Numbers released for Irish Mortgages

Banking and Payments Federation Ireland have released the figures from August concerning the number of approved mortgages. Of course, Covid-19 has been a very difficult time for many people, and as such, there has been a decrease of people asking for mortgages.

The statistics show that there have been 14.1% more mortgage approvals in August compared to July. This translates to 3,875 approved mortgages in August, which is 11% less than last year, although this was to be expected because of the global pandemic.

The total value of approved mortgages in August was 946 million euros which seems to suggest that the market is recovering well. It is likely that this figure reaches 1 billion euros in September, which would be a good sign for the general Irish economy, which seems to be doing fine.

Movers, as in people who had previously owned a home thanks to a mortgage, accounted for 1,000 of the approved August mortgages while first time buyers were responsible for 2,259 of these mortgages. This means that first time buyers represented 58% of the total mortgages whilst movers represented 26%, which are normal figures.

If we translate this to a value, first time buyers had approved mortgages for a value of 556 million euros while movers’ mortgages were valued at 267 million euros. In percentages, this means that first time buyers represented 59% of the value of the mortgages, and movers represented 28% of the same value.

Dr Ali Ugur, who is Banking and Payments Federation Ireland’s chief economist, is pleased with these figures, despite the fact they are down overall since last year. Mortgage activity had already increased in July, so a continued increase in August is a very good sign and should deliver a much better frame for the expected decrease in mortgage activity over the coming months. 

The mortgage drawdowns are down about 18% in the first half of 2020 compared to the first half of 2019. As previously mentioned, this is totally unsurprising: the middle of a global pandemic is not exactly the ideal time to buy a new house and make a long term commitment.

Dr Ali Ugur went on to say: “But, if recent approvals convert into drawdowns as they normally do, we could expect to see a better outcome than originally estimated back in April/May.”

He continued with: “It’s also interesting to note that when we compare first-time buyer mortgage approvals in August 2020 to the same period last year, there was a higher number both in terms of value and volume. Given that 58% of all approvals are to FTBs, we could expect to see that important category continue to be the single largest element of the market”.

All in all, it seems that the Irish mortgage market is recovering nicely, and we can certainly hope that it recovers fully after the Coronavirus panic.

Avantcard’s move into Irish mortgage market

The consumer finance company Avantcard has declared that it will enter the Irish mortgage market with a range of products later this year. Avantcard is based in Carrick on Shannon, with a second office in the capital Dublin and has been providing consumer finance products to customers in Ireland for over twenty years.

At the moment, Avantcard specialises in credit cards and personal loans but Bankinter, the owner of Avantcard, already has considerable mortgage business in Spain, Portugal and Luxembourg and will therefore be bringing its expertise to the Irish market.

The Avantcard name will be replaced by a more fitting title: Avant Money. This is to reflect the diversification of products offered and its ambition to delve further into Irish markets, and it will begin with mortgages.

Back in June 2019, there seemed to be the possibility of Avantcard moving into the mortgage market with the postal distributor An Post, but at the time, Avantcard chief executive Chris Paul dismissed these rumours, stating that a move into the mortgage market was not on the cards.

When asked about why a move into the mortgage market was now happening, Paul said this: “Over the years, we have seen how Irish consumers have been under-served in comparison to their European counterparts and it’s time for that to change”.

He went on to say: “Supported by our parent, Bankinter, and building on our strong consumer finance legacy, we are confident that we will be able to provide markedly better value for customers and deliver genuine, long-lasting change”.

Not much further information has been giving about the products themselves and it seems that Avantcard are keeping their cards relatively close to their chest. They have clearly stated that applications will be processed on a case by case basis, which is a good way to avoid giving further information.

Irish consumers should be excited about this information as increased competition almost always advantages the consumers. Rival companies are incentivised to bring their prices down to avoid losing customers and generally, all companies will have to try harder to attract and maintain customers.

