Plans to buy homes by number of people will collapse after Finance Ireland announced a huge rate hike effective immediately.
People hoping to secure home-buying deals have told how they were forced to go out of business after Finance Ireland failed to give timely notice that its mortgages would become so expensive.
Buyers who might have been able to afford a five-year fixed rate of 3.75 percent now can’t afford repayments because that rate is 4.75 percent, killing hundreds of home buying deals.
Changers and new buyers in the process of getting a new mortgage were not briefed on Monday’s announced rate hikes, which are so high that these people cannot afford the mortgages.
Executives often give those just getting a mortgage four weeks to submit documents before higher interest rates go into effect. Finance Ireland told brokers that if potential borrowers didn’t have an application for money by last Friday they wouldn’t get the lower interest rates.
One person about to close a home purchase deal said: “I have a loan offer from Finance Ireland. I’m buying a new house. We hope to be able to close in the coming weeks. Our lawyer sent the money request on Monday. You will not redeem the credit offer. I now have two weeks to seek approval from another lender. Shameful behavior by an allegedly regulated institution.”
Mark Coan of mortgage brokerage service MoneySherpa.ie said Finance Ireland’s rate hikes of 1.5pp to 2pp were not unexpected.
“But the speed at which they’ve pulled down the shutters on customers who are currently trying to switch or buy is very tough.”
He said only those whose lawyers have the request for review by the end of last week will avoid the hikes. Mr Coan said Finance Ireland currently takes at least 33 days for credit decisions and 20 days for an assessment. “So thousands of customers are likely to miss out due to Finance Ireland’s self-inflicted delays.”
“In my opinion, there is no excuse for treating customers like this. They knew interest rates would rise due to ECB decisions weeks ago and could have granted a grace period but decided not to,” he said.
Finance Ireland was asked why it had paid so little attention to those dealing with mortgage drawdowns.
It said that after discussions with brokers, it is now giving people a one-week extension to withdraw funds at the lower interest rates in place.
But her lawyers have yet to file a request for funds by last Friday.
“While we regret the impact of this short notice period on customers, these rate increases are unfortunately necessary given the significant increase in funding costs over the past few weeks,” said Finance Ireland.
The central bank was asked for comment on Monday but did not respond.
https://www.independent.ie/business/personal-finance/property-mortgages/disgraceful-behaviour-anger-as-huge-rate-rise-by-finance-ireland-means-buying-plans-are-scuppered-for-many-42044072.html ‘Disgraceful behaviour’ – Anger at Finance Ireland’s huge rate hike means buying plans fail for many