payment Protection insurance is one of the biggest rip-offs ever. Some payment protection policies like Mortgage Payment Protection can be worthwhile, however avoid Credit Card Payment Protection at all costs; it’s just a money spinner for the credit card companies and an extra cost you can do without.

So, unless you're claiming on your policy, or expect to lose your job any day soon, then cancel your cover and put the saving towards reducing your debt.

3/ Get a 0% balance transfer

Even with the credit crunch in full swing there are still credit card providers offering 0% balance transfer deals. You should get your balance transferred to a 0% card as soon as possible and use the 0% introductory rate time period to get as much of the balance paid off as possible.

4/ Avoid minimum monthly repayments

If you are paying just the minimum balance each month then it will take you forever and a day to clear your debt. This is because the minimum monthly repayment taken by most credit cards is a very low percentage of the monthly balance.

In the current economic climate it is easier said than done to pay over and above the minimum payment each month. However no matter how tight things are you have to work on reducing the balance and above all else stop spending on your card.

Finally, remember that a credit limit is not a credit target. It can be a good idea to reduce your credit limit as you reduce your balance but ultimately your target should be to get your balance to zero as soon as possible.

Springboard Mortgages Announcement

2009-04-23T11:45:00.006+01:00

Shane O'Sullivan, Managing Director of Springboard Mortgages has today made the following announcement to Mortgage Brokers,

"It is with great regret that I write to advise you that Springboard Mortgages is to cease new lending with effect from 30 June 2009.

This decision follows a review by senior management within the Irish Life & Permanent Group. It was prompted solely by the challenging funding conditions which continue to exist in the marketplace."

This is disappointing news for the Irish Mortgage Market. Springboard has been a well run organisation and has provided a valuable service to all its existing customers.

MortgageLine would like to wish everyone at Springboard all the best for the future.

Thinking of buying a house? Here are four things you need to do to make sure you will be ready

2009-04-19T21:34:00.011+01:00

1/ Save a deposit

Saving a decent deposit is very important for buyers hoping to secure the best mortgage. As well as being in steady full time employment a mortgage lender will want to see proof that you are capable of saving towards your first home.

It is possible to get help with your deposit from parents or family but you will need some history of savings or paying rent to show repayment capacity. AIB and Bank of Ireland for example will not approve you for a First Time Buyer mortgage if you have no proven repayment capacity. The two main ways to show repayment capacity are as follows. The first option is to save consistently for at least 6 months prior to seeking mortgage approval. The second option is to be able to show your monthly rent being paid from your bank account for at least 6 months. A consistent saving or rent history will substantially increase your chances of getting a mortgage.

2/ Get your bank account and credit rating in order

As well as preferring borrowers with a history of savings, mortgage lenders also want people who keep their bank accounts in good order. You will need to pay your bills and loans on time, preferably by direct debit or standing order. Referral fees and missed direct debits will ruin your chances of getting a mortgage.

If you are worried that you may have had some credit problems in the past then you can check your credit rating with the Irish Credit Bureau at http://www.icb.ie/ You can apply online for a copy of your credit report and you will then be able to see if there is a problem or not.

3/ Talk to a Mortgage Broker

A good mortgage broker can help you compare the different mortgage products available and help you decide which one's best for you. They will also know what each mortgage lender will and won't do for you. So by using a Mortgage Broker you give yourself the best possible chance of getting approved and also of getting the best deal.

However, before you choose a mortgage broker bear in mind that some brokers offer products from a limited number of lenders while other brokers offer products from a wide range of lenders. It's a good idea to do some research of your own and see what lenders your chosen broker has access to.

4/ Get mortgage approval in principle

Before you go house hunting make sure you have a mortgage approval in principle. There is no point looking at properties and then realizing that they are out of your price range.

To get an approval in principle you will generally need the following documents,

6 months bank statements
3 recent payslips and a P60 if you are a paye employee or
2 years audited accounts if you are self-employed
savings statements
Loan statements

It is never too early to seek mortgage approval. A good mortgage broker like MortgageLine will not charge you anything for getting an approval in place. If it is not possible to get an approval now then you can get pointers on what you will need to do to get an approval at some point in the future.

