cm Registered User
#1

Spoke a mortgage broker today (for the 1st time ever).

- Asked if there are any fees for me. Reply: flat fee of 200-250 EUR. Is this a normal price?

- Mentioned that I have been declined for income protection once and had a quick chat around life insurance. Advice: apply for life insurance now to see if they will approve / sort it out early in the process. Any comments on this?

- Waiver for life insurance: not an option as per broker as cover is mandatory. I read that it can be waived by the bank. Am I wrong?

- Survey: Was told that surverys (for the buyer, not the bank) are usually done for older houses, e.g. 20-30 yrs, but not for properties built recently. Any comments on this?

Liam D Ferguson Registered User
#2

cm said:
Asked if there are any fees for me. Reply: flat fee of 200-250 EUR. Is this a normal price?


Fees vary from broker to broker. Some don't charge fees. Others do.

cm said:
Mentioned that I have been declined for income protection once and had a quick chat around life insurance. Advice: apply for life insurance now to see if they will approve / sort it out early in the process. Any comments on this?


Good advice if there's a health issue. There may be reports required from your G.P. and possibly a medical. This can all take time.

I'd suggest that you give your broker full details of the medical condition from the outset. The broker can get opinions from different life insurance companies at the start.

cm said:
Waiver for life insurance: not an option as per broker as cover is mandatory. I read that it can be waived by the bank. Am I wrong?


It can be waived by the bank...but only at their discretion. If your income is a necessary part of the mortgage, they won't waive it.

cm said:
Survey: Was told that surverys (for the buyer, not the bank) are usually done for older houses, e.g. 20-30 yrs, but not for properties built recently. Any comments on this?


Matter of opinion. Personally, if I'm going to spend hundreds of thousands on something, I'd be happy to shell out €500 to get an expert look at it. But that's just me.

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cm Registered User
#3

Liam D Ferguson said:

I'd suggest that you give your broker full details of the medical condition from the outset. The broker can get opinions from different life insurance companies at the start.


I have to speak to my broker about the following. He gave me application forms to complete and mentioned that he would send them to the insurer once returned by me. I don't have my approval in principle yet. I wonder if looking into life insurance is too early at this stage.

Also, how do I avoid to enter into a contract with the insurer at this early stage? I maybe approved (whether loaded or not), but what if there's no mortgage (for whatsoever reason) at the end of the day? I'm not keen to pay for life insurance if there is no need. And is it possible to determine the amount to cover without a specific property in mind? Sorry for so many questions. Just trying to understand and am aware that I'll need to speak to my broker on this as well.

Liam D Ferguson said:

It can be waived by the bank...but only at their discretion. If your income is a necessary part of the mortgage, they won't waive it.


Did some reading on this. According to 126 (2) (b) of the Consumer Credit Act there are indeed exceptions. How come the law deals with exceptions, but the banks won't? What alternatives would I have if I'm declined for life insurance? Rent for the rest of my life?

Liam D Ferguson said:

Matter of opinion. Personally, if I'm going to spend hundreds of thousands on something, I'd be happy to shell out €500 to get an expert look at it. But that's just me.


Good point. Thank you!

L1011 Moderator
#4

cm said:

- Survey: Was told that surverys (for the buyer, not the bank) are usually done for older houses, e.g. 20-30 yrs, but not for properties built recently. Any comments on this?


I wouldn't risk not doing one on a newer property due to the poor standards applied by many builders during the boom.

killers1 Registered User
#5

cm said:
Spoke a mortgage broker today (for the 1st time ever).

- Asked if there are any fees for me. Reply: flat fee of 200-250 EUR. Is this a normal price?

There are plenty of good brokers out there who don't charge fees.

- Mentioned that I have been declined for income protection once and had a quick chat around life insurance. Advice: apply for life insurance now to see if they will approve / sort it out early in the process. Any comments on this?

