Home economics: Sinead Ryan answers your property questions
We have a mortgage on our property which is 10pc of its value. As pensioners we cannot extend the term to reduce monthly repayments but we have a guaranteed monthly income, which allows us to meet our day-to-day expenses. However we would like to have a reserve for unusual expenditure. Can we do this using our property as leverage? We are not interested in life products which hit the market before the recession but understand that mortgages are freely available in the UK up to your 85th year.
A. Your email doesn't specify the nature of the 'unusual expenditure', so I can't advise on whether a re-mortgage is the correct option for you. In any event, Irish banks are extremely reluctant to lend to pensioners, particularly where it is asset-backed by property.
The 'life products' are the old equity release loans flogged by lenders before the recession. These were a terrible idea as they relied on pay back after the home owner died, but in the meantime, rolled up compound interest at high rates, and sometimes the loan was higher than the property value, leaving families with debts. They are no longer available in Ireland, thankfully.
You could always approach your bank, or indeed a credit union for a personal loan based on your income, which as you say, is guaranteed. It would clearly be a smaller loan, but I don't know what you need it for. If it's a bit of travel, or changing the car, you may well be able to make a case for it. Expect to pay interest of 6-10pc. The alternative, if polarised suggestion, is to trade down and release your own equity that way, if you can find a smaller, cheaper property to live in. There is no tax implication in so doing.
I am one of three siblings in our 20s. Our father got remarried after our mother died to a woman in her 40s (he is 59), and she has just announced she is pregnant with their child. We like her well enough, but are concerned that if something were to happen to him (he had a mini stroke a few years ago), she and the baby would be entitled to his assets. Their house wasn't our family home, but he bought it from its sale - she contributed nothing that we know to it. He would be worth at least €700,000 with all assets included. What are her rights now?
Blended families are a complex business. The first thing I would do is find out if your father has made a will. It is absolutely essential he does so and may (and should) precipitate a conversation about the subject.
The Succession Act 1965 makes provisions for his second wife and all children, but a will determines how an estate is distributed, and this alone will avoid years of legal wrangling and the associated costs.
Gráinne Butler, of Orpen Franks Solicitors explains the situation. "In the event that your father dies without a will (i.e. Intestate), his wife is entitled to two-thirds of his assets and his children, a third divided between them equally. If there is only one child of the second marriage, you, your full siblings and your half-sibling would each be entitled to one-twelfth of the entire estate.
"If he leaves a will (Testate), he may dispose of his estate in any way he wishes, subject to fulfilling certain legal obligations. He must make provision for his wife, who has an entitlement to one-third of his estate, and if she receives less than that in the will, she can instead claim her legal right share to this extent.
"This does not mean the children are entitled to the remaining two-thirds. The courts look at the historical relationship between parent/child, what financial support was provided together with the children's current means and needs. It could well rule that you and your full siblings are entitled to a smaller share, given the age of the half sibling".
The Ryan Review
The latest policy spread from the Central Bank should be called: "I-can't-believe-it's-not-Low-Low." It's not so much a butter substitute as a buttering-up substitute.
The bean counters have spent weeks ensconced in the marketing department of our banks reviewing their advertising, specifically that which is encouraging customers to switch mortgages.
They found they didn't much like what they saw, and banned terminology such as "lowest interest rate" or "low, low interest", or the ones that promise jam on top in incentives if you'll only shift your debt to them.
It seems that 75pc of planned advertising (billboards, posters, TV and radio) had to be pulled or amended under order of the new Director of Consumer Protection Grainne McEvoy.
I'm not sure borrowers need so much minding. We've all become far savvier at reading between the lines of ads, especially those of banks, and shopping around for what we need. After all, there are only a handful of lenders out there.
The clampdown also sees extra measures being taken about cooling off periods on fixed rates (now 60 days), and a requirement to tell customers about lower rates it may have if their loan-to-value band changes (this is good as most people haven't a clue they can switch within their own lender for this reason). In addition, showing 'total interest payable' is now a requirement, which is how personal loans are compared, and any incentives must be given to existing rather than just new customers.
The bland billboards will be worth it.