IN the last 12 months alone an estimated 1,600 first time buyers (FTBs) in Limerick have taken their tentative first steps onto the property ladder. According to one mortgage insurance provider, Caledonian Life, it has been a great time to buy, with potential homeowners comforted by the fact that the market has adjusted. National average house prices have dropped by at least 35 per cent since their peak in 2006. For some, buying a property has now become much more affordable.
However, as lenders increasingly tighten their already stringent acceptance criteria, these would-be homeowners in Limerick are desperately seeking to present themselves in as positive a light as possible to those in a position to offer credit – the banks.
As head of sales in Caledonian Life, Greg Dyer is qualified to say that well intentioned desire to keep the banks, as the borrower may mistakenly see it, “happy”, could end up costing the buyer in the long run: “This is because some financial products offered by lenders, are in some cases actually more expensive when compared with other similar products available on the market. Mortgage protection cover has been found to be one such case”.
According to Mr Dyer, “The cost of Mortgage Protection cover for the same individual with the same value on their mortgage can vary by as much as €7,000 over the term of the mortgage. Given that there were over an estimated 1,600 First Time Buyers in Limerick in the last 12months, we feel it’s important to communicate that shopping around for this type of cover can result in a much better deal for the borrowers.
“In addition, there are over 63,000 existing households in Limerick. We believe that many of these homeowners could save a significant sum by talking to their local Broker to see if they are getting the best value policy to meet their needs. FTBs or any other mortgage holder for that matter, should be made aware that they are not under any legal obligation to purchase or retain these type of products from their mortgage lender only. This often goes unquestioned due to the lenders position of power and the applicant’s wish to please”.
A local broker will be able to offer anyone in the process of taking out or applying for a mortgage an independent and impartial financial review.
