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

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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

Retail industry trade body welcomes B&Q announcement

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Date Published: 07-May-2013

Retail Excellence Ireland, the country’s largest retail industry trade body, has welcomed the news that 60 jobs have been saved at the city branch of B&Q.

It’s after the home improvements store successfully exited examinership.

Under the scheme, 2.4 million euro is to be invested by parent company Kingfisher plc, and B and Q will continue to trade at eight stores

This means 640 jobs have been saved nationwide, including 60 at the outlet in Knocknacarra.

However, David Fitzsimons of Retail Excellence Ireland says landlords need to be willing to help out smaller retailers too.

 

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Galway Bay FM News Archives

Foundation reports nine Galway heart deaths each week

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Date Published: 09-May-2013

Nine people die in Galway every week from heart disease and stroke.

That’s according to the Irish Heart Foundation, which is launching its Happy Hearts Appeal today. (9/5)

An Taoiseach, Enda Kenny, launched the appeal today to help raise funds for the charity, which has seen increasing demand on its patient services.

The Foundation says it needs to raise at least half a million euro to maintain existing information services.

 

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Galway Bay FM News Archives

Call to tackle delays at Oranmore rail crossing

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Date Published: 13-May-2013

Concerns have been raised over traffic delays at the railway crossing in Oranmore.

Councillor Jim Cuddy says he has received many representations from local motorists who have been experiencing extended delays.

He says the closed barrier can sometimes cause a traffic tailback as far as the roundabout near the Maldron hotel.

Cllr Cuddy has brought the matter to the attention of Iarnrod Eireann and has asked for an explanation as to why the crossing is closed for so long.

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