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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An unusual mortgage approval

That banks are lending enough is evidenced in gross lending contraction, that they simply ‘aren’t lending’ is factually incorrect.

We encounter all kinds of strange paths to homeownership with our clients and thought it might be worth showing a recent example which probably never would have made it through without a broker, branch banking typically run a mile from this type of case or don’t spot the angle.

In this instance we had a permanent worker with a child and no savings. This instantly has a few negatives, having children reduces your borrowing capacity and not having savings diminishes any hope left.

With this case in particular though, there were other aspects that swayed it. The client lived with a relative who was selling a property and moving in with a sibling, some of the profits were going to go towards helping our client make a purchase.

A gift alone normally won’t help you get a loan, you have to prove repayment capacity, some lenders will let the whole deposit come from a gift but you still …

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Online Mortgage, Dublin Ireland

We are fans of technology and that is why way back in 2007 we went for a fully transparent business model which would allow our clients to track their mortgage on our system which uses the same level of security as online banking.

The current method of an online [glossary id=’6898′ slug=’mortgage’ /] application has not developed in Ireland to the extent that it could have, in part due to a collapse of lending.

We envisage that in time it will all be done online and electronically which will be good for everybody, brokers in particular as currently we end up using vast amounts of paper to replication applications to different lenders. The indexing of documents so that they can be sent securely online from one database to another is the next step.

In terms of when that will happen? Probably not for a few years yet, the systems don’t exist in banks to accept documents like this yet, a [glossary id=’6802′ slug=’broker’ /] could change easily because they have smaller less mission critical systems to work with. By that …

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Mortgage providers to restrict rural lending

We were mentioned in the Irish Independent today in a story about lenders restricting mortgage credit in rural areas. They are doing this by lowering LTV’s or coming up with requirements on population size for LTV’s (Loan to Values).

Mortgage broker Karl Deeter of Irish Mortgage Brokers said lenders were now discriminating against those seeking loans to buy property in rural areas. “If you are not buying in Dublin, Cork, Limerick or Galway cities they do not want to know. This is all part of a growing trend to discriminate against properties outside of the cities,” Mr Deeter said.

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EBS rate hikes, the benefit of mutuality?

EBS have announced a rate hike of 0.6% which is a follow on from their last 0.6% hike that was levied against variable rate mortgage holders on the 1st of May, this brings their margin increases to a total of 1.2% for the year to date.

Today’s Indo lead with this story (by Charlie Weston) and rightly pointed out that by the time this is over, a person with a €300,000 mortgage over 30 years could expect to pay just over €3,000 a year (after tax) in increased mortgage payments. For a person on the average industrial wage this is like a full months wages before tax being sucked away by the financial system. Tax hikes and wage cuts aside, this will ultimately reduce the money that is being spent in the economy and it will disappear into the financial system where banks will use it to de-lever further.

The contention for many people is that they are being punished, not for what they have done …

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Who cheats more? Politicians or bankers? With Dan Ariely

Legendary Behavioral Economist Dan Ariely presents a piece about trade off’s between instant gratification versus long term gratification, reward substitution, cheating, trust/revenge, global warming, executive pay and many other fascinating topics. This video is fascinating and for me is a real insight into the psychology behind economics that is so often over looked in classical economics. This is explained in simple terms that we can all understand and relate to, hope you enjoy!

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Synopsis of the ‘Code of Conduct on Mortgage Arrears’ February 2010

The Financial Regulator recently brought out a new code of conduct for mortgage arrears, the full length eight page document is here.

The code applies to: all of the regulated mortgage lenders in the state (this includes the sub-prime lenders), as well as all mortgage lenders operating here via other EU states (eg: Leeds Building Soc.)

It applies to consumers only, and only in respect of their principle private residence in the state. The code should be treated as an extension of the Consumer Protection Code.

Scope: The code covers finance for primary homes, lenders must adopt flexible procedures that aim to assist the borrower as far as possible. It sets out what the lenders must do in an arrears case but allows repossession where the code is not appropriate (fraud, breach of contract, abandonment). It doesn’t relieve the borrower from their duties to repay

Legal Background: S117 of the Central Bank Act 1989

Avoiding an arrears problem: Once …

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