Switch and Save

Avant Money estimate that over €25bn of mortgages are on an interest rate higher than they need to pay.

With the cost of living at an all time high, could a 5 minute discussion with a broker save you money in the months and years ahead. It could be the best 5 minute chat you have ever had!

Switching your Mortgage from one provider to another is simple, your Broker will do the research for you and let you know if you will SAVE money.

Some lenders are offering a cashback incentive to help cover the costs with switching, this is a great benefit and something people should look out for. It’s not always right for everyone but certainly worth speaking about.

If you are looking for a financial health check, please drop me an email today or pick up the phone for a no obligation chat –  james.curd(at)mortgagebrokers.ie or 01 633 9248.

 

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Should I switch my Mortgage?

Should I switch my Mortgage? It’s a good question that many borrowers have been asking over the last year and a question that will become a lot more frequent as we head into 2024. Many people have secured themselves a great Mortgage rate over the past 5 years and will soon be looking at what their repayments will be after the ECB rate increases over the last 2 years.

 

Rates have been driven up by the lenders in response to the ECB rises and Mortgage holders will, unfortunately, see the impact of this when their current fixed period comes to an end, which is why it is well worth having a chat with a Broker to see if there is something better for you.

 

Some lenders have fantastic cashback products that can help with many things such as the Legal costs, or the increased monthly costs you are likely to incur. Some Lenders will have lower rates than you are currently paying, why would you pay more at your current lender?

 

In summary, the answer to my …

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First Time Buyers

First Time Buyers guide

 

As a First Time Buyer, the idea of purchasing a new home can be a daunting prospect and you will be asking yourself numerous questions. How much can I (we) borrow? How much of a deposit will I need? Where should my deposit come from?

These are some of the questions we are here to answer, our goal is to give you the knowledge and peace of mind that you have a Broker who will guide you through the process and keep you informed every step of the way, right up until you have your keys.

As a First Time Buyer, lenders will Mortgage up to 90% of the property value and allow you to borrow up to 4x your income. For example if you were to purchase a property for 300k you could borrow up to 270k from a lender. You would then need an income of 67,500 per annum to qualify for this amount, if you are applying as joint applicants this is a salary of 33,750 per annum each, however the split does …

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Are Irish banks the most generous in Europe?

Mortgage rates are rising, but at the time of writing they are higher in Germany than in Ireland, that isn’t the strange bit though.

What’s really strange is that the risk free rate in Ireland is higher than the mortgage rates available. In other words, financially speaking it is safer (if by ‘safe’ you mean accepting a lower return) to lend to a person in Ireland on a house than it is to lend to the Irish government. This is insane and it won’t last.

The response will need to be one of two things.

Banks stop lending Banks raise mortgage rates (or perhaps a little of 1 and a good dash of 2).

Take a look at government bond yields from last week, if a bank has a choice they can lend to the Irish government at 2.8% but they lend to people at closer to 2%. This is typically seen as an impossibility in financial markets so it will only last for a short time because as a rule there is no arbitrage, markets close them down …

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Negative interest rates are both gone and here at the same time.

Many commentators are talking about the end of negative interest rates in nominal terms and it’s true, interest rates are rising but in real terms they are still negative. Look at mortgage rates (for instance), you can borrow at 3% and below and meanwhile you have property price appreciation at 15% meaning that in real terms you are paying -12%.

If you can ever get something on a continuous basis at -12% that indicates ‘buy’, and that’s what people are doing, but notice that we mentioned ‘continuous’, the reality is that there is no arbitrage most of the time and this will be closed down by either rising costs, falling prices or some other outcome that we can’t forsee. Trees don’t grow to the sky, they never have and never will so the trajectory of house prices must rationalise but it’s hard to see how or where at present because the demand side seems so demonstrably strong.

I bumped into Kieran McQuinn on Pearse Street today and in our brief chat mentioned how the price changes are not sustainable, he …

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Irish Mortgage Brokers featured in the Irish Times

We were mentioned in the Irish Times in a piece by Cliff Taylor about the increase in the number of people seeking to refinance their home.

Rather than a fear of higher interest rates, Karl Deeter, of Irish Mortgage Brokers, believes it is primarily driven by people facing tightening (link to article here)

The crux of the point being made is that as inflation is affecting people and rates look set to rise that it is naturally driving people to consider ways to get better prices on one of their biggest outgoings and to get some assurance on what the price levels of their outgoings will be.

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How to get the lowest rate on your mortgage

When applying for a mortgage, you will notice that rates vary greatly. These rates determine on a number of things, including the length of your mortgage term, the size of your deposit, your credit score, and which lender you choose. With so many different mortgage lenders available to choose from, this can be a daunting process, especially for first time buyers. Securing the lowest rate is incredibly important, as it will make your monthly payments smaller, thus saving you money over the whole lifetime of the loan. Here are a few things to focus on during your application process to ensure you get the lowest rate possible.

Shop Around

You wouldn’t buy a car without driving a few first, or a mattress without laying down on more than one, right? In a similar way, if you want the best mortgage rate, you should shop around with different lenders. This process should entail researching different lenders and the products they have to offer, as every lender has different loan types, terms, and interest rates. You also should apply for more than …

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Who are Finance Ireland?

We are sometimes asked ‘who are finance Ireland’ because people don’t know the company. In short, they are a broker only lender, this is yet another reason you should never go to a bank directly, they couldn’t tell you about their rates and products if they wanted to and in this instance their prices are amongst the best there is!

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The 8 Types of Mortgages

Mortgages can be scary for first time buyers. It may help to understand the different types of mortgages when you apply for a mortgage. Here are the 8 most common types of mortgages:

Repayment Mortgage – This is the most typical mortgage. You pay back the principle you borrowed along with the interest applied in fixed (typically monthly) installments. Fixed Rate Mortgage – This means the interest rate that the bank gives you is fixed for a specified period of time. It is a safe mortgage because the monthly payments do not change over time. Standard Variable Rate (SVR) Mortgage – The rate is changed by the banks typically to reflect how the economy is doing. This rate typically follows the LIBOR or Federal Funds Rate set by the central banks. Interest-Only Mortgage – This mortgage pays off the interest before principle. After the interest is paid off, the borrower starts to pay off the principle amount he or she borrowed. Federal Housing Administration (FHA) Loan – These loans protect people who may not be able to pay back their …

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Late loan payments continue to rise

The Central Bank of Ireland reports that the total amount of mortgages that are now classified as long-term arrears have hit record highs, topping the charts at almost 6 billion euro. There are many types of properties that can and have become part of this number, but the largest group tends to be that of more residential properties.

In the previous quarter, mortgages in arrears were down significantly. Sadly, the largest category in mortgages in arrears, residential properties that are two years or above in late payments, is still increasing. The buy-to-let sector has been the largest subcategory of residential properties in arrears; 17.62% of the total is in arrears.

In April 2019, only 118 of all applications of mortgages for buy-to-let properties were approved while in April 2018 154 mortgages were approved. There was a 30% decrease within the same months separated by only one year, according to the Banking and Payments Federation Ireland (BPFI).

This huge scale down may be due to Brexit, or perhaps the seeming unreliability of buy-to-let properties ability to bring in …

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