Is now a good time to fix my mortgage?

2009-04-09T15:43:00.006+01:00

Personally I think that now is a great time to think about fixing your mortgage. Although it is expected that interest rates will fall again next month is is debatable whether or not lenders will pass on further reductions to fixed rates.

Fixing for 3 or perhaps even as long as 5 years is an option. Some banks are offering 10 year fixed rates but that is an awfully long time to commit to.

AIB have good fixed rates on offer. For example you can fix for three years at 3.1% or for five years at 3.6%.

These are great rates to fix in at, however fixing your mortgage rate might not be the best option if you,

1/ are currently on a good tracker rate
2/ might need to move house before the end of the fixed rate
3/ want to pay off lump sums

If you are not affected by the above then fixing might be a good idea. Despite the fact that there may be another rate cut next month there is not much further that rates can go. You could say we are close to the bottom of the current rate cycle.

Once the economy starts to improve (and it will at some stage) rates will undoubtedly start to creep up again. Chances are that rates will edge back up to 4 or 5% and so fixing in at anything under 4% has to be a good idea.

2009-04-02T08:35:00.006+01:00

The European Central Bank has just announced that it is reducing the ECB rate to 1.25%.

This is more great news for all homeowners on tracker or variable rates. Todays reduction of 0.25% will mean a saving of approx €25 per month on a mortgage of €200,000 over 25 years.

With rates now at an all time low and with little room for them to fall any further, now is a great time to think about a fixed rate.

AIB for example now has a great 2 year fixed rate of just 2.8% and there are lots of other great fixed rate deals on offer too.

If you are interested in a Free Mortgage Review to see what your options are you need to apply-online with MortgageLine today.

First Time Buyer Mortgage

2009-04-01T17:56:00.005+01:00

It is no secret that property prices have fallen over the past year or so. This could mean that now is a good time. In the past Irish property prices have without doubt been overpriced. However with property now more affordable it is a very good time to buy - particularly for those who have nothing to sell.

Be careful about waiting for prices to go down even further. If you have found a place you want to live in then go for it. The chances are it will go up in price over the long term. (Remember you are buying a HOME not an investment, somewhere to live and that you can reasonably afford).

So while prices might go down even further does that matter? In the long run they will probably go higher than they are now.

If you need a First Time Buyer Mortgage then the following might help.

Whats the first step?

The first thing you need to do is get yourself into a position where you have access to a deposit. The maximum mortgage for Irish First Time Buyers these days is 92%. This means you will need a deposit of at least 8%. This can be from savings or a gift from a family member.
As well as being in permanent employment or self employed for more than 2 years a Mortgage Lender will generally also look to see that you can afford the new mortgage repayment. A track record of saving and or a history of rental payments will help your case.

Should I go direct or with a Broker?

Unless you are a personal finance expert you will need help and advice with the important decisions. You could go direct to your own bank but will they give you the best deal? A better option is to use an Independent Mortgage Broker who has access to at least seven mortgage lenders. Getting a mortgage is harder today than it has been for several years. A good broker will make sure you get what you need or as close to it as possible and also get you the best deal.

Should I opt for a fixed, variable or discounted rate?

With interest rates falling recently variable rates have been flavor of the month. However with the ECB rate now at 1% it is hard to see how rates can go any lower. With this in mind it could be a good time to think about fixing. The world economy will eventually pick up and when this happens rates will inevitably start creeping back up again.

How much can I borrow and how much will it cost me?

The amount you can borrow will generally be 4 or 5 times your yearly salary. However this varies between lenders for different types of borrowers.

There are some great First Time Buyer packages available at the moment with lenders like AIB offering rates as low as 2.4% and ICS (Bank of Ireland Group) offering €1,000 cashback.

If you are in the market for a First Time Buyer Mortgage contact MortgageLine for a Free Mortgage Review.

Even if you are not thinking of buying straight away it is never too early to contact us and see what your options are.

Stephen Hamilton
MortgageLine.ie

Mortgage Payment Protection

2009-03-27T16:07:00.014Z

Is mortgage payment protection of any real value? Will it pay out in my time of need?

