Types of mortgages and lending rules

Irish law has specialized sets of lending rules depending on the type of mortgage application. Types of applications are split into three different categories: first-time buyers, remortgaging or switching, and buy-to-let buyers. Depending on which of these categories an application falls under, different loan-to-value (LTV) and loan-to-income (LTI) limits will be used. The former refers to the minimum deposit a borrower must have on a home before getting a mortgage loan. The latter refers to the maximum amount of money borrowers can receive in relation to their yearly gross income; while this is normally capped at 3.5 times one’s income, lenders can provide additional allowances of varying amount depending on the type of application.

Firstly, there are first-time buyers. These applicants are those buying a house for the first time, so the deposit required by LTV limits is understandably less steep. They will need to have a minimum deposit of 10% of the home’s total value. For example, if the price of a home is listed as €250,000, a 10% deposit would amount to €25,000. Lenders are allowed to have …

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The legacy of the “Double Irish” loophole

The “Double Irish” was one of the most notorious tax loopholes, used by large firms for decades since the 1990s. It was base erosion and profit shifting (BEPS) method used by many notable entities, including but not limited to Apple, Google, Microsoft, and more. Though closed in 2014, the loophole remained open to firms already using it until 2020. Even since its closure, there are concerns that firms that had used it previously will just shift to using different methods. Overall, this and similar methods used have had a substantial impact on Ireland’s financial system and records, something that is still being addressed today.

The Double Irish was conducted via the following steps. First, a U.S. corporate entity would develop a product or software for a price, and then sell it to a wholly owned subsidiary in Bermuda. Next, the company in Bermuda would revalue it as an intangible asset of a far greater price, as Bermuda is tax free. The Bermuda subsidiary would then license it to another subsidiary in Ireland for the same price. Important to note is …

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The fastest way to get a mortgage

What is the fastest way to get a mortgage in Ireland today? To those unfamiliar and/or engaging with the process for the first time, it can seem drawn out and overly complicated. However, it doesn’t have to be that way. While different people will likely want to use different approaches, but there are some general rules that everyone can follow to ensure their application goes as smoothly as possible.

The first thing one should do is make sure their financial situation is otherwise well and accounted for. In addition to employment and income, this can include things like home insurance and valuation of the property. One should also consider how long they’ve lived in Ireland; depending on the lender, this may be important in their consideration of an application. Borrowers should furthermore ensure that they have good credit and are not too heavily in debt. Lenders are likely to be more apprehensive regarding borrowers with unstable financial backgrounds, as they seem less likely to be able to ultimately repay their loans.

The next things one should keep in mind are …

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KBC latest in Irish bank exodus

Belgian-based KBC has become the latest lender to announce its intent to leave the Irish market. The announcement came on the morning of Friday, April 16, and is part of a broader exodus of retail banks from the country. Just weeks prior, NatWest, the UK-based owner of Ulster Bank, stated that it would scale back its operations in Ireland considerably over the course of the next year. KBC is also in talks with Bank of Ireland to sell its existing loans and deposits.

Why have banks been so keen on exiting the Irish loan market? In the case of Ulster Bank, it had been struggling to make returns on investment deemed acceptable by NatWest. KBC’s chief executive, Johan Thijs, stated that talks with Bank of Ireland were being conducted in light of “…the challenging operational context for European banks…” One potential explanation for this trend is the relatively low interest rate environment of Ireland making it difficult for banks to see adequate returns. Further, the market saw a general trend downward from 2015 to 2020, with an average industry …

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Will working at home be a norm to stay?

No one would have imagined that society would be able to shift the majority of jobs to working virtual and at home. But with the COVID pandemic, exactly that has happened. But not everyone is happy with this change. Many individuals find working at home not as efficient, but many more people are looking forwards to keep on living this lifestyle even after quarantine ends.

This means that businesses and the government may just have to find a way to establish a more legitimate framework to keep this process, rather than think of this situation as a temporary response to the global pandemic. But this begs the questions: will employers really allow employees to be able to work remotely on a permanent basis? And if that is the case then who will be paying for the costs of working?

