Sunday 17 December 2017

Home loans, credit cards, motor financing, current accounts -- what your next step should be

Q: I have a mortgage with Halifax/Bank of Scotland (BoSI). What will happen now?

A: The bank will continue to honour your mortgage contract under the existing terms.

But there will be no new lending, so if you want a top-up on your existing home loan or want to consolidate loans into your mortgage in future that option will not be open to you.

Q: My mortgage is in arrears. What now?

A: The same rules apply as is the case with other lenders. You need to contact the bank immediately and see if you can come to some arrangement.

Like all lenders here, BoSI is bound by the regulator's Code of Conduct on Mortgage Arrears.

This means that no legal action can be initiated for a year to repossess your home if you engage with your lender.

The lender is also bound to help you by offering alternative repayment options such as extending the term or allowing a temporary payment break.

Q: I am in negative equity. What can I do now?

A: Unfortunately, not a lot. Other banks will not allow you to switch your mortgage to them if the value of your mortgage is greater than the value of your home.

Q: What happens if I have applied for a mortgage?

A: If you have not yet received an "approval in principle" letter and want to go ahead with the application, you have 30 days to supply the necessary documentation and sign up.

However, you may be wiser to speak to a broker to see if another lender would be a better bet.

Q: What will happen to my current account?

A: You have three months -- until May -- to close your current account. Start now to find another bank that will take you on as a current account customer.

The bank has some 50,000 current account customers. They were attracted to the Scottish bank because it was paying interest of 5pc on amounts up to €1,500 provided the customer remained in credit.

Q: If I switch my current account to another bank, which one has the best offer?

A: Postbank has one of the best offers for current accounts. Postbank, which is a joint venture between An Post and European bank BNP Paribas Fortis, operates in 1,000 post offices.

Its current account has low charges and few of them compared with other banks.

Its overdraft rate is 12.55pc, with a surcharge rate of 6pc.

Q: I have an outstanding balance on my credit card. What will I do?

A: The bank will no longer operate credit cards from May. You need to switch your credit card business to another provider, if you can.

If you have an outstanding balance and you find other providers do not want you business, then Halifax will covert your balance into a personal loan and you will just have to pay it back that way.

You would be wise to check out your credit union also as many of them have arrangements to help you eradicate credit card debts.

Q: I have investments, a motor loan and savings accounts. What will happen?

A: Halifax is closing its Flexi-Saver, Child Saver and Monthly Saver accounts by May. But investment products will be unaffected by the closure of retail banking. Motor loans are not impacted either.

Q: Are there any protections for mortgage customers now that Halifax is closing its retail operation here?

A: The bank is regulated here by the Financial Regulator and so is subject to its rules.

It must observe the Consumer Protection Code that demands that it deal with you fairly and act in your best interests.

Q: I had applied to open a Halifax current account. What happens now?

A: The bank will write to you in the coming days to tell you that it will not be proceeding with the offer to let you open a current account.

If you had started to switch from another bank, then you should contact Halifax now to cancel any switching arrangements that you had begun.

Telephone 1890-818181 for more details.

Irish Independent

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