I cannot speak for other products on the Irish market but can I explain the benefits and exclusions of our policy which is available through http://www.paymentprotection.ie/

Firstly if you are a full-time permanent employee and you are not sure how you would pay your mortgage in the event that you were unable to work due to an accident, sickness or redundancy then you need and should take out MortgageLine Payment Protection.

You are covered for all accident and sicknesses from day one as long as it is not something that you have suffered from in the last two years. So you are covered straight away for all new accidents and sicknesses and for all illnesses that you have not suffered from in the last two years.

For redundancy there is a 3 month (90 days) exclusion period from the start of the policy regardless of when you take your mortgage out. Once you have had the policy for 3 months you are then fully covered for involuntary redundancy. Voluntary redundancy is not covered.

If you are self employed or a contract worker then you should think carefully before taking out payment protection and be aware of the policies limitations. For a self employed person to make a claim for redundancy the business must be fully wound up. A self employed person cannot claim for redundancy if work is simply quiet. In the case of a contract worker a claim for accident, sickness or redundancy will only be paid up until the end of the current contract. Therefore if there is only 3 months left on your contract at the time of a claim you can only get a max of three monthly benefits.

In brief cover is available for the self employed and contract workers but because of the limitations the cover is only really suitable for permanent paye employees.

There has been alot of bad press in Ireland over the last few years about mortgage payment protection products. Charlie Weston, of the Irish Independent, for example has written about the bad claims history of the product. However he has not offered any examples or facts and figures, just hearsay and the innuendo of brokers who have no direct knowledge of the product. This is not helpful for consumers, it is just scaremongering and has perhaps prevented some people taking out a policy that they had a need for.

From my experience the main problem with payment protection policies is that over the years bank and building society direct sales staff have sold the policies to self employed and contract workers. Payment protection is unsuitable for them and so they will have found it hard to make a successful claim.

If sold properly to permanent paye employees then this product can be invaluable. We at MortgageLine have now been selling the product for over two years and have first hand experience of our customers making successful claims.

We have sold and continue to sell the product to customers who need it and are suited to the policy, namely paye employees. Unfortunately we are now experiencing calls from customers who were suitable for the policy and now need it but did not take it out, perhaps due to bad press or perhaps because they felt secure in their jobs at the time the cover was offered.

As with any insurance the pros and cons should be weighed up and the terms and conditions read in full.

If you are interested in more information on mortgage payment protection click on http://www.paymentprotection.ie/

Stephen Hamilton

For great value Mortgages, Life Assurance, Home Insurance, Redundancy Cover and Travel Insurance log on to http://www.mortgageline.ie/

Dealing with Debt

2009-03-26T14:58:00.011Z

Sorting out your personal finances can be a daunting task but is something we all need to tackle sooner rather than later. Many of us lived to excess and perhaps borrowed too much during the Celtic Tiger years and are now overwhelmed with debt. In this article I am going to try to give some pointers on where to start when dealing with debt.

1. Do you know how much debt you have?

First of all, you've got to establish how much trouble you're in. Set up a filing system that works for you, and start a simple spreadsheet that shows exactly what you owe, and to who. This should include Mortgage, loans, credit cards, outstanding bills ect.

Make sure you calculate your total debt, both including and excluding your mortgage. Once you've taken these first crucial steps, you'll be able to work out whether you should be saving or paying off debt.

If you have many debts, it usually makes financial sense for you to clear them before you start saving. This is because the interest you pay on your debt is probably greater than the interest you would earn on any savings you have.

2. Do you know precisely how much your debt is costing you?

The cost of each of your debts is the rate of interest you're paying on them. Once you've established how much each of your debts costs, see if you can rework them so you're paying as low a rate of interest as possible. One way of doing this is to take out a 0% balance transfer card and transfer some of your debts onto it.

Once you've minimized the interest you're paying, the quickest way to clear your debts is to snowball them. First work out your most expensive debt (highest interest rate) and then pay as much to this as possible while keeping up the minimum payments on everything else. Slowly but surely you should be able to get your debts paid off one by one.