The chairman of the Association of Irish Mortgage Advisors, Trevor Grant, is excited as well, and seems impressed with Avantcard and their ambitions. He had this to say about the move into the mortgage market: “We have worked closely with Avant Money over the past number of months, to support them with knowledge and insight into the Irish mortgage market. We have been hugely impressed with their determination to deliver a suite of excellent mortgage products.”

He also gave more on information on how the mortgage products will be offered, which is likely to be through specialist mortgage intermediaries: “As new mortgage lenders such as Dilosk, Finance Ireland, ICS and now Avant Money, come to the Irish market, they have invariably chosen specialist mortgage intermediaries as their primary distribution channel”.

He explained why this should positively impact Irish customers like this “This is mainly due to the fact that these intermediaries can provide greater product choice across the board, as well as often being able to offer better rates that are exclusively available through this channel.”

Generally speaking, this is very positive news for Irish consumers to receive, especially in the current climate. Coronavirus has been difficult on the country as a whole and it has become more and more challenging to get a mortgage for a house.

This move is no guarantee that all of a sudden mortgages will be easy to obtain, however it is a very good sign that companies are willing to make the plunge into the Irish market as it means they see some value there.

With more companies and more competitivity, consumers will have more choice and more freedom, and will not be constrained to one company or one price. If Bankinter and Avantcard, soon to become Avant Money, can deliver on their promises of “genuine, long lasting change” and “markedly better value for customers”, then it will be excellent news indeed for the average Irish person looking for a mortgage.


Mortgage rates in Ireland for 2020

At first glance, mortgage rates in Ireland might look much like those in England. But Ireland has experienced a different economic trajectory in the last few years, so the range of mortgage rates will likewise be different.

In Ireland five-year fixed mortgage rates can be a full percentage point lower than those in England, even though they are still among the highest in the Eurozone. These rates are not available for everyone but would be an option for certain groups who have an existing mortgage of over €300,000 and can offer at least a 20% deposit or similar equity on any existing property, using a calculator will make this clear. Ten-year fixed rate mortgages are also available, although at a higher rate of interest, naturally. Switchers and home movers will enjoy a better rate to some, as is always the case with these mortgages.

For those who don’t have access to equity or whose deposit is lower, there are other options including fixed rate mortgages for five or more years. Even though they may not be the best value, they are still affordable. The Central Bank’s loan-to-income rules apply unless a lender can show a very good reason why they should be exempt, so most lenders should expect to be subject to these rates.

Fixed rates of anything more than seven years for mortgage rates in Ireland have been rare, although they have been popular where they can be found. At least new buyers could budget for five years of mortgage payments and know what they were paying every month. Now they have a few more years’ grace. Ten-year fixed rate options are now an option; although buyers should be aware that this may mean a major hike in payments after the 10-year period is over. Cashback offers are not always the best option although the immediate lure of these offers may be strong. The savings offered by long term fixed rate offers are better, where they are available.

Fixed Rate Popularity

Fixed rate mortgage rates in Ireland remain popular because they mean buyers can budget effectively for a fixed amount every month. For those on a lower or fixed monthly budget, being able to know how much recurring bills may cost is imperative, so a fixed rate mortgage of any length is equivalent to a direct debit in that sense – everyone knows how much needs to be paid every month. For that very reason, variable rate mortgages have fallen in popularity. Simply, they are more difficult to budget for effectively, especially on a lower wage job where income may be variable. They can be manageable, but a fixed rate term, renegotiated every few years, is preferable.

Fixed rate mortgage rates in Ireland seem to be the way to go, for budgeting reasons if nothing else. Many lenders are now offering such mortgages, which are easier to apply for as long as the applicant can show they have adequate income every month to meet the required payment. At least house buyers should ask about the availability of such deals with their preferred lender or financial adviser, if only to ensure that they consider all options.

Fun Facts About Mortgages

If you’re looking to get on the property ladder for the first time, there’s a lot to know about mortgages. Buying a property nowadays is decidedly more complex than it was two decades ago, not to mention the fact that it is also much more expensive as well. However, it’s not all doom and gloom, as buying your first property will likely be one of the best investments that you could ever wish for. Today we’re not going to talk to you about numbers, we’re instead going to take a more light-hearted look at mortgages and will be sharing some interesting and fun facts about mortgages that you may not have been aware of.

