More than 5,000 borrowers could be eligible for a Lifetime Loan
The banking industry has launched the second phase of the Dealing With Debt campaign, which is a welcome move for homeowners whose mortgages are held by credit servicing firms and who are seeking to switch their loan because of rising interest rates.
Its measures include a commitment from bank lenders to provide guidance on switching eligibility for homeowners whose mortgages are held by credit servicing firms.
There is also a commitment from credit servicing firms to work closely with the Money Advice and Budgeting Service (MABS) on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty.
Upwards of 80,000 homeowners have mortgages administered by credit servicing firms, with variable interest rates on the loans higher than 8% in many cases. It is our understanding that more than 5,000 of those customers are aged over 60, which means they may be eligible to switch to a Spry Finance lifetime loan even if they have previous issues with repayments or credit record.
Spry Finance Director, David Brady said: “The launch of the second phase of the Dealing With Debt campaign is a positive move for homeowners. It means they will now receive clarity from the banking industry around supports and switching eligibility criteria, which is important for those experiencing financial difficulties due to recent increases in interest rates.
“There is also an additional option available for those aged over 60 – with a Lifetime Loan increasing the variety of choice they have when switching their mortgage.”
The criteria for switching to a mortgage with a traditional bank includes requirements that customers must be making full capital and interest repayments on their mortgage, and must have no arrears on their home mortgage or any other lending in the past two years.
A Lifetime Loan is a mortgage that is secured on the value of a property and not on the homeowner’s income. A clean credit record is not necessary, neither is the ability to make monthly repayments – although the borrower has the choice to make optional repayments should they wish to do so and treat the loan like a standard mortgage without a term limit.
All Lifetime Loans come with a fixed interest rate for life, which means that there is cost certainty for the borrower about how the loan will grow, and the Spry Finance ‘No Negative Equity Guarantee’ is provided on all loans.
The Dealing With Debt campaign is a Banking & Payments Federation Ireland (BPFI) inititaitve. Find out more at DealingWithDebt.ie
For more information on a Spry Lifetime Loan contact us on (01) 5822570 or [email protected]