3. Are you prepared for the unexpected?

Everyone should have a savings cushion equivalent to at least three months' wages, to deal with unexpected costs and emergencies. However in the current environment it can be hard to build up this savings cushion.

If you lost your job tomorrow, how long would you be able to last before you resorted to credit cards and high-interest loans? If you've managed to pay off your debts - but you haven't started saving yet - it's crucial you start straight away!

If you are paying off debts and have no savings then it might be worthwhile considering taking out a payment protection policy to at least cover your mortgage repayments in the event of an accident, sickness or redundancy.

Preparing for the unexpected also means being properly insured. If you have dependents, you should also think about taking out life insurance to provide support for them if the worst happens. It's not a pleasant subject to think about, but nor is the prospect of your loved ones being unable to cope after you're gone.

However despite the need for insurance if you are in debt the most important thing is to tackle your debt head on and get out of debt as quickly as possible. Easier said than done, I know, however if you have a plan and stick to it you will be out of debt in no time.

If you have some equity in your home it may be worth while thinking about a remortgage to clear your debts and get back on track.

For great value Mortgages, Life Assurance, Home Insurance, Redundancy Cover and Travel Insurance log on to http://www.mortgageline.ie/

Is now the prefect time to do home improvements?

2009-03-25T09:08:00.002Z

Alot of Irish homeowners have faced up to the reality that dramatic price falls mean that it is not the right time to sell and move house. However just because you cannot move, it does not mean you have to put everything on hold.

Increasing numbers are turning to a spot of home improvement. Improving your home is a great way to add value to it, as well as increase the equity on your mortgage. The great thing is, there has never been a better time to carry out home improvements. Many home retailers are currently slashing their prices(some are having closing down sales), while builders are becoming increasingly desperate for work, giving you a better chance of grabbing a bargain.

So let's take a look at how you can improve your home without breaking the bank.

1) A splash of paint
It's simple but a fresh lick of paint on the walls can really make a difference. You don't need to be an expert to do it and it doesn't have to cost a fortune. And if you're thinking paint alone is a little dull, you could always use stencils to add snazzy designs! However, if you're still planning to sell your home in the not too distant future, stick to neutral colours. Magnolia can be a little boring, but its usually cheaper and will make your house more attractive to buyers.

2) Revamping tactics
If your kitchen is starting to look a little dated or grubby, you don't have to pay out stacks of money for a brand new one. Instead, why not replace the unit doors and fit new handles yourself? You can also pick up some new kitchen worktops pretty cheaply. IKEA opens in Dublin soon and will have a great selection of low cost kitchen products. Alternatively, you could simply repaint the units in a colour of your choice. You can buy specialised paint to do this -- just make sure you fully clean the surface before painting so that it gives it a nice clean finish.

3) Bag a builder bargain
If there's a fairly large job to be done and your own DIY skills aren't up to it, you'll need to hire a contractor. Usually, the trouble with this is the expense. But in today's climate, you might be pleasantly surprised. In fact, because many builders are currently finding work harder to come by, they're more likely to offer you a competitive deal. So it's worth shopping around and obtaining as many quotes as possible -- at least three anyway -- to ensure you're getting the best deal. What's more, once you've got a range of quotes to hand, you can use the lowest quote as a bit of a bargaining tool to see whether any of the builders will reduce their offer any further.

4) Get a better mortgage
Mortgage rates have dropped dramatically over the last few months meaning that now is a good time to think about switching lenders to see if you can get a better deal. And if you have some equity in your home you could think about borrowing a bit extra to do those home improvements or pay off expensive loans to get your finances in order.
You can apply online with MortgageLine for a Free Mortgage Review.

5) Spring cleanout?
Getting rid of clutter can really make your house feel more spacious. Keep furniture to a minimum and get rid of things that you do not need. The thing to remember is that it need not cost a fortune to improve your home and you can add some real value to your property at the same time. Good luck with the Spring cleaning!

Stephen Hamilton / http://www.mortgageline.ie/

For great value Mortgages, Life Assurance, Home Insurance, Redundancy Cover and Travel Insurance log on to http://www.mortgageline.ie/