Irish Mortgage Brokers on Today FM

We were asked to speak with Gavin Reilly on TodayFM’s ‘The Last Word’ where he was sitting in for Matt Cooper, to discuss a new piece of proposed legislation.

While we believe that all people are deserved of compassion and respect when it comes to financial difficulties with their family home, that it would be an error to expect the judiciary to somehow step in and make what are effectively family protection and social protection decisions on something that should be viewed via the contract.

Mortgages arrears are also more of a symptom than the inherent disease, the disease is low employment, job loss, a lack of low income housing, social housing and social supports. It would be an error to misdiagnose this and in short, only an academic or a politician could look at this problem and see the solution in the way that this proposed legislation outlines it.

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Newstalk Breakfast interview Irish Mortgage Brokers

We were pleased to be part of an interview by Newstalk featuring Karl Deeter of Irish Mortgage Brokers and Ross Maguire (SC) of New Beginnings.

The conversation was around the newly published Competition & Consumer Protection Commission (CCPC) consultation on the Irish Mortgage Market.

Our general view (tl;dr) is that competition alone cannot explain the issues inherent in the Irish mortgage market, that there are many other forces at play.

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The state can’t help you get a write-down (if you need a mortgage)

We had an interesting call today because a prospective client wanted to know about Home Choice Loan which is a state sponsored lender.

Her situation was interesting, she is in the process of negotiating a write-down from Tanager via the servicing agent Lapithus and wanted to know if there was any lender out there that might do the deal.

According to the Home Choice Loan website (and a fair critique is that they have done very little in the way of lending to anybody) they are there for first time buyers but ‘some exceptions may apply’. When queried we were told they wouldn’t consider a case for a refinance away from another lender.

What if that involves a good write-down? Currently no lender is willing to finance a deal like this so only people with access to cash can get the deal done, but in a world of low yields if the state was to consider loans like this and do them at their published rate of 3.25% then the nation could make a return on the money …

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Central Bank whistle-blower line unmanned

We were asked to comment on a finding by Charlie Weston in the Independent about the fact that the private disclosure (or ‘whistle-blower’) lines in the Central Bank don’t work. After the newspaper highlighted this they took action, but we were not impressed that this was only found out through the work of a journalist.

The comment we offered was very clear (below).

Compliance officer with Irish Mortgage Brokers Karl Deeter said it was not good enough that the whistleblower phone line was not being answered and emails not getting a response. “Imagine if you called 999 to report a crime and no-one answered. What would you think of our police service?”

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First experience with ‘Help to Buy’

We are currently undergoing our first experience with a client who wants to use ‘Help to Buy’ and the same issue has arisen at two different banks so we are comfortable that it is probably a teething issue that is live and current.

The problem is that the banks are telling us they need proof the person will qualify for the HTB scheme, but to qualify you have to have a signed contract, no borrower is going to sign a contract unless the bank will advance the loan factoring in the HTB because otherwise they may not be able to complete the loan.

The lenders had forewarned us that there would be problems, but this one seems very basic. They could just make the offer contingent on the person qualifying for the scheme. Otherwise it will mean that people are stuck waiting for the contractors name to show up on what is so far a very short list, and they are also putting the kart before the horse in terms of how it was meant to operate.

For now all …

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First time buyers who don’t buy new homes

First time buyers have been asking ‘what about those of us who are not buying a new home? Why don’t we get any help like the people using help to buy?’. The answer is that you do, at least for the remainder of 2017.

There is still a DIRT relief for first time buyers scheme in action, it started in 2014 and is ongoing until the 31st of December.

The scheme doesn’t help you get a deposit, rather it’s a refund after you buy, see the notes below taken from the Revenue.ie website:

Section 266A of the Taxes Consolidation Act 1997 provides for refunds of Deposit Interest Retention Tax (DIRT) for first-time buyers who purchase a house or apartment to live in as their home. It also applies to first time buyers who self-build a home to live in.

Who can claim it?

A first-time buyer of a house or apartment who purchases or self-builds a property between 14 October 2014 and 31 December 2017 may be entitled to claim a refund of DIRT.

The first-time buyer must not have …

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Making sense of ‘help to buy’

Yesterday Revenue announced the details of the new ‘help to buy’ scheme. It is designed to make buying a home more realistic for first time buyers and to increase the supply of new homes. Whether it’s a good or bad idea is beside the point, what most people want to know is how it works so here’s the breakdown.

It’s a scheme to allow first time buyers buying a new home to get a rebate of up to 5% of the purchase price or contract price (whichever is the lower) from income tax and DIRT tax paid in the past four tax years to a maximum of €20,000. The property must cost less than €500,000 or 600k for retrospective applications, the size of the loan versus the value of the property must also be 70% or more.

So, for every €100,000 of value you must be borrowing at least €70,000 the idea being that very cash rich buyers don’t need this help. It started on the 19th of July 2016 and goes until the 31 Dec 2019.

Now that it’s …

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Understanding Personal Contract Plan or ‘PCP’

A lot of people come to us for general financial advice and something we are asked about more regularly are PCP contracts. This is where you make a down-payment on a car and then make monthly payments.

The basic workings are that you are paying for the depreciation and not ‘the car’ as some people think. You give an estimate of your annual mileage and in return you get a ‘MGFV’ or ‘minimum guaranteed future value’. If you go over the miles it negatively impacts the value.

This is then the price you have to pay to own the car. You aren’t covered by the Consumer Credit Agreement legislation because you are not ‘buying’ anything when you do this.

What is interesting is that people don’t usually think about how this works in the future, when the time comes you’ll notice that you usually can’t sell the car for the ‘value’ you are told it has and if you did buy it and go to sell it to a garage or a private seller you won’t normally get anywhere near …

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TodayFM: The last Word features Irish Mortgage Brokers

Matt Cooper had Irish Mortgage Brokers on ‘The Last Word’ to discuss some changes announced by Simon Coveney regarding rent controls in Dublin and Cork.

The piece focused on some of the issues at hand with a commentator from the Dublin Tenants Association also taking part.

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