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Banks say that people who got mortgage approval before the crisis can have this extended

Customers can be granted an extension in situations where their “circumstances have not materially changed”.

BANKS WILL BE able to extend the period for which its customers have secured mortgage approval during the current Covid-19 crisis, the Banking and Payments Federation Ireland (BPFI) has said.

The representative body said it was aware that some of those who are further along the application process may be worried that the present situation will affect this process. 

While lenders are facilitating drawdowns within normal timeframes where the standard requirements have been fulfilled, the BPFI said that there may be some delays that are “due to factors beyond the lender’s controls”. 

In new guidance published this morning, it said banks remain open for businesses for new mortgage applications and are operating “as effectively as circumstances allow”. 

When it comes to extending mortgage approval, lenders will be able to do so in circumstances where the customer’s circumstance has not materially changed, subject to standard income and affordability checks. 

The BPFI said: “And for those who have a mortgage approval but who have unfortunately experienced income loss due to Covid-19, a lender can keep this application open on its system for a period of time after which it can be reviewed and the customer can provide an update on his/her employment and income situation.

This approach is considered to be clearly in the interest of both the customer and the lender in ensuring that mortgages are not extended to those who cannot now or in the immediate future afford them.

It added that delays to the application process could arise where a valuers aren’t able to conduct a full inspection of a property or legal practitioners can’t access everything they need to complete all the steps in buying a property.

BPFI CEO Brian Hayes said: “At whatever stage applicants may be in the mortgage process, should they have any concerns we would encourage them to read the information available on the BPFI’s website in the first instance, and if they have any further questions beyond that to contact their lender who will advise them on their particular situation.”

The industry body has a FAQ on mortgages here.

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    Mute
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    Apr 20th 2020, 9:21 AM

    Banks say things like this to get the credit, the free ads, and the PR. Try ringing them and it’s usually a different story.

    They love the “large number of calls” line, so they use it in any crisis and after any scandal. Then weeks later when you finally get through, you’ll find you’ve missed the deadline.

    Unless they’re ordered to apply a change for all customers, they’ll wriggle out of it unless they find a way to benefit from it (eg: extra interest)

    Sick of the journal and the rest of the media falling for it every time.

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    Mute The Bus
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    Apr 20th 2020, 10:46 AM

    Just ring the mortgage advisor in your branch. Then if they don’t answer, email them. Then you have your trail. You’ve already got the approval.

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    Mute Mary Morrisey
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    Apr 20th 2020, 11:07 AM

    @: With all this contactless charges happening, how will banks get the money they are charging to hold our money for us back to the communities?

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    Mute
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    Apr 20th 2020, 11:09 AM

    @The Bus:

    Few banks will accept emails as anything for exactly that reason. They’ll have a terms & conditions to say you must post a letter (which they’ll “lose” or “never receive”), or arrange an appointment. Trust me, I’ve been through this myself trying to close my PTSB account for months now, and on a couple of other issues before. They’ve got this down to an art form.

    If you don’t go through their process they’ll use that as their excuse.

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    Mute Gerrard
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    Apr 20th 2020, 9:19 AM

    A few of my friends are holding off on getting mortgages thinking that prices might fall in a bad recession.

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    Mute Trevor Beale
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    Apr 20th 2020, 9:25 AM

    @Gerrard: wise move I’d say. In these circumstances a price review should definitely be on the cards.

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    Mute Criostoir Mac Ranghaill
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    Apr 20th 2020, 9:53 AM

    @Gerrard: Tell the robbing Banks to stuff their kind gesture Houses are totally overvalued at present wait for the big drop
    The reality train is building up steam on the tracks

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    Mute cryptodon
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    Apr 20th 2020, 10:02 AM

    @Gerrard: Yea that’s not gonna happen. They are printing money to beat the band.

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    Mute Alan
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    Apr 20th 2020, 10:44 AM

    @Gerrard: of course the prices will drop. Estate agents are deluding themselves

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    Mute Mary Morrisey
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    Apr 20th 2020, 11:10 AM

    @Gerrard: Betting Daft is seeing certain types of houses (not rentals) for sale grow.

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    Mute Jurgen Remak
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    Apr 20th 2020, 9:40 AM

    Could be a great time to buy in next 6 months if you have mortgage approval, better still if you can hold off for longer.
    Any prospect of a V shape recovery is off the table. If you are in a secure job I would be waiting for sure, there has got to be some steep falls in most parts of the country.

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    Mute Brian
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    Apr 20th 2020, 11:25 AM

    @Jurgen Remak: it’s highly likely if house prices drop considerably that many of the houses that people were close to buying will simply not be available in 6 to 12 months. Unless highly motivated to proceed with a sale, I just can’t see many sellers accepting large discounts on properties. Sellers will look to ride out the storm as there is a chronic shortage of quality housing and there’s going to be exceptional pent-up demand for housing the further along we go through the year.

    In our house now two years and I genuinely sympathise with buyers who are stuck with the dilemma of whether to buy now or wait given many are paying rents that are higher than mortgages.

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    Mute Jay
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    Apr 20th 2020, 11:36 AM

    @Jurgen Remak: more like 18 months before bottom out if this is the beginning of a major recession.

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    Mute Dean
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    Apr 20th 2020, 12:10 PM

    @Jurgen Remak:
    That is if the vulture funds don’t swoop in and buy up all the properties at low prices, monopolising the housing market.

    They’d make housing even more unaffordable, as they’ll control most of the commodity (ie. shelter), setting their own prices for house sales or rents.

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    Mute Jurgen Remak
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    Apr 20th 2020, 12:15 PM

    @Brian: True, but there will be people forced to sell in this recession. Though that’s very tough for them, it’s an opportunity for those with mortgage approval (or cash).

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    Mute Brian
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    Apr 20th 2020, 1:22 PM

    @Jurgen Remak: True people will get into difficulties financially but again it could take the banks years to actually to win repossession . Even then the bank could wait for prices to rise while developers do the same so I agree we face very hard times ahead but I dont see the huge depression in house prices as supply of housing won’t be there.

    If you a cash buyer then there could well be short term opportunities if you are picky in the coming 6 months

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    Mute Sorcha Ní Shúilleabháin
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    Apr 20th 2020, 9:52 AM

    Am I right in saying people who are availing of a temporary break from loan and mortgage repayments due to COVID-19 face bigger repayments once the break is over?

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    Mute Bo bo
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    Apr 20th 2020, 10:02 AM

    @Sorcha Ní Shúilleabháin: that’s true. I asked my bank what my new repayments would be if I availed of a mortgage holiday of 3 months and get this… they couldn’t give me a figure. Blank cheque stuff….

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    Mute IRL77
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    Apr 20th 2020, 10:02 AM

    @Sorcha Ní Shúilleabháin: yes….the term of your loan remains the same and your 3 month “break” is added in so that means the interest you pay each month will increase….banks will make more money.

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    Mute Mark Johnson
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    Apr 20th 2020, 10:28 AM

    @Sorcha Ní Shúilleabháin: thats how most mortgage payment breaks operate. its just a break..not free money.

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    Mute Derek Poutch
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    Apr 20th 2020, 10:45 AM

    @Mark Johnson: Then why is it they are making out that they are doing you a big favor while they are actually charging you more.

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    Mute The next small thing
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    Apr 20th 2020, 11:10 AM

    @Derek Poutch: the good news is you don’t have to avail of the mortgage break and continue to pay as per the contract you signed with the bank to get the money in the first place.

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    Mute Mark Johnson
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    Apr 20th 2020, 12:13 PM

    @The next small thing: Exactly. Mortgage repayments should always be a monthly priority..

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    Mute Sorcha Ní Shúilleabháin
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    Apr 20th 2020, 1:31 PM

    @The next small thing: You make it sound like a choice. Given that we now have nearly a million people being supported by the state avsiling of the break may be a necessity rather than a choice. The banks clearly havn’t followed the ministers advice to ‘cop on’ and return the favour by bailing people out.

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    Mute The next small thing
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    Apr 20th 2020, 2:30 PM

    @Sorcha Ní Shúilleabháin: Well it is a choice, people sign a legally binding contract when taking out a mortgage saying they will pay x amount each month and that if they don’t pay the bank can repossess the house. People can’t just decide not to honour that contract, what would happen if the bank decided to change the terms of the mortgage in their favour (we saw the uproar with the tracker mortgage scandal, rightly as well). If contracts aren’t complied with and there are no repercussions then there won’t be mortgages and people can just rent off vulture funds for their life but you can’t pick and choose what parts of a contract to follow.
    At least with the mortgage holiday it removes the stress of finding a mortgage payment for the next few months even if it does add a couple of quid on the monthly repayments when things get bck to normal.

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    Mute Dave
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    Apr 20th 2020, 10:59 AM

    Absolutely correct, not doing anyone any favours, except themselves. The banks are profiting from all the mortgage breaks in the medium to long term. The Irish people are yet again forking out to make the banks richer.

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    Mute Paul
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    Apr 20th 2020, 12:20 PM

    So you got approval for a mortgage, get your loan, move in (if within 2km) but immediately default because you are now on €350pw and can’t possibly make the repayments.
    Repo’d and bad credit rating follows.
    Who in their right mind would fall for this?

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    Mute Mark Johnson
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    Apr 20th 2020, 2:10 PM

    @Paul: We all have choices and we dont have to say Yes.

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    Mute Bio_Man
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    Apr 20th 2020, 11:15 AM

    Irish Banks aka legal Con Atists.

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    Mute Bio_Man
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    Apr 20th 2020, 2:25 PM

    @Bio_Man: *Artists.

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    Mute Newto2016
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    Apr 20th 2020, 11:16 AM

    Yes – IF their circumstances haven‘t changed. The majority of us are at least on reduced hours if not temporarily laid off all together so very few will meet that criterion.

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    Mute Arvydas Mencinskas
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    Apr 21st 2020, 12:52 PM

    Banksters wants your soul. Don’t be tempted to take loan just before all world economy will sink… rats already jumping of the boat… just saying, wait for at least for 2-3 years, by the way I’m not financial adviser, just common sense

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