It is possible to purchase a house without a deposit

Decades ago, buying a property without a deposit/down payment was surprisingly easy. These days however, it’s the deposit that most people struggle with. Generally, it’s around 10%, which is a lot of money to save up. Despite this however, it is still possible to purchase a house without a deposit, although it is very rare.

First time buyers are quite rare

Given the state of the economy and the market, this probably won’t come as that much of a surprise, but either way, here it is. Nowadays there are far fewer first time buyers than in the past. Typically, you’ll find that first time buyers make up roughly 40% of the housing market. Lately however, that number has dropped. It might not sound like much, but by 2013, first time buyers made up just 38%. This 2% drop may not sound like much, but in the grand scheme of things it’s quite significant. It’s estimated that that number could now actually be even lower still.

Mortgage debt is quite high

For the purpose of transparency, we need to tell you that by ‘quite high’ what we actually-mean is ‘astronomically high’. At the end of the final financial quarter of 2013, in the US alone, mortgage debts totalled $13 Trillion.

The word ‘mortgage’ is quite solemn

The word mortgage is derived from the French word ‘Morgage’ which was sometimes spelled ‘Mort Gaige’. This literally translated to ‘dead pledge’ in French. The meaning behind this was that, once you pay the mortgage off or fail to make payments, the mortgage dies.

Most people don’t understand mortgages

Mortgages are incredibly complex, and buying a property is certainly not simple or easy. According to market research however, around 33% of people admittedly do not understand the basic fundamentals of mortgages. There are of course, mortgage advisors and other property and lending experts you can talk to who can help, and they’re certainly well worth speaking to, especially if you’re looking to get on the property ladder for the first time.

Bizarre Mortgage Application Questions Revealed

People are quick to chastise millennials as being ‘self-righteous’ and ‘overly-sensitive’ with a false sense of entitlement, but when it comes to buying a property, especially for the first time, people in this day and age are right to feel hard done by. Their parents likely purchased their first property for less money than is now required purely to put down a deposit on a house. Ever since the credit crunch and the global financial crisis where the banks needed to be bailed out, lenders have really clamped down on their lending policies. It is now harder than ever to get a mortgage, though there is light at the end of the tunnel.

Lenders are becoming slightly less-strict nowadays, and there are plenty of resources and schemes available to help buyers get on the property ladder for the first time. Mortgage lenders do of course need to be cautious with whom they lend their money to, but some of the questions being asked are downright bizarre. If you’re thinking of applying for a mortgage, here’s a look at some bizarre questions you may find yourself being asked during the application process.

What do your children receive for pocket money?

If the person/persons applying for a mortgage happens to have children, this is indeed a genuine question. Yes, really. Now, bear in mind that the average price for a semi-detached property in Ireland is currently €271’000, it’s pretty safe to assume that the average child in Ireland will not be receiving anything close to that in weekly pocket money. If they were, the parents probably wouldn’t need to apply for a mortgage in the first place. Are the lenders really that strict that they’re genuinely worried about how much money a child is getting in pocket money each week?

How often do you eat steak per week?

This is another common question asked by mortgage lenders, and we can only assume it’s because they consider steak to be a luxurious and highly expensive food. In reality, steak prices nowadays are very reasonable, especially if you go for the less expensive cuts like rump. The lenders obviously want to figure out whether their mortgage repayments would be safe or whether or not the recipients would be out squandering their mortgage payments on Ribeye and sirloin steak instead. This question is flawed for many reasons.

To begin with, not everybody eats the same meals every single day, so some people have no idea when they’ll eat steak next. Then of course, there’s the fact that the recipients could simply lie. We’re fairly sure the mortgage police won’t be round every week to inspect the contents of their fridge.

How much do you spend on your pets?

