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Taking the Fear out of Arrears

Following on from the economic crisis and the subsequent increase in the cost of living and decrease in available work, many thousands of Irish people have been left in mortgage arrears which is a very stressful and uncertain position to be in. As the country begins to regain its financial footing there are of course increases in finance options, but up until this point many Irish householders may have found it quite difficult to avail of advice on these matters during what is of course a difficult financial time.

Recently, Tánaiste Frances Fitzgerald and Minister for Social Protection Leo Varadkar announced an awareness campaign to promote Abhaile, a free mortgage arrears support service which many of those struggling were unaware of.

This news follows a survey which found that many struggling with mortgage arrears are too embarrassed to tell their family and friends about their ongoing issues. This in itself is incredibly problematic as the weight of these issues alone can cause isolation, depression and other mental health difficulties. As such, it is essential that all homeowners who find themselves in arrears should have someone to speak to. That is the service that Abhaile hope to provide. Tánaiste Fitzgerald has stated that despite falling numbers, there are still approximately 34,500 people in this country in long-term arrears. These are the people they hope to reach with this new campaign as it also emerged that over two thirds of people did not know that there were any services available to them to discuss these issues. Minister Varadkar was quoted as saying:

“It’s our firm hope we’ll bring forward thousands more people who are now in need of similar help. The key message is to come forward and seek the help that you need. Don’t be afraid, help is available at no cost and we’re on your side.”

Whilst the fact that the number of repossession cases has halved in recent years is indeed positive news, it is also essential that those still struggling be aware of all of the assistance at their disposal to ensure that these rates continue to fall in the coming years so that we can see a significant reduction in people feeling alone in these issues. It was also revealed that those in long-term arrears are those least likely to seek advice or assistance as they may feel that their situation is hopeless.

Angela Black of the Citizens Information Board has said:

“What we’re doing is asking members of the public to go out there and take a look around at their family and friends and people who might look ok on the surface but who are struggling behind closed doors with mortgage arrears. They might not realise they have access to this free expert financial and legal advice. Family and friends can play a vital role in encouraging people to look for help”

The Abhaile service has assisted 4,500 people since it became fully operational last October.

The Abhaile scheme is administered by the Money Advice and Budgeting Service (MABS).

Its helpline, which is open Monday to Friday 9am to 8pm is 0761072000.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

MORTGAGE WOES KEEP BUYERS ON THEIR TOES.

Mortgage rules have been a point of contention in Ireland for some time now and whether house prices fall or rise, it has become increasingly difficult for those hoping to gain footing on the first step of the housing ladder. Last year, mortgage rules were changed to mean that only 3.5% of income can be borrows, and there must be a 10% deposit on all mortgages up to €220,000, and a further 20% on any cost above this figure.

 

At the time of this change it was suggested that these rules would be in place for a period of a year and then re-examined. As they were put in place in February last year, all eyes will be on these rules to see if there is any change which might allow for easier purchasing. DNG have suggested that they would like to see the borrowing limit raised to 4% and the 10% deposit rule extended to €300,000 as they have seen over the past year that many people are becoming trapped by these rules and are unable to buy due to higher house prices and stricter rules.

 

It has been reported this week that we may see an even bigger shake up in the mortgage industry. An Australian lender, Pepper is reportedly set to offer new incredibly competitive mortgage rates which will target first-time buyers in particular. This arrival of a new lender is expected to push current Irish lenders into offering new lower rates in order to respond to competition and demand.

 

Already since the announcement we have seen Bank of Ireland offer a new bonus. This bonus would see them add 10% to first time buyers onto their existing deposit savings. Additionally, Bank of Ireland were already offering 2% back of every new mortgage.

 

Pepper is said to be set to offer rates as low as 3.55% for both first time buyers and those looking to switch lenders. Pepper Ireland boss Paul Doddrell has suggested that Pepper will also be first in line with offers for those who have found themselves refused by other banks, including those who are self-employed. It is suggested that Pepper will also be able to lend to those who found themselves in arrears during the financial crisis, but have now found their way back to meeting payments.

 

Whilst these new offers may not be a complete end to Irish mortgage woes as these offers will only be available through brokers, the suggestion of another adjustment of the overly tight mortgage rules will be a welcome one for many first time buyers and prospective first time buyers. It is hoped that we will see a general reduction in rates, with the onset of further competition in the Irish mortgage market. If you require assistance with your own or your company’s finances whilst hoping to gain a mortgage, please don’t hesitate to contact us here at DCA accountantswhere we are always happy to help.