Recently the government passed legislation on working at home which legislated the “right” to be able to request to work from home from your employers. This does not mean that all jobs and occupations will have this benefit, nor does the …

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Financial steps you can take in quarantine

As quarantine drags on into 2021, and there is no certainty when restrictions will start to lift as the COVID vaccines roll out, there are still many actions you can take just to less your bills and spending a little. With how volatile the market and economy is currently, as countries scramble to create and distribute the vaccine. You can create just a little bit of order in your everyday lives by seeing if any of these tips will help your financial situation.

1: Check up on your insurances

If you are one of nearly two million citizens in Ireland that are about to enter your renewal period for your private health insurance, this tip is just for you. Of that two million people, around 75% just allow their policies to be renewed without looking over the fine print or asking their provider any questions. And if you have been doing exactly that for over the last three years, you can almost certainly save some money by looking at alternative options currently. It will require a bit of research and …

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How will Vaccines demand and supply affect our global financial stability?

The IMF has released reports on how the increasing demand for COVID vaccines and lagging behind supply may lead to some financial instability. Shortages in the vaccine could lead to lower-income countries to drag on economic recoveries as they are unable to obtain the necessary amount of vaccines. The IMF states that they believe having an inequitable distribution of the vaccine’s risks creating financial vulnerabilities in economies that are unable to match the demand for the vaccine.

This contributes to how emerging market assets have inflated the first weeks of the year, and that there will be a risk of the infections increasing number and size in emerging markets as the vaccines are not distributed as quickly as planned. Emerging markets are also vulnerable in the sense that there has been a shift in the appetite for global risk. Investors currently are very “risk hungry” and that may post threats to these economies if there is not a period of “risk satisfied” by said investors. These markets have increased 8% since the start of 2021 in cost, in addition to …

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Ways to potentially reduce your tax bill

If you are one of the 706,000 individuals who are due a refund, as announced from the Revenue last week about your taxes, you probably went out and bought yourself a nice glass of wine. But if you’re in the other boat with the 633,000 other people who received the bad news, you’re probably hoping for a miracle to wipe away the tax liability that you now owe.

And to everyone who has been affected by the wage subsidies that the pandemic brought about, there are still ways you can look to in order to lessen the bill just a little. And as a reminder, if you have not claimed either of the two below since 2017, you can still be eligible for the past four years.

1: Flat Rate Expenses

This would be a huge win if you’re eligible and you have yet to claim it this year or in the last four years. These expenses were brought about into the market many years ago in order to be able to cover the many expenses that employees will incur …

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Europe economy may be the slowest to recover

It has been projected by the International Monetary Fund (IMF) that the US and China governments will experience a faster economic recovery time than the other parts of the world. It is predicted that the US and Chinese economies will have fully recovered by 2022 and will have no more than a 1.5% gap from the economic standpoints that would have been projected before the pandemic. Other first-world countries and richer countries will still be short by around 2.5% compared to their pre-pandemic path. While other emerging world economies will be short by around 8%, which is substantially larger than previously anticipated.

The reasons that China and the US are experiencing such short losses during the pandemic is due to the fact that simply they are the largest economies in the world, allowing for a sharp spread in industries and allowing their economies to be highly divergent. China compared to the US, however, is expected to recover even quicker due to the aggressive containment measures taken by the government to limit the spread of the virus. The US, on the …

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Vaccination Debates at the World Economic Forum

During day two of the World Economic Forum at Davos this past Tuesday, European Commission president Ursula con der Leyen announced the agenda and push towards social media and Tech Giants to publicly release their business models and their algorithms. She wishes for more visibility into these large corporations and their platforms due to the fact that certain decisions and trends on social media need explaining.

Leyen’s uses the incident of former President Trump’s account to be removed from Twitter as an example of how companies are free to act at; will and this incident was a serious violation of an individual’s freedom of expression. She wishes for companies to release their framework of laws for such decisions.

In the World Economic Forum, South Africa’s president Cyril Ramaphosa also urges richer countries to prohibit hoarding vaccines, due to the risks of prolonging the pandemic in other poorer countries. Many African countries are being left behind in the international race of producing and purchasing COVID vaccines. There is deep concern in my third-world countries that richer countries will abuse their economic …

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