Okay, there are some people out there that spend an astonishing amount of money on their pets, especially if their pets happen to be horses. Generally speaking, however, most people purchase the bare essentials needed to keep their fur-babies happy, clean, healthy, and fed and so we aren’t talking life-changing amounts of money.

Do you plan to have any more children?

This is a very personal question and it’s not really anybody else’s place to ask it, but some lenders do. Bear in mind that a mortgage is a long-term commitment that normally lasts decades, how can anybody give an answer for a future scenario? A couple may not be ready for kids when they apply for a mortgage, but three years down the line, perhaps they will be? You can’t expect them to tell the lenders that they want kids in three years because at the time of applying they may not have done.

Mortgages – Tips to Sell Your Home

Mortgages – Tips to Sell Your Home

Okay, after many happy years, and countless memories along the way, the time has now come for you to sell your home. Before you start looking into mortgages for your next property, that is indeed, if you require one, there is first the matter of selling the home you currently reside in. Selling a house isn’t like listing something second-hand on the internet, with a ‘buy it now’ option. Selling a house can be a stressful, complex, time-consuming, and even expensive process. That’s right, before you can sell your home there is a good chance that you will have to part with money yourself. Needless to say, not only do you want to get the best price, but you will also want to get the sale done and dusted as quickly as possible. That’s why for today’s topic, we’re looking at mortgagesas we list a series of tips to help you sell your home quicker.

Spruce it up

If you’re looking at selling up, comparing mortgages on a new property, and moving on, the last thing on your mind will be redecoration until you’ve purchased somewhere new. However, as the saying goes ‘you have to spend money to make money’. Unless you can honestly say that your house is immaculate, it is well worth spending some money and redecorating the house, or at the very least, giving the walls a neat new coat of paint. The nicer the house looks, the more likely it will be to sell. This also means tidying up the garden, cutting the grass, removing the weeds, and perhaps even painting the exterior. The nicer the property looks, both on picture, and in person, the easier you should find it to sell.

List on a Friday

Okay, this may sound like superstitious nonsense, but there is some truth to it. You see, according to recent statistics, the best day to list your property for sale if you want rid of it quickly is on a Friday. This is because people are generally happier on a Friday as it’s the weekend and it gives them time to relax and have fun. It also means that people will likely be free over the weekend to come and view, plus they may even have had a drink or two, which always lifts the spirits.

Cover all bases

Remember, when people are looking to buy a new home, they want as close to perfection as you can get. Although you might have been happy to live with that blown lightbulb in the corner, or that annoying paint chip on the wall, a prospective buyer won’t. All of those tedious maintenance jobs that you have been putting off for months, even years, will unfortunately need to be taken care of if you want to increase your chances of a quick sale. Basically, put yourself in the buyer’s shoes and ask yourself if you’d be happy to buy the property in its current state.

Mortgages and fintech – a match made in heaven?

Mortgages and fintech – a match made in heaven?

Applying for a Mortgage can be hell! There are few things that are worse than going through the process of meeting with mortgage brokers to trawl through every inch of your financial information, as well as your lifestyle and commitments, not to mention all of the documentation and identification that you have to sift through and file for an application. The process can be lengthy, frustrating and in many cases, cost a lot of money before you are even accepted for a mortgage.

For something that most every people have to do, you would have thought someone would have created a much more efficient and less stressful way of applying for a mortgage a long time ago.

The mortgage market seems to have remained in the dark ages whilst other consumer facing markets have been booming with the help of new technologies. Banks have invested in Fintech in order to make controlling your money possible at the touch of a button through online apps etc, but mortgages seem to have been forgotten about. The Guardian state that new wave of Fintech Mortgage businesses who have launched in the last couple of years, are using cutting-edge technology in order to make finding and applying for a mortgage quicker and slicker. In fact most of these businesses are offering these services for free to their customers. Some would say that with this in mind, mortgages and fintech are a match made in heaven.

There are several key ways that Fintech Mortgage platforms work in order to make the process for consumers through their end to end platforms.

Online mortgage lenders offer an end to end fully automated service which can make decisions on mortgage lending based on your application without the need of information being reviewed by a human. Forbes recently interviewed Francesca Carlesi CEO of mortgage broker service Molo, who explained that their service offer mortgages that are fully underwritten online. Their business is not just an online distribution model but also leverages automated decisions and real time data validation in the back end in order to offer customers quick answers and decisions on mortgage lending.  This makes the process much quicker as applications do not have to be checked and underwritten manually by humans.

Another key way in which Fintech companies improve the mortgage process is by automating the document collection process. The Times discuss how Fintech mortgage service Dashly, enable customers to scan and upload their current mortgage documents at the touch of a button. An automated system then works out where the customer lives, their mortgage rates and term before scanning the system for proposed better mortgage options. All of this information is collected by uploading one document, making the document collection process much easier and in secured in one place.

With Fintech businesses such as Dashly and Molo working to make the mortgage process easier for consumers to handle at the touch of a button, it is clear to see how mortgages and fintech are a match made made in heaven.

How to Increase Your Chances of Getting a Mortgage

How to Increase Your Chances of Getting a Mortgage

Let’s face it, we’re currently living in an age in which the ‘millennial’ will find it harder than ever to get onto the property ladder and purchase their very first home. People from a generation or two back may have lived through some tough times, but buying a house back then was much, much, much easier than it is right now. While, thanks to the worldwide global financial crisis of 2009, banks and lenders are far stricter and cautious when it comes to mortgages and loans, if you put in the preparation, do your research, and put in the hard work, it is still more than possible to snag yourself a very reasonable mortgage deal. Here are some tips to help increase your chances of getting a mortgage.

Get a credit score

Sadly, we’re living in a world where we are encouraged to apparently increase our chances of getting into debt. Rather than simply paying for things with cold, hard cash, or with our debit cards, we’re encouraged to take out credit on a variety of things. Why? Because in reality it is crucial that you have a credit score before you approach a bank or lender about a loan or a mortgage. People assume that not using a credit card or not having a credit score is going to be beneficial when in reality the exact opposite is true. Having no credit score is just as bad, if not worse than, having a poor credit score. Mobile phone contracts and credit cards are great ways of building up your score, though you need to be careful. More on that next.

Build your score sensibly

When you get a new credit card it can be tempting to make big and lavish purchases, especially with 0% interest offers and such like. The problem is that eventually this money will need to be paid off. If you miss a payment, this shows potential lenders that you’re not great at managing your finances. If you miss credit card payments, this tells the banks that you may miss mortgage repayments to them. Would you risk lending money to somebody if there was a strong possibility you wouldn’t get it all back? No, and neither will the banks. Make sensible purchases, and the second your credit card is activated, make sure you set up a direct debit to pay off a certain percentage of your card. Most people go with a minimum repayment because the sum is so small that they don’t miss the money, and it still covers their backs. Never miss a repayment and don’t pay off cards too quickly.

Save for a deposit

To buy a house you need a deposit. 10% is the norm, though some go with 5%, while others go with 20%. The bigger the deposit, the better the mortgage deal will likely be. This is because it shows that you are good at saving, and it helps you to get a lower interest rate. If you go with an even bigger deposit, of say, 35% – 40% of the property’s value, you’ll likely be offered some very enticing deals indeed.

Mortgages – 4 Things to Look for When You Are House Hunting

Mortgages – 4 Things to Look for When You Are House Hunting

It doesn’t matter whether you’re looking to get onto the property ladder for the very first time, or if you’re a seasoned property buyer, knowing what to look for when you’re house hunting is absolutely vital. We know that buying a house in this day and age is a heck of a lot more complex and expensive than it was a generation ago, but if you keep your eyes peeled, choose the best mortgages, and know what you’re looking for, buying a property needn’t be as hard as you may have imagined. When buying a property, you need to ensure that your heart doesn’t rule your head, which is why we’ve compiled this article on mortgages and things to look for when house hunting.

