RomaineScallySolicitors > > Re-Mortgaging

Conveyancing and Remortgaging

Question- I am thinking of remortgaging as finally, after years of worry and negative equity, my house has increased substantially in value.  I have been tied in to an expensive mortgage for years but, I am now in a position to switch lender.  Needless to say however, I am somewhat apprehensive as I do not want to go from the, “fat to the fire”.  Can you think of any disadvantages legally?

 A – There is no doubt about it.  With interest rates being quite competitive at the moment, it may well be the opportune time to consider moving mortgage provider.  Many of us have been locked into unattractive mortgages through no fault of our own because of negative equity for years and now is the first opportunity for us to look at more attractive options.  I would certainly encourage you and anybody else to do so.  In addition, there are many favourable advantages to remortgaging, not least being the promise of a “cashback offer” from some of the lenders.  However, what is most important for all borrowers is that the interest rate is attractive and that you shop around for the best interest rate and terms to suit your individual requirements.  I would introduce a cautionary note however that there is now talk of introducing legislation to prevent the Banks from offering customers cashback on their mortgages.  This has been very attractive to borrowers of recent months, and indeed the past couple of years, since it was introduced, but there is no guarantee that it will continue.

Currently one of the main Banks is offering home buyers and mortgage switchers alike, 2% back on their mortgage as cash, with another 1% possibly available for current account holders with the Bank.  Another of the major Banks are offering €2,000.00 back in cash and another lender offers not just 2% cashback on the value of the mortgage but also 2% of the monthly mortgage repayment back in cash every month!  It is quite astonishing how competitive the remortgage market has now become and we would certainly urge you to take advantage of this situation before legislation is introduced to ban these incentives.  They are attractive and provided that you also carefully look into the rate of interest you are being offered, you can achieve not only a more favourable rate of interest, but a lump sum to help with some expense or indeed just to spend on a well deserved holiday!  We can see no reasons not to encourage you to proceed as you suggest and we wish you the very best of luck and indeed happy spending!  You will need to instruct a solicitor fairly early on in the process to ensure that there is no delay particularly now with the threat of the incentives being banned in the near future.  We would urge you therefore to start the process as soon as possible as your solicitor will have to take up your title documents from your previous lender which in itself can take up to three weeks or even more.

Question –  Myself and my husband have a mortgage of approximately €390,000.00 and desperately want to switch mortgage provider now that we are out of negative equity.  We have really struggled over the past ten years to meet our mortgage repayments and although we have never missed one, it has made for very tight budgeting and no holidays.  Would we be wise to switch mortgage provider?

 A – As with the previous answer above, we strongly recommend that you immediately investigate the possibility of switching mortgage provider to avail of the attractive incentives out there.  Provided that you have a loan to value greater than 80%, and a good credit rating, you can now switch mortgage provider.  Assuming that you are currently on a variable rate of 4%, you could switch to a four year fixed rate at 2.6% (current rates as of the date of going to press).  This would lower your monthly repayment by €300.00 and save interest of €99,000.00 over a term of 28 years cutting almost 6 years off your mortgage term.  This is effectively a, “no brainer”, if you can avail of this option.  In addition, depending on who you switch to, you could also avail of the cash offers and end up with enough money to pay for a well deserved and indeed well earned holiday for the first time in ten years.  As with the previous response however, we urge you to move quickly as moves are afoot to close down these attractive incentives for borrowers.  We wish you the very best of luck.

Question – We are a couple who are just reaching the end of a ten year fixed term mortgage.  At the time of taking it out, it seemed like an attractive rate but, it now seems quite high compared to the shorter term fixed rates.  Our present lender is trying to encourage us to stay with them and has offered us a rate of 2.6% fixed for three years.  However, there are no incentives with this and, after ten years of living frugally, we are very attracted to the offers available for switching mortgage provider.  Do you think it’s better to stay with the present lender or move?

 A – Firstly, congratulations on surviving a fixed term mortgage over ten years at a relatively high rate of interest.  You have done very well not to default over what I am sure were some very difficult years.  Based on the sacrifices made over those ten years, you certainly deserve to avail of the best deal out there and the deal currently being offered to you by your present lender may not be the best one.  Your present lender cannot offer you an incentive by way of a cash payment as these are generally only available when you switch lender.  There are lenders out there offering the rate you suggest together with a cashback payment of at least €2,000.00, sometimes more.  The costs of remortgaging are not high and indeed some lenders also offer the payment of some or all of the legal fees in addition.  We strongly recommend therefore that you take your time and shop around to get the best rate available but also one which offers you an attractive cash package to allow you some flexibility in your spending to pay for some little luxuries you have missed out on over the years.  Again, we would urge you to move quickly as these incentives are likely to be curtailed in the reasonably near future.  We wish you the very best of luck.











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