Home economics: Sinead Ryan answers your property questions
We got a letter from KBC offering a reduced interest rate on our mortgage if an assessor values the 'loan-to-value' ratio of the house under 50pc.
I think it would be, but my wife isn't sure. We have the mortgage six years. We're also a bit suspicious about the bank contacting us to save us money, especially in light of the tracker scandal! Are we missing something and are we in danger of the mortgage contract being changed?
A. Well, the letter is legitimate. A number of banks are recognising that holding on to loyal customers who have equity in their homes, and therefore most at risk of shopping around for better deals, is important. Permanent TSB carried out a similar exercise last year and many borrowers did get a lower rate, and of course, lower monthly repayments. It is worth first finding out what the terms of the offer are, to see if it is good value. Among the questions I'd be asking are:
* Who pays for the valuation to assess the house's worth? Is it you, or the bank? How much will it cost if it is you? Can you get your own assessor if you're not happy with the decision?
* What rate will be available for the loan-to-value (LTV) determined? You should be offered better rates as the LTV decreases.
* Are you bound into a fixed term should you accept the rate, or does the mortgage remain variable? This may not concern you, but you should be told one way or the other. Many banks offer lower fixed rates these days, but you are locked in for three to five years.
* Are there any hidden fees or charges involved in the paperwork to amend the mortgage contract?
Q. We bought a house just before Christmas. We had a full survey done, and an issue with damp got sorted, with the vendor reluctantly adjusting the price to accommodate.
We went back to look at it a few days before completion and everything was fine. However on the day we moved, curtain poles and brackets, a bathroom cabinet, a pot rack in the kitchen and even the light bulbs had all been removed, some of which damaged the plaster work.
In addition, the garden shed, which we assumed was part of the sale, is gone and two shrubs have been uprooted. The estate agent is washing his hands of this; is there anything we can do?
A. This must have been very annoying, especially as you clearly viewed the house with all of these fixtures intact, and it will cost a considerable amount to replace everything, not to mention the petty-mindedness of the vendor.
I asked solicitor Susan Cosgrove, of Cosgrove Gaynard for her advice on this tricky issue.
She said: "Contents are listed in a section of the contract called 'non title' information.
"If they are not listed, the vendor is entitled to remove them. However, they are not allowed to remove fixtures or damage the property when removing items.
In this case, the curtains, curtain poles, pot-rack etc, were all contents, even the lightbulbs, unfortunately.
"However, they should not have damaged the plasterwork and so I would suggest going back to your solicitor in relation to this."
I'd add that no estate agent wants a bad reputation. You are now living in his area, presumably in a road where other houses may come up for sale; so you ought to inform him that you are progressing the matter legally.
He may be able to talk to the vendor for you to save money and embarrassment all round.
The Ryan Review
I've never been a fan of gimmicky 'cash -back' offers or other incentives offered by banks to try and get mortgage business.
The lure of two or 3pc of your loan amount back in a cheque can seem attractive, but it's often at the expense of lower interest rates or an actual reduction in the loan amount. In other words, it's short-termism over the greater good.
Most borrowers have saved and waited a very long time to get to purchase, and can be swayed by cash offers, cut-price insurance or free banking, all of which are on offer currently. Yet, mortgage interest rates here average 3.2pc, while other European banks, borrowing from the same source, pass on rates of just 1.83pc. Yes, there is a cost to lending here, mainly due to the glacial pace of repossessions and the need to prop up loss-making tracker books, but even so…
Fianna Fáil has introduced a bill to ban these incentives. Finance spokesman Michael McGrath told me: "Some banks are using cash-back offers to camouflage exorbitant mortgage rates. While cash-backs may be attractive on the surface, I believe they should be removed from the market for the next three years at least so they can be properly assessed and as a means to reducing actual mortgage rates in Ireland. I am confident that removing cashback offers from the market will bring down rates further."
I'm not, although I welcome his efforts. He'll also need parliamentary support to get the bill through. You'll recall, the one to cap interest rates fell at the first hurdle.
Perhaps a clear understanding by borrowers, or, hey ho, a choice, showing the effect, over the entire term, of say, a quarter percent interest rate drop instead of 2pc cash now, would help them make up their minds.