Mortgage providers

Okay, now, assuming you have your eye on a property that seems to be ticking all of the right boxes, one of the main things you need to consider is who is providing your mortgage. You can of course speak to a mortgage advisor and speak to various other experts who specialise in the field of mortgages, but ultimately you need to decide who to contact if you are looking to take a mortgage out on a property. Knowing who to speak to will determine what kind of a mortgage deal you get, how much you will be lent, and how much it will cost you each month to pay it back.

The area

When buying a property, one of the most important things to consider is the area. It could be the nicest property in the world, but if the area is not right for you, living in the property itself just won’t feel right. Ask yourself if the area is right for you. Does it have a reputation for crime and/or anti-social behaviour or is it quiet and peaceful? Does it have all of the local amenities you would need to live comfortably? What are the schools like if you have children? Are there good transport links, do you get a good vibe from the area? All of this, and much more besides, will need to be considered when it comes to the area.

The location of the house

Okay, so assuming you like the area the property is located in, what do you think about the location of the house itself? Does it have a nice view if you want one? Is it located on a flat surface or on a hill or steep incline? What’s the garden like? Are you heavily overlooked by your neighbours? Will you be able to park your car/cars? All of this is also very important when you’re searching for your dream home.

Size of the property

If you’re simply buying for yourself, there’s a good chance that you won’t want to purchase an overly-large property with, say, five bedrooms. If however, you have a large family, you’ll need a fairly-large home. People always seem to focus on the bedrooms when buying a home, and while this is important, you also need to remember bathrooms. One bathroom shared between one large, or even average-sized family, is a recipe for disaster. Basically, choose a property that is the right size for you and everybody else who may be living there.

Mortgages – 4 Top Tips for Letting a Property

Mortgages – 4 Top Tips for Letting a Property

With mortgages becoming tougher and tougher to obtain, and with house prices increasing, getting on the property ladder is now a whole lot tougher than it was several decades ago. With that said however, with the right amount of determination, dedication, and hard work, it can certainly be done. Once you have purchased a property, rather than worrying about mortgages and repayments etc, you could actually use the property to earn you some money. How? By letting it out.

Becoming a landlord could earn you some serious money, and it is a great way of making yourself some additional income in the process. Some people rent properties out as a way of earning a little extra cash, whereas other people do so as a full-time job. Whether you wish to become a full-time landlord or simply use a property to make you some extra spending money, here’s a look at our 4 top tips for letting a property.

Get the property ready

First and foremost, when you’re ready to let out a property you need to ensure that it is habitable and ready to be lived in. There are certain rules and regulations that must be adhered to, and different district councils have different rules so it’s well worth knowing the various rules and regulations well in advance. You should also give it a fresh coat of paint, carry out any repairs that need doing, and make it as pleasant as possible to live in.

Don’t try to cut corners

Unless you’re the luckiest landlord in the world, when you have a property you want to let out, it will almost certainly have some problems that you will have to deal with. The last thing you should ever do is try to cut corners and get the issues resolved on the cheap, because ultimately this will come back to bite you in the behind at some point. If there is a damp problem and you can visibly see mould/damp patches on the walls, don’t just paint over them and rent the property as quickly as you can. Instead, find out what’s causing the damp and get that fixed. If a job is worth doing, it’s worth doing right, so just bear that in mind.

Do your research

Before you decide whether or not to rent out a property, it’s very important that you do your research and try to find out as much about the area as possible. Don’t just look at transport links and amenities etc, try to look into average rent prices in the area too. It’s very important that you know what to charge your tenants, as the last thing you want is to be under or over-charging them.

Anticipate the worst

In a perfect scenario, you’d rent your property out to a wonderful couple who always pay their rent on time, plan on staying in the property for the foreseeable future and look after it and keep it in pristine condition. Unfortunately, life doesn’t always work like that. Sometimes there will be times when the property is empty, and you aren’t making money on it. There may also be issues with having your rent paid on time, and with problem tenants. Prepare for the worst but know how to react.