You can complete the forms and have the proposal underwritten and accepted. Instruct your broker not to activate the policy until you say so. This way you can find out whether or not cover is available to you or not or whether there will be a loading on the premium. You can then decide to tell the broker to cancel or activate the policy further down the road.

- Waiver for life insurance: not an option as per broker as cover is mandatory. I read that it can be waived by the bank. Am I wrong?

Life cover is waived at the banks discretion once you can show you have been declined on medical grounds by an insurer. Bank's would even allow single applicants to waive life cover on medical grounds if the loan to value was lower than average.

- Survey: Was told that surverys (for the buyer, not the bank) are usually done for older houses, e.g. 20-30 yrs, but not for properties built recently. Any comments on this?


A survey should be done on any property irrespective of age.

#6

Don't pay a fee to a broker. The bank pays them a couple of grand to place the mortgage with them. If your application is straight forward you don't need a broker at all but they can provide value for border line applications.

One downside with a broker can be if you move house within a couple of years you can become liable for broker fees that the bank claws back from the broker.

Liam D Ferguson Registered User
#7

cm said:
Also, how do I avoid to enter into a contract with the insurer at this early stage? I maybe approved (whether loaded or not), but what if there's no mortgage (for whatsoever reason) at the end of the day? I'm not keen to pay for life insurance if there is no need. And is it possible to determine the amount to cover without a specific property in mind? Sorry for so many questions. Just trying to understand and am aware that I'll need to speak to my broker on this as well.


As killers says, you can apply to a life insurance company now to find out with certainty what terms you'll get. There's no obligation on you to take up the insurance company's offer. But it might be of help to you to know exactly what your position will be.

cm said:
Did some reading on this. According to 126 (2) (b) of the Consumer Credit Act there are indeed exceptions. How come the law deals with exceptions, but the banks won't? What alternatives would I have if I'm declined for life insurance? Rent for the rest of my life?


There's a few points here. (1) Being unable to get life cover at all is actually fairly rare (particularly among younger people), unless your medical issue has an impact on your potential life expectancy. Loadings are far more common. (2) Even if you do have a medical issue that prevents you from getting life cover in Ireland, there's a UK insurer (a Lloyds syndicate) that specialises in non-standard life insurance risks. Your broker should have access to them too. (3) Your lender will take the specifics of your mortgage application into account before deciding whether or not to waive the requirement for life cover [if (1) and (2) fail]. If you're borrowing a high percentage of the home value and are the only or main earner, then the bank is unlikely to waive the requirement for life cover on you as their other security isn't as strong. But if you've a big deposit and are borrowing with someone else who is earning, they might.

Liam D Ferguson Registered User
#8

Bigcheeze said:
Don't pay a fee to a broker. The bank pays them a couple of grand to place the mortgage with them.


Ha. I wish.

Of the two lenders that are actively lending for property purchases at the moment, ICS and AIB pay 0.5% of the loan amount with a maximum of €1,500. So for a mortgage of €150,000, they pay €750. (Not complaining, by the way - just dispelling the myth that it's a "couple of grand".) They pay nothing for approved applications where the loan isn't drawn down (e.g. purchase/sale falls through) or for declined applications. Big percentage of applications fall into the latter two categories at the moment.

Bigcheeze said:
One downside with a broker can be if you move house within a couple of years you can become liable for broker fees that the bank claws back from the broker.


Banks claw back a broker's commission if you redeem the mortgage within three years of getting it. A broker can only claw this back from a client if they have an agreement with the client to do so.

If you get the new mortgage with the same broker, the broker may not pass on the claw back to you at all.

killers1 Registered User
#9

Bigcheeze said:
Don't pay a fee to a broker. The bank pays them a couple of grand to place the mortgage with them.


Ha. I wish.

