Advantages and Disadvantages of a long-term mortgage

In a major market innovation in the Irish Mortgage Market, Finance Ireland and Avant Money have introduced new long term mortgages. While longer term mortgages have never really took off in Ireland, they are very popular in other parts of Europe and worldwide. These mortgages can be attractive to borrowers for a number of reasons, but it is important to also consider the potential downsides before making the switch.

Pros

One of the biggest advantages provided by long term mortgage products is certainty. Unlike a two or three year fixed term, a 10 or 20 year mortgage will allow your monthly mortgage repayments to remain unchanged throughout the duration of the loan. This reliable and predictable payment can be very helpful when planning out your monthly and yearly personal finances. It also can be very helpful in determining what your home will cost after factoring in interest. With a long term fixed rate, you will be able to know exactly how much the home will cost you right away, while a shorter term fixed rate will change over the lifetime …

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Tips on switching your mortgage

Switching your mortgage could be the best decision that you make. It can possibly help you save a large amount of money if done correctly. If you are not sure how to go about this, here are a few tips of what to look for and what to think about.

Think about how much you could save. In order for you to save, you need to make sure that you are shopping around for the best deal. When shopping around, it is similar to what you should have done for your mortgage. Talk to different mortgage brokers and banks. See what they have to say about switching and is it worth it for you?

What type of mortgage do you have? An annuity mortgage, interest only mortgage, pension mortgage, or endowment mortgage? This can also make a difference when thinking of switching. You will also want to know what your current interest rate is. Get in touch with your current bank to find out what your rate is if you are not sure what it is.

If you have a …

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Switching your mortgage can benefit you in the long run

Switching your mortgage can be a hassle but is it worth it?

Yes. Switching your mortgage can save you tens of thousands, it soon may be less of a hassle as well.

The Competition & Consumer Protection Commission (CCPC) is realizing the benefits of switching and are looking of ways to take the hassle off the consumer. They currently are researching on how to make the process easier. They are taking focus groups from Dublin, Cork and Galway currently.

Of the research, the main drawbacks to people who switched were the amounts of paperwork, complicated, and too much time. Of those 35 percent estimated it took between one to two months while 24 percent said it took longer than two months. The CCPC proposed to start e-conveyancing with the Legal Services Regulatory Authority. It also proposed a start of automated switching process with the CBI and …

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What is Negative Equity?

The easiest way to describe this is to first decribe what equity is. Equity in a property is the difference between the value of the property and the mortgage one it. If you owned a house that is valued at €300,000 and the mortgage on it is €187,000 then you have equity of 37.6%. or a Loan to Value of 62.4% (add your equity to your LTV and it will be 100%).

So now that we understand equity as being the value versus the mortgage where the value is greater then you just apply the inverse to understand negative equity. Negative equity is where the value of the property is less than the mortgage on a property. Lets take the same example, except we’ll swap around value and mortgage amount. If you had a property with a mortgage on it of €300,000 and the value was €187,000 then you are in negative equity to the tune of €113,000. What does negative equity do to you?

It means that you probably can’t sell your property, …

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