How much of a deposit do I need?

When making a mortgage application this is a question that many first time buyers want to know, how much money do I must I have for a deposit? Well, that kind of depends on which bank provides the mortgage finance!

Lending criteria is different for every bank/building society/lender, this goes for rates, the general underwriting criteria as well as the ‘loan to value‘, the deposit you need is 100% minus the Maximum LTV and that will give you the deposit amount you require. For instance, ICS have a maximum LTV of 92% so the deposit you need – if you are obtaining finance through them – is 100% – 92% = 8%.

What is interesting in that example is that when you go ‘sale agreed’ on a property the estate agent will ask for a security deposit and the balance of 10% at the signing of contracts, this is an example …

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Hedgefunds, risk, and finding the silver lining of any dark cloud.

Here is a simple question: ‘how do you protect or even augment your portfolio returns when markets are crashing or where there is systemic risk?’ if you have an answer then you can be a little smug because the majority of fund managers, the best and brightest the world of finance has to offer, for the most part didn’t have an answer during the last two years and if they did they didn’t (by and large) act upon it.

The classic definition of a hedgefund is not the ponzi-schemes run by the likes of Bernie Madoff, rather it was a fund that strategically goes long and short to produce positive gains regardless of whether the market goes up or down, that was what Winslow Jones was doing when he started the first hedge fund in 1949, while managed fund managers are happy to post a 20% loss when the averaage is -30% (for instance), hedgefund managers are meant to be able to …

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WE HAVE MOVED! To 33 Pearse Street.

We have moved our offices to a new location (still on Pearse Street) to 33 Pearse Street.  It’s about 250 metres towards the city centre from our old offices, and three doors down from O’Neills pub (everybody in Ireland seems to use pubs as landmarks!).

The new office decision came when our lease on our old office came up for review, we felt that there were deals to be had on the market and it didn’t make any sense to stay put, if you drive down Pearse Street aiming to go to the north side then you’ll have to pass our offices, its the place painted red and yellow.

Other than our location everything else has stayed the same (our broadband is temporarily down), you can email us at our regular email addresses and our phone number is still 01 679 0990. Individual broker direct dial phone numbers have changed but we’ll publish them soon on our website and make sure that everybody gets an email.

The blog will be back up to full speed as of next week and …

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New world currency, Euro hegemony in the future?

A commentator talks about the euro, dismissing euroskeptics and euro bashers, arguing that it will be (perhaps) the new world currency? Could be possible, but first we have to work our way through the Eastern economy issues (in the West Ireland is the way down), but that is likely to happen, and the euro will survive and prosper. The ECB can be bashed for not acting quickly enough etc. but the reality is that we shouldn’t face the problems down the road that the US and UK will face, Euro bonds are not failing at least [yet]. A prominent economist I had lunch with said he felt our drop in GDP would be closer to 12% than 10%, the same guy told me last September that rates would be 1% by Summer 09′ and I laughed at him! Let’s hope get is fallable at least some of the time.

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A Repossession Guide for Irish Homeowners

We have written ‘A Repossession Guide for Irish Homeowners’ which you can download by clicking on the picture to the left.

The guide is there give people an understanding of the arrears & repossession process, and what you can do to help yourself.

We hope you find this useful, if there are other things that you feel should be included then leave a comment to that effect so that we can develop and improve this tool for people in difficulty.

This is part of an industry-oriented solutions based approach, we don’t intend to ever sell this document or control distribution of it, reproduce it, forward it, print it out and give it to somebody you know who might be in difficulty, our sole hope is that this may bring some degree of help to those most in need of it.

Sincerly, Karl Deeter, Irish Mortgage Brokers.

[This document is a pdf you will need to have adobe reader installed to view it, you can get Adobe Reader by clicking on the image …

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Financial road maps

Having a plan is important in many areas of life, I would feel it is vital in personal finance, yet a surprising amount of people totally fail on this matter and go through life in an ad hoc manner and they are often wondering why some people seem to do better even though they don’t earn as much as they do. Animals in the forest don’t worry about finance, they do worry about food though, hence they gather for winter, squirrels have figured this out so it is disappointing, given the superiority of human intellect, that many private individuals have not planned for an ‘economic’ winter.

A simple method is a budget, it can be complex or it can be crude but in either case having a crude one is better than having none. Sometimes this is worked out using percentages, for instance:

After tax income x 60% = all expenses (mortgages, bills, food, entertainment etc.)

After tax income x 10% = discretionary expenses (something you may have buy from time to time)

After tax …

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Euribor, the distant cousin of the ECB base rate

We have written in the past about tracker mortgages becoming an endangered species. It seems that now we are witnessing the demise of them, the interbank rates and the ECB have become so disparate to each other that one is no longer an accurate gauge of the other. What does that mean?

The ECB is the rate set by the European Central Bank, and it is the ‘base rate’ (currently 4.25%), but banks can’t generally borrow at that price and instead they buy on the ‘interbank‘ market, this is the largest market in the world in which over 1.9 Trillion is traded every single day! It is how banks access the ‘Euribor‘ market (European interbank offered rate). This is basically run as an auction and because liquidity is an issue we have seen the prices of the Euribor rise and rise, demand is outstripping supply.

Why is the Euribor rising? Simply put, fractional banking means that banks must have a constant inflow of money …

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Why Brokers will prosper and why one reporter is full of ‘Dan White’

Recently banks have been increasing the rates they charge clients and stating that they will (for the near future) concentrate on their existing clients in order to generate income for their shareholders. They have also (in tranches) cut brokers commissions, many opting to for a punishing 50% reduction (not so nice when you are on the receiving end may I add!). So now banks will make a higher margin on the money they lend, and juice the deal even more because now they don’t have to pay brokers as much, and brokers place over half of the residential homeloans in Ireland.

Some lenders have gone so far as to leave the mortgage intermediary market. The papers are touting that ‘Brokerage is an endangered species’, that we will face the same fate as travel agents. I would say that this couldn’t be farther from the truth and in today’s post we will look at the proposition of the direct model versus brokerage and why brokers will not only thrive but they will also increase market share whilst doing so.

Brokers for …

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Why Brokers will prosper and why one reporter is full of 'Dan White'

Recently banks have been increasing the rates they charge clients and stating that they will (for the near future) concentrate on their existing clients in order to generate income for their shareholders. They have also (in tranches) cut brokers commissions, many opting to for a punishing 50% reduction (not so nice when you are on the receiving end may I add!). So now banks will make a higher margin on the money they lend, and juice the deal even more because now they don’t have to pay brokers as much, and brokers place over half of the residential homeloans in Ireland.

Some lenders have gone so far as to leave the mortgage intermediary market. The papers are touting that ‘Brokerage is an endangered species’, that we will face the same fate as travel agents. I would say that this couldn’t be farther from the truth and in today’s post we will look at the proposition of the direct model versus brokerage and why brokers will not only thrive but they will also increase market share whilst doing so.

Brokers for …

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