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4,000 Galway homeowners switch to ‘interest only’ mortgages

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Date Published: 11-May-2011

BY ENDA CUNNINGHAM

More than 4,000 financially-troubled homeowners in Galway have switched their mortgages to ‘interest only’ repayments as they struggle to save their properties.

But the Money Advice and Budgeting Service (MABS) has warned that many are ‘hoping against hope’ when it comes to meeting their debts.

And concerns have been expressed that by switching to interest only repayments, homeowners will leave their family with a legacy of debt.

According to new figures from insurer Caledonian Life, in the region of 4,200 mortgage holders in Galway have recently switched from ‘capital plus interest’ mortgage repayments to interest only – but while payments are substantially reduced, the lump sum remains untouched, which can lead to crippling financial difficulties when a property is in negative equity.

“It is estimated that approximately 4,200 mortgage holders in Galway have switched to interest only mortgage payments to assist with afforability, but these homeowners may now be leaving their families open to thousands of euro of legacy debt.

“The most recent report from the Financial Regulator would suggest that this switch has become a common cost-saving strategy, as the public attempt to deal with affordability issues in the current recession,” the Caledonian report reads.

A spokesperson for MABS told the Connacht Tribune that lenders have an effective ‘duty of care’ to mortgage holders and must provide them with the most suitable solution to their money problems.

“The Code of Conduct [on mortgage arrears] outlines the responsibilities that the mortgage provider has in relation to customers – they have to outline all available opions and assist the consumer in choosing the best option. Any agreement should be reached in the best interest of the mortgage holder, and hopefully that’s what is happening.

“The objective is to keep people in their homes, but some people are in a situation of hoping against hope. Hoping that the architecture around mortgage default will change, or that a job will be found. We’re in a transition phase and there is a lot of uncertainty,” he said.

Meanwhile, a local insurance broker has warned that unless mortgage protection policies are renewed to reflect changes to mortgage repayments, families could be left ‘in the red’ for years to come.

Read more in today’s Connacht Tribune

Galway Bay FM News Archives

Galway has country’s largest population of young people

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Date Published: 07-May-2013

Galway has a population of young people which is more than twice the national average.

According to information gathered by the Central Statistics Office, Galway’s population of 20 to 24 year olds is more than twice the national average.

The number of 25-34 year olds in Galway is also more than the norm nationally, with the two main colleges thought to be the main reason.

However immigration in Galway is much higher than in other areