Wednesday, Nov 01, 2006

Hunt begins for cheaper loans as debt hits new high

Irish Independant: Hunt begins for cheaper loans as debt hits new high

CASH-STRAPPED home owners are desperately shopping around to reduce soaring monthly repayments as debt levels hit new records. Figures from the Central Bank show that companies and individuals borrowed almost €6bn in September, with mortgages accounting for €2bn.

Posted by nevajims @ 10:46 PM (396 views)
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10 Comments

1. indiablue19 said...

So at least the news media in Ireland is calling a spade a spade. Things are tight and people are wheeling and dealing to get the pressure off. These types of hikes in average monthly payments have got to be meaningful in a lot of households. And they're looking down the barrel of a sixth interest rate boost, and they more or less know it. If anyone in the UK media were being honest, this panicked scramble is probably entirely mirrored in present personal finance dealings over here, and then some. If anyone in the banking industry were being honest, they'd be planning interest rate hikes and letting people know they were coming, rather than this stupid shell game every month as though they were playing for party prizes with a bunch of moronic children.

Wednesday, November 1, 2006 11:20PM Report Comment
 

2. Nohpc said...

I disagree with you here indiablue. The fact that people are having the sense to shop around for their loans show that they are becoming more savvy with their finances. You can get a loan rate at 4.9% if you have a good credit rating yet lots of people will still take out loans from their own bank at a much higher rate than that costing them possibly 100s more each month. Somebody who is spending all their money every month on their mortgage and loans can actually save themselves hundreds of pounds by moving and thus keep the house price boom going.

Thursday, November 2, 2006 01:14AM Report Comment
 

3. Glorious Sunshine! said...

indiablue 19...you do talk drivel.

Thursday, November 2, 2006 01:42AM Report Comment
 

4. inbreda said...

What's wrong with IndiaBlues comments?

I thought the point of the article wasn't just that people were shopping around, it was the fact that they were HAVING to shop around. It's the difference that's important surely.

The point is that they can shop around to ease the pressure, but another couple of rate rises and they'll be feeling the heat again, but with nowhere to go.

Thursday, November 2, 2006 09:29AM Report Comment
 

5. sold 2 rent 1 said...

Nohpc and Glorious sunshine,

The real issue is that the Irish housing market has changed dramatically over the last 6-8 weeks. I know from first hand as my wife is selling her house in Dublin. We had an offer that was withdrawn and have now reduced the price by 10K. The original asking price was not overvalued either as this was 30K below one agents valuation.

Times are a changing. If you want to keep your head in the sand then so be it.

Thursday, November 2, 2006 09:50AM Report Comment
 

6. Nohpc said...

sold 2 rent. One agent's valuation does not mean anything. How many agents did you have value your house and did you go for the highest one? The face that the offer was lowered does not mean house prices are dropping in ireland. It is common tactics.
I agree a couple more interest rate rises and people may be in real trouble which is why I don't see it happening. If people can't afford to buy anything inflation will drop quickly as will interest rates.

Thursday, November 2, 2006 10:27AM Report Comment
 

7. indiablue19 said...

Inbreda and sold2 rent 1....

Well said. This is the point, and also the fact that the media in Ireland is unabashedly facing the volume of the problem and no attempts to obfsucate the issue, nor attribute the rush to the Banks to some laudatory motive. There's not enough money in households to pay the bills they are saying loud and clear -- time for knee-jerk nominal panic -- BASTA! And they've acknowledged there WILL BE further interest rises, which no one in responsibility here seems able to get their mouth around.

Rather, in the UK, it's ostriches and exhaustive evaluative parlance all around, calling a spade a "manipulative single fulcrum soil handler". Anyone can defend the avoidance of reality who will. We can't call it "savvy" for mortgage holders to continually increase the overall indebtedness of a nation which has already maxxed what it can afford. Hopefully honesty comes as a caution to Irish banks offering 10X income mortgages and BTL arrangements for wide-eyes 21 year old investors, before it's too late. I applaud the effort anyway. I've seen too many banks crash to think general stupidity is worth defending.

Glorious Sunshine....when are you going to come up with something besides the odd deprecatory comment?

Thursday, November 2, 2006 11:45AM Report Comment
 

8. sovietuk said...

Money needs to be made more expensive. I'll be cracking open the champagne everytime there's a rate rise.

Thursday, November 2, 2006 12:06PM Report Comment
 

9. sold 2 rent 1 said...

NoHPC,

We had 3 valuations and went for the lowest one. 30K less than the highest one.
Properties are sold differently in Ireland. They are advertised as "Excess" of a minimum price.
People outbid each other over 4-6 weeks and then you accept the best offer (Note: bids are not sealed)
We originally thought that the price would be bid up by 30K (to the highest valuation)

Price reductions are usually unheard of - until now

If you ask any estage agent in Dublin, they will tell you (in private) that the market has radically changed since August.

NoHPC, come to the dark side. These are the valuations you are looking for.

Thursday, November 2, 2006 04:17PM Report Comment
 

10. indiablue19 said...

Nohopc....

Affordability of payments and purchasing is not the only impetus the government might need to raise interest rates. Sometimes there is no choice because other parts of the economy are failing and caution is thrown to the wind. Don't think the government will always have a choice if inflation is running wild or the currency suffering. Then those who lose in housing will just lose in relation to other priorities. Also, the housing market at times simply drops for lack of interest. This may be difficult to imagine in the current climate, but it's not unheard of and can trigger a crash as well just because people have simply had enough of exploitation. Been there, done that.

If you've been reading the news of Irish auctioneering houses there have been many properties since the Summer with no bids at all. If you want to sell you have to tango with the buyers. Sold Two's experience is not a one-off.

Thursday, November 2, 2006 05:14PM Report Comment
 

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