Friday 17 November 2017

The Punt: Mortgage splitters beware

THE Government has repeatedly turned down requests for heavily indebted people to have early access to their pensions to pay down their borrowings.

Employers' body IBEC, the Irish Pensions Funds Association and various backbenchers think it a good idea.

But another branch of the State may end up getting its hands on your pension anyway -- the banks.

If you are in trouble with your mortgage and opt for what is known as a split mortgage, you may find the pension you are hoping to access when you retire could be used to clear the mortgage.

A split mortgage is where some of the principal is 'parked', and you make payments on the rest.

It is a way of making monthly repayments more manageable.

AIB and EBS will not charge interest on the parked element, while Permanent TSB will charge some interest on this. Bank of Ireland will charge full interest on the parked part of the mortgage.

But how do you eventually deal with the warehoused or parked part of the mortgage?

This is where you end up losing your pension lump sum, as first reported by this newspaper months ago.

If there is still an amount owed on the parked sum when you get to retire, then the bank may insist that the borrower uses their pension to clear it.

So those taking on a split mortgage have been warned: pension poverty awaits.

Money grows on family trees

IF you didn't know that family history was big business, you do now.

The news that the genealogy company Ancestry.com is to sell itself to the private equity firm Permira for $1.6bn (€1.2bn) shows just how lucrative tracing a family tree can be.

Spurred on by television shows such as 'Who do you think you are?', the number of amateur genealogists has soared in recent years.

Around two million people pay Ancestry.com to access family trees, and genealogical records around the world.

The company has been around since 1983 but only went public in November 2009, and it has been a good buy for investors, more than doubling its share price since.

In May, however, it was hit by the news that the US version of 'Who do you think you are?' was being cancelled and worries growth would slow.

The stock had been stagnant for some time, and with few obvious signs of growth, this looks like a good time to sell.



Mobile numbers don't add up

TODAY will be an antsy one for investors in Facebook. With the company reporting its third quarter results after the US markets close this evening, it will be interesting to see how the company's share price goes throughout the day.

The social network is trading at almost exactly half its IPO price of $38 (€29) but the presumption on Wall Street is that it has found its natural floor, for now.

The market consensus is for net income of around $284m for the quarter, which would be a solid number in itself.

The key, however, will be buried in Facebook's financial statements -- namely, how it is faring in the mobile space.

The company estimates that more than half of its 1 billion users access the site on their phones, and they have indicated that they are struggling to work out a revenue model for that sector.

Google missed forecasts last week because of issues with converting mobile users to revenue and Facebook may well be facing the same problem.

Mark Zuckerberg's baby is still an outstanding company but if its numbers don't measure up tonight, get ready for a wave of 'Facebook is overvalued' stories.

Irish Independent

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