Podcast: How to get cheap insurance with Darragh Farrell, episode 00003

In this podcast we briefly looked at how to get cheap insurance. The amount of people who overpay for insurance is high in our opinion, and while it’s great that some folks seem to want to do all they can to make insurance companies profitable, we don’t agree with that so we spoke about ways to chop your bill down while keeping the same cover.

Darragh Farrell has been with us for almost a decade and has been a financial advisor for far longer, he holds his QFA and is also the person who heads up our sister site yes.ie which is purely about financial services.

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Podcast: Who lends the most to those with the least? Barry Clarke discusses in episode 00002

A thing that people usually miss out on when they don’t deal with a broker is the ‘unwritten’ criteria of banks or the market segmentation they seek. Anybody with a lot of money can get a loan almost anywhere, but if you aren’t in the Howard Hughes end of the market then you can find yourself refused by one lender and welcome by another but have no idea why.

In this episode Barry Clarke talks about why one lender in particular (and this is going to change soon) is doing the most for people who have the least.

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Podcast: Mistakes that first time buyers make with Joanne Daly, episode 00001

Joanne Daly has been a broker for 13 years and in this piece she speaks to Karl Deeter about the errors that first time buyers make prior to making their mortgage application, thankfully most of what she mentions is easily rectified!

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Can one person in a married couple take out a mortgage?

This is a question we regularly get, and it’s a tricky answer because it’s both ‘yes’ and ‘no’. If the property is a homeloan the answer is ‘no’, if it’s a buy to let then the answer is ‘yes’.

Perhaps you are wondering why this might be a question? Normally it’s because one of the couple have an issue that would adversely affect the mortgage application, such as a spouse who has a bad credit rating, or they might have other debts (like cars or personal loans).

Another thing that we see is the likes of Stamp 4 status or a persons legal status being an issue so in this case you might see them factored in when it comes to the running costs estimated but the lender will not factor in any of their income, this then puts very negative pressure on the application.

Can it be done? Not without committing a version of mortgage fraud. Regulated entities are required to disclose all facts to the bank when making a credit application on behalf of a customer (CP10 declaration), …

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One of us isn’t a first time buyer, so can we get 90%?

Something that comes up with regular frequency is a question about ‘being a first time buyer’. The simple version is ‘one of us bought a house in (year XXXX) or had a house in the UK or invested in one with a friend’ etc. Now that person is in a relationship with a new person and they want to know if as a couple, they are a first time buyer.

The answer? No.

Sadly, this is similar to the way that Tax Relief at Source used to work, if you had bought a house anywhere in the world, including Timbuktu, you are no longer a first time buyer and by extension, neither is anybody that you buy a house with.

The fix? Sometimes the one person who is a first time buyer can qualify for the loan and they are able to do it themselves, years ago the answer was ‘two on mortgage one on the deed’ in order to be able to obtain Tax Relief at Source (which is now gone for all loans)

Nowadays you see only that …

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Two identical first time buyers walk into a bar, one qualifies, the other doesn’t

The Central Bank rules on curtailing mortgage lending have had an interesting effect, first is that we are seeing more loans draw down that might not have because people are bringing forward consumption due to the fact they won’t qualify for the same amount again in the future. This is literally the opposite of the intended effect.

Second is that it’s causing chaos for prospective buyers who may hold an exemption or need an exemption because there are quarterly reporting rules that mean banks can’t offer a new loan until they know if an old one will be drawn or become an NTU (not taken up).

Perhaps the easiest thing to do is explain it, currently you can’t get an exemption from Ulsterbank or AIB/EBS/Haven or BOI, but you can from PTsb and KBC. The banks that can’t give you one (and remember it’s only one of LTV or LTI not both) are hogtied because they have given the limit of exemptions (c. 15%-20% of lending) already in loan offers and they have to estimate both the annual and quarterly …

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Fixed rate comparison Ireland

When it comes to fixed mortgage rates in Ireland there is a little confusion, the first being about ‘whether to fix or not’ and secondly, if by doing so will you lose out should Irish lenders choose to lower their mortgage rates.

The simple answer is that if you fix your mortgage you may win or lose depending on what rates do, but that is missing the point of why you fix to begin with. It provides you with certainty of payments and often there is a premium due because of this, in simple terms, you pay a bit more for the ‘fixed’ assurance.

Below is a list of some of the best fixed rates in Ireland as well as who offers them.

Best 3yr fixed rate: 3.6% offered by PTsb and Bank of Ireland

(note: you can get better again by going with KBC and opening an account which gets you 3.55%)

Best 5yr fixed rate: 3.8% offered by Ulsterbank, BOI and Haven/AIB

These are ‘tiered variable rates’ meanining you have to have a low loan to value or …

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How much deposit do I need to buy a house?

This is a really common question, people are still unsure about how much they have to have in order to get a loan. While it is simple enough in terms of the rules, what is tricky is that keeping track on exceptions becomes difficult in a ‘live mortgage loan’ situation because some may draw down and others don’t.

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Loan to Value ratio – a video which explains what you need to know about it

The ‘loan to value’ ratio is a key concept in mortgage lending, it is also extremely simple which makes the concept very easy to understand and calculate. What is a little more complex is ‘why’ it matters and what the view of a lender is when it come to the risk associated with the loan to value. This video is just over a minute long and explains what you need to know.

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Central Bank report on Switching mortgages

That so many people can switch their mortgage and don’t was always something that puzzled us as professional advisors.

(dowload the report here)

They found many of the things we intuitively knew but put numbers on it, issues such as inertia, complexity of product, and other issues like naive procrastination.

The numbers are not small either, savings of over €10,000 are being passed by and Irish consumers seem to be willingly paying about €65,000,000 more than they should to the lenders simply by not being more pro-active with their own finances.

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