A tale of two commissions.

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.

Some of you may recognise this line from ‘A Tale of Two Cities’ by Charles Dickens, however, I am not a classical scholar, instead it sums up my monetary sentiments for 2008. On one hand we are seeing property prices [the very foundation of the majority of Irish wealth] wither away, as global conditions worse, especially in the USA where house prices are now falling quicker than they did during the Great Depression.

There has been more than a few articles in this blog about the current issues in the broker market, the description I would use to describe it at the moment tends to modulate between ‘ugly’ and …

Read More

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 …

Read More

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 …

Read More

100% Mortgages, how to get a 100% mortgage

100% Mortgages became quite popular in Ireland recently and up until the credit crunch they were proving to be the answer for many young buyers, the reason for requiring a 100% mortgage is normally because a person has been renting and paying off college debt etc. and for that reason they were not able to save up a deposit of 8-10% or more. Given that Irish property prices (at least in Dublin) were – and still are – above c. €350,000 it means you would have to save up the guts of €35,000, no easy feat even if you didn’t have college debt and lived at home.

The issue currently though is that the Irish property market is in a declining phase, so lenders have pulled back for the most part from 100% mortgages for the simple reason that they could be in a situation of inverse equity. When you get a mortgage normally you have at least some stake in the transaction, a down-payment or deposit and that portion ensures that you are committed to the transaction, call it …

Read More