McWilliams Ireland: Are we in a property bubble? (2nd November 2017)

David McWilliams’s show ‘Ireland’ looked at the issue of property prices here and asked if we are in a ‘bubble’. He spoke to Karl Deeter from Irish Mortgage Brokers about this who made two points. The first was that we are too late to change the outcome of the property cycle, the second was that the biggest land hoarders in the state is the state itself and that Government should release land to flood the land market and drive down the primary costs of construction.

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Newstalk Lunchtime: Ciara Kelly talks to Karl Deeter about mortgage prices being high

Ciara Kelly interviewed Karl Deeter from Irish Mortgage Brokers in a very comprehensive manner regarding mortgage rates in Ireland and why they are so high. The interview covered a lot of ground, from default risks, to competition, and also why brokers are so important in the mortgage market.

It ended with a suggestion that perhaps banks can’t be entrusted to deal with mortgages in the absence of independent advice and that on that basis they should not be allowed to advertise them and that we should offer new lenders coming into the market some benefit in order to increase competition here.

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Karl Deeter Mentioned in the Press

You can find an article at this link which mentions Karl Deeter, apart of Irish Mortgage Brokers – Bank accused of ‘gouging’ loyal customers cuts its fixed rates on June 15 2017. Article by Charlie Weston in the Independent.

Permanent TSB, a state-rescued bank, has been increasingly cutting fixed rates in response to being accused of manipulating their clients. The bank has lowered it’s two-year fixed mortgages from 7.25% to 4.20% and three-year fixed mortgages from 8.75% to 4.20%. They have almost halved both of their fixed rate mortgages but the variable rate at the bank has remained the same.

The Central Bank has noticed an increase of fixed variable rates compared to variable for both new borrowers and existing ones. Therefore, banks have been reducing fixed rates to increase competition amongst other banks. This will prevent clients to switching to other banks for better deals.

The bank also extended a 2% cashback on all new mortgage drawdowns, supposed to end this month but got extended to the end of the year.

Karl Deeter was mentioned accusing the bank …

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How Do American Mortgages Work? Part 3: Mortgage Origination

The first part of the Secondary Mortgage Market is the banks, mortgage broker, or mortgage lender. This is the only time borrower will interact with the Secondary Market without possibly even knowing it. The lender will go through all the requirements with you of what you need in order to obtain the mortgage- credit score, income requirement, length of the mortgage, etc. These requirements are decided by the government identities, Fannie Mae and Freddie Mac. This allows the mortgage to be sold to the government identities if they follow their guidelines. So chances are the lending company a person obtains their mortgage from will not be the same one their making payments to for the life of the loan.

To initially make the loan they need money to close the mortgage before they sell it off to the government entities. Bankers typically use their own capital to fund the closing of the loans. Mortgage bankers use a warehouse line of credit to initially fund these loans. A mortgage broker will search to find you the best mortgage option throughout all …

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How Do American Mortgages Work? Part 1

Looking at an American mortgage from the outside can seem identical as a mortgage you would obtain in Ireland. You sign a contract, you’re given the keys to your new home in exchange for monthly payments for a set amount of years. But behind the scenes is where things get a little more complicated. The United States has created a secondary mortgage market after the Great Depression in the 1930’s. Since then, the secondary mortgage market is a multi-billion dollar corporation that has the single biggest taxpayer corporation in the US.

In simple terms, the secondary mortgage market includes Government-Sponsored Enterprises that act as the middle man between the mortgage lenders and the investors. They will buy residential loans off of lenders then securitise and trade them to investors. When the Government-Sponsored Enterprises buy a loan off a mortgage lender it returns the loan amount so the lender can turn around and lend to a new family. This allows more capital to be freed to help more families reach their goals of becoming a homeowner and invest in their future.

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Mortgage approvals

Analysing figures released by the Banking and Payments Federation, the article sends a somewhat contradictory message. On the one hand, first time buyer mortgage approval volumes increased 19% this April compared to April of 2016. However, this volume also represents a 8.4% drop from the number of mortgages approved last month in March.

The decrease in the number of first time buyer mortgages this month is not indicative of the generally increasing annual trend, and may be due to the lack of buyer discounts offered in the month of April, when there isn’t many major holidays or events. April is generally the worst time of the year to finance a house (Business Insider).

On a larger scale, the trend in approval volumes for all mortgages follows that of first time buyer mortgages, but to a less exaggerated extent. The number in April represents an increase of 11.7% compared to April of 2016, and a decrease of 11.6% compared to March of this year.

The greater increase in first time buyer mortgages as compared to all mortgages could indicate that more …

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Today FM ‘Last Word’ speaks to Irish Mortgage Brokers, 27th April 2017

Matt Cooper had several guests in to discuss the new proposal for 800 sites owned by the government to be released in order to provide new housing.

There was  Jim Bainam from the Department of Housing, Karl Deeter from Irish Mortgage Brokers and Sinn Fein TD Eoin O’Brionn.

There were differences of opinion in terms of the ‘how’ regarding the sites, in terms of ‘how they are delivered’ via housing bodies, local authorities or privately, but all of the panellists were positive about a move to increase housing supply.

The main thing to remember in our view, is that it doesn’t really matter who builds what because the local authority remain the tax authority on all housing so they can get the housing with no capital outlay and then capture the property tax in future years if a private developer does it.

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