BENEFITS to first-time buyers from drastic falls in property prices are wiped out by sharp increases in mortgage costs, new research shows. House prices have dived by 40pc since 2007, which means potential buyers would need a much smaller mortgage. But a series of mortgage-rate hikes by all lenders mean that the cost of servicing even a small mortgage has shot up. Mortgage expert Karl Deeter accused banks of capturing most of the gains for potential buyers of lower prices by pushing up mortgage costs.
“Getting rid of debt is a good idea, and the new Permanent TSB bonus scheme puts a sweetener on it,” said Karl Deeter, head of customer advice with the financial advisers, advisors.ie. “If you don’t have a rainy-day fund, this is not for you. If you have debt elsewhere that is at a higher interest rate, it is a bad idea.”
When a bank holds a loan worth €200,000 it is an asset valued at that figure. Even if the security for the loan is a property that has fallen in value to €100,000.
So it is no surprise that banks will do whatever it takes in order to avoid turning their asset into a 50 per cent loss. In fact, even if the loan getting into trouble it doesn’t get written down to €100,000 -that only happens after the asset value has been realised. This is in part why we have three repossessions per 100,000 mortgages, while Britain has 65 times more, at about 200 per 100,000. At the same time, there has been huge political pressure via politicians and the Central Bank (formerly the Financial Regulator), via the thrice reworked Code of Conduct on Mortgage Arrears to ensure that we don’t allow people to get their homes repossessed as long as they engage’ with the lender.
Filed in Accountancy, Accountant, Advisors.ie In the Press, Banking, Debt, Economics, Financial Advice, Mortgages
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Also tagged debt forgiveness, distressed debt, distressed mortgage, distressed seller, imb, problem loans, provision for bad debt, writedowns
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Midweek on TV3 had a segment on debt forgiveness and it featured some commentary from Karl Deeter of our company. The piece is above, the topic is provocative!
TV3 piece by Brian O’Donovan on the ECB rate increase: featuring Irish Mortgage Brokers and commentary was regarding the effect that the rate increase would have on households with mortgages
Filed in Accountancy, Advisors.ie In the Press, Financial Advice, Mortgages
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Also tagged accountants, accountnacy dublin, brian o'donovan, debt, dublin 2 accountants, financial advice, karl deeter, liquidations, tv3
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We had an opinion piece in the Sunday Business post this week on mortgages, the full version is in this posting, or you can get it on the Sunday Business Post website in the ‘news’ section.
Filed in Accountancy, Advisors.ie In the Press, Economics, Financial Advice, Mortgages, Property tax, tax relief at source, Taxation
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Also tagged borrowing, finance, financial advice, investment property, irish property market, mortgage market, nama, sbpost, sunday business post, tax relief at source, trs
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“It is probably going to be the first of several moves but how close those moves come together and how aggressive those moves are is something that remains to be seen,” said financial analyst and mortgage adviser Karl Deeter.
Conor Pope wrote in the Irish Times: “It is probably going to be the first of several moves but how close those moves come together and how aggressive those moves are is something that remains to be seen,” says financial analyst and mortgage adviser Karl Deeter. “Unfortunately there is only a lower limit on interest, there is no upward limit and in theory rates can go as high as they want to. If you look at our total number of mortgages and the number that are in distress versus where we probably should be, it is clear that thus far the low rates have has actually served us well and saved the country from having a much larger problem,” Deeter says.
Filed in Accountancy, Advisors.ie In the Press, Banking, Economics, Mortgages
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Also tagged brokers, conor pope, deposit rates, ecb rate hike, ecb rates, finance, irish times, karl deeter, mortgage, tracker mortgages
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Wednesday, March 16, 2011
Yesterday, mortgage experts said BoI was set to hike its fixed rates in days. “Bank of Ireland will follow this with similar increases,” Karl Deeter, of Irish Mortgage Brokers, said. And Mr Deeter criticised the fact that homeowners did not receive any warning about AIB’s move to push up its rates.
Tuesday, February 22, 2011
rish Mortgage Brokers director Karl Deeter said the bank was effectively now out of the fixed-rate market, as new customers could only get a fixed rate if they were borrowing less than half of the value of the home. He added that only a small number of existing borrowers would qualify for a fixed rate, but with the rates so high nobody would take them up.
