| 9.6°C Dublin

Banks to extend their approvals for home loans

 

Close

New guidelines: Brian Hayes said that mortgage approvals can be kept open by lenders

New guidelines: Brian Hayes said that mortgage approvals can be kept open by lenders

New guidelines: Brian Hayes said that mortgage approvals can be kept open by lenders

Home buyers who have been approved for a mortgage are to be given more time to find a property to buy due to the seizing up of the market.

But the Banking and Payments Federation Ireland (BPFI) warned there may be delays issuing home loans.

People who are being hit with an income shock from the pandemic were told by the banking body that their lender can keep their application open on the system for a period of time when it will be reviewed.

A report from Davy on Friday said residential property transactions were "starting to collapse".

It said the Property Price Register update last week added only another 700 transactions, around 40pc lower than the weekly average transactions through January and February.

This was likely to lead to a situation where the CSO would be unable to produce property price inflation figures for April.

"For those who have a mortgage approval but who have unfortunately experienced income loss due to Covid-19, a lender can keep this application open on its system for a period of time after which it can be reviewed and the customer can provide an update on his/her employment and income situation," said Banking and Payments Federation chief executive Brian Hayes.

He said this approach was in the interests of both customers and lenders to ensure that mortgages were not issued to those who cannot now or in the immediate future afford them.

He added that delays to the application process could arise where valuers are not able to conduct a full inspection of a property or legal practitioners can't access everything they need to complete all the steps in buying a property.

"At whatever stage applicants may be in the mortgage process, should they have any concerns we would encourage them to read the information available on the BPFI's website in the first instance, and if they have any further questions beyond that to contact their lender who will advise them on their particular situation," Mr Hayes said.

The new guidelines insist that banks remain open for business for new mortgage applications and are operating "as effectively as circumstances allow".

BPFI has produced a frequently-asked questions booklet, which can be found at bpfi.ie.

Meanwhile, the Irish Congress of Trade Unions (ICTU) has welcomed the fact that people with a Rebuilding Ireland mortgage from their local authority are being offered payment breaks.

Irish Independent