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Would-Be New Buyers Warned Not To Default On Personal Debts
WOULD-BE first-time buyers have been warned to avoid defaulting on credit card and other debts if they want to make sure they are not turned down for a mortgage when the housing market settles down.
Banks and building societies are now more inclined to look at the personal credit histories of people seeking mortgage finance, according to Frank Conway of the Irish Mortgage Corporation.
And he warned that banks and building societies are more inclined to refer to the Irish Credit Bureau on the credit histories of new buyers before approving homeloans.
"It is now more important than ever that prospective first-time buyers maintain a good credit record by ensuring they pay any outstanding loans as agreed with their lender, on the agreed dates," Mr Conway said.
Loans which prospective first-time buyers need to be careful to meet the repayments on include credit card debts, car finance loans, personal loans, student loans and overdraft facilities.
He said that finance companies that extend credit in Ireland report the payment histories of their borrowers to the Irish Credit Bureau (ICB).
Repayment
In the event that a prospective first-time buyer applies for a mortgage, lenders will verify that their repayment histories are in order.
"Lenders are likely to refuse a mortgage application if there is any derogatory on a credit bureau. This is particularly the case if there is any record of a missed payment on any debt owed by the mortgage applicant, he added.
Consumers who are encountering problems, specifically with making their full monthly payments, should contact their lender to seek an arrangement.
"The last thing a prospective first-time buyer should do is ignore a problem.
"Many will be surprised at how willing lenders will be to working out a fair solution to ensure that some form of payment continues," the Irish Mortgage Corporation marketing director said.
He said that several major mortgage lenders have recently announced significant first-time mortgage packages.
These include multi-billion euro fund packages, 92pc mortgages and extremely competitive rates.
"For prospective first-time buyers, the availability of these packages is welcome news and should provide a meaningful opportunity as they look to buy their first home," he added.
In the past few weeks Bank of Ireland has launched a 2.45pc one-year fixed rate for new buyers who are borrowing 92pc or less of the value of their home.
AIB has a one-year rate of 2.49pc, while Halifax has a one-year rate of 2.9pc, which will be available from March 2.
Source: http://www.independent.ie/