Of the two lenders that are actively lending for property purchases at the moment, ICS and AIB pay 0.5% of the loan amount with a maximum of €1,500. So for a mortgage of €150,000, they pay €750. (Not complaining, by the way - just dispelling the myth that it's a "couple of grand".) They pay nothing for approved applications where the loan isn't drawn down (e.g. purchase/sale falls through) or for declined applications. Big percentage of applications fall into the latter two categories at the moment.

Bigcheeze said:
One downside with a broker can be if you move house within a couple of years you can become liable for broker fees that the bank claws back from the broker.


Banks claw back a broker's commission if you redeem the mortgage within three years of getting it. A broker can only claw this back from a client if they have an agreement with the client to do so.

If you get the new mortgage with the same broker, the broker may not pass on the claw back to you at all.


+1 Liam. In 10 years I've never asked a client to repay commission clawed back for redeeming their mortgage.

Also Bigcheeze if you're fully familiar with the housebuying process and pitfalls & all bank rates & credit policies by all means undertake the process yourself. If you're not then I suggest availing of a free expert to help you get the amount you need at the cheapest rate on the Market and take you through the whole process from start to finish and beyond...

cm Registered User
#10

Liam D Ferguson said:

There's a few points here. (1) Being unable to get life cover at all is actually fairly rare (particularly among younger people), unless your medical issue has an impact on your potential life expectancy. Loadings are far more common. (2) Even if you do have a medical issue that prevents you from getting life cover in Ireland, there's a UK insurer (a Lloyds syndicate) that specialises in non-standard life insurance risks. Your broker should have access to them too.


Thank you Liam. In fact, I don't have a life-threatening illness. It's anxiety-related, but nothing major. I guess I'm too pessimistic and will be loaded. Also I guess that I need to go through the process to see what happens rather than thinking what can go wrong along the way. Last thing: Would you mind telling me the name of the UK insurer (by PM or posting)?

Liam D Ferguson Registered User
#11

Unless the condition is fairly severe (several incidents, ongoing medication, some hospitalisation) or you are awaiting tests or treatment right now, I'd say you should be able to get life cover. In fact, if your condition is now under control, you could possibly also get Income Protection, albeit with an exclusion for anxiety-type illnesses.

Although by the sound of things you're unlikely to need it, the UK company is http://www.pulse-insurance.co.uk/ - they deal with some Irish brokers.

cm Registered User
#12

Liam D Ferguson said:
Unless the condition is fairly severe (several incidents, ongoing medication, some hospitalisation) or you are awaiting tests or treatment right now


None of these applies. I guess I'm simply too pessimistic. Thank you for your detailled replies!

Liam D Ferguson Registered User
#13

cm said:
None of these applies. I guess I'm simply too pessimistic. Thank you for your detailled replies!


Income Protection and Life Insurance are underwritten very differently. Statistically we're all a lot more likely to be sick before retirement age than we are to die before retirement age. So Income Protection is consequently underwritten a lot more strictly.

Or to put it another way, being declined for Income Protection does not imply that you'll be declined for life insurance.

engineermike Registered User
#14

cm said:
Spoke a mortgage broker today (for the 1st time ever).

- Asked if there are any fees for me. Reply: flat fee of 200-250 EUR. Is this a normal price?

- Mentioned that I have been declined for income protection once and had a quick chat around life insurance. Advice: apply for life insurance now to see if they will approve / sort it out early in the process. Any comments on this?

- Waiver for life insurance: not an option as per broker as cover is mandatory. I read that it can be waived by the bank. Am I wrong?

- Survey: Was told that surverys (for the buyer, not the bank) are usually done for older houses, e.g. 20-30 yrs, but not for properties built recently. Any comments on this?


- hi OP, the older the property the issues are usually age releated and / or modifications to the orignial home,
- Newer property, poor 'self regulatory' Irish building system and the speed at which homes where built during the boom are the cause of most of the problems in the newer housing stock.
- Surveys atm - are in and around 300euro mark, money well spent for any type of property.
regards,
Mike F

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