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4,000 Galway homeowners switch to ‘interest only’ mortgages

Bernie Ni Fhlatharta

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Date Published: 11-May-2011

BY ENDA CUNNINGHAM

More than 4,000 financially-troubled homeowners in Galway have switched their mortgages to ‘interest only’ repayments as they struggle to save their properties.

But the Money Advice and Budgeting Service (MABS) has warned that many are ‘hoping against hope’ when it comes to meeting their debts.

And concerns have been expressed that by switching to interest only repayments, homeowners will leave their family with a legacy of debt.

According to new figures from insurer Caledonian Life, in the region of 4,200 mortgage holders in Galway have recently switched from ‘capital plus interest’ mortgage repayments to interest only – but while payments are substantially reduced, the lump sum remains untouched, which can lead to crippling financial difficulties when a property is in negative equity.

“It is estimated that approximately 4,200 mortgage holders in Galway have switched to interest only mortgage payments to assist with afforability, but these homeowners may now be leaving their families open to thousands of euro of legacy debt.

“The most recent report from the Financial Regulator would suggest that this switch has become a common cost-saving strategy, as the public attempt to deal with affordability issues in the current recession,” the Caledonian report reads.

A spokesperson for MABS told the Connacht Tribune that lenders have an effective ‘duty of care’ to mortgage holders and must provide them with the most suitable solution to their money problems.

“The Code of Conduct [on mortgage arrears] outlines the responsibilities that the mortgage provider has in relation to customers – they have to outline all available opions and assist the consumer in choosing the best option. Any agreement should be reached in the best interest of the mortgage holder, and hopefully that’s what is happening.

“The objective is to keep people in their homes, but some people are in a situation of hoping against hope. Hoping that the architecture around mortgage default will change, or that a job will be found. We’re in a transition phase and there is a lot of uncertainty,” he said.

Meanwhile, a local insurance broker has warned that unless mortgage protection policies are renewed to reflect changes to mortgage repayments, families could be left ‘in the red’ for years to come.

Read more in today’s Connacht Tribune

Galway Bay FM News Archives

Appeal for information following Portumna crash

Bernie Ni Fhlatharta

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Date Published: 08-May-2013

Gardai are appealing for witnesses following a single vehicle crash at the Portumna bridge this morning.

The road from Nenagh to Loughrea reopened shortly after 11 this morning following the completion of a technical exam.

Four men were travelling in a van when they hit the Portumna bridge around 6:30 this morning.

Gardaí, ambulance and two units of Portumna fire services rushed to the scene, and one of the men was taken to Portiuncula hospital in Ballinasloe.

He is being treated for head injuries, which have been described by Gardaí as serious.

Anyone with information is asked to contact Portumna Garda station on 09-097-42060

 

 

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Galway Bay FM News Archives

President Higgins among GMIT’s first ever honorary fellowships

Bernie Ni Fhlatharta

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Date Published: 10-May-2013

GMIT is to honour seven outstanding individuals including President Michael D Higgins with Honorary Fellowships at a special ceremony later this month.

It’s the first time in the 40 year history of the Institute the Governing Body of GMIT has decided to award honorary fellowships.

The GMIT Honorary Fellowships will be conferred at the g Hotel in the city this day two weeks Friday 24 May at 2.30pm in front of 200 invited guests.

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Galway Bay FM News Archives

Galway commuters hold their breath as LRC intervenes in bus strike

Bernie Ni Fhlatharta

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Date Published: 13-May-2013

Galway commuters are holding their breath as there has been a potential breakthrough in the Bus Eireann dispute, as both sides have agreed to talks at the Labour Relations Commission.

The LRC intervened this afternoon, on day two of strike action that has seen 95 per cent of bus services disrupted across the country.

The LRC’s Director of Conciliation Services, Kevin Foley, says the National Bus and Rail Union and the company have agreed to meet for mediated talks at 8 this evening.

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