Mortgages in the recession – Q & A with an expert

I recently had a chance to pick the brains of Marketing Director of the Irish Mortgage Corporation, Frank Conway.

I asked him a few questions that we have gotten in from our readers and he was kind enough to provide a reply.

  • Thrifty Pages – Can a first time buyer still get a mortgage?

Frank Conway – Yes, first time buyers can still get a mortgage. Bank of Ireland and AIB are both still lending up to 92% of the purchase price. Interest rates begin below 3%, which is an excellent offer. What has changed over the last 12 months is mortgage lenders are no longer prepared to lend 100% of the purchase price, lenders are now reluctant to accept all bonus and or commission income since neither can be guaranteed in the current economy.

  • Thrifty Pages – What percentage mortgage can a person get now?

Frank Conway – Probably answered above, Bank of Ireland (BoI) and AIB both lend up to 92%, other lenders are offering 90% or less of the property purchase price.

  • Thrifty Pages – If I am falling behind in my mortgage, what should I do?

Frank Conway – If you are falling behind on your mortgage then call your lender right away and talk to them. The last thing a lender wants to do is have a paying customer who may have difficulty making the monthly payments. In most cases, lenders are prepared and willing to work with the mortgage customer.

  • Thrifty Pages – How do I negotiate a better deal with my existing lender?

Frank Conway – Negotiating a better deal. This has become a tricky one. If you have a tracker mortgage, you are unlikely to beat the deal you are on currently. If you have a standard variable, it may be hard to also beat the deal you are on. If you have a fixed rate mortgage, look out for some big switcher charges. Your bank may be willing to offer you a better deal on the face of things but you could incur some hefty break charges (up to €10,000 or more wouldn’t be exceptional). So, even though you get a better interest rate, bank charges to switch could negate the value. You really need to do your homework on this one, know all of the costs – banks are in the driving seat now and are not really negotiating, they are simply looking to survive.

  • Thrifty Pages – How do I switch my mortgage to another lender if I find a better deal?

Frank Conway – See my point above. If you get a better deal with another bank, be fully aware of any costs your own bank can incur for breaking out of a fixed rate mortgage. The break charges can be enormous. It could kill the reason for switching.

Frank Conway is Marketing Director of the Irish Mortgage Corporation, Ireland’s largest independent mortgage broker. They can be contacted on 1850 444 474.

If you are in arrears with your mortgage, the Money Advice and Budgeting Service – MABS provide some very useful information on their website. Their helpline be contacted on 1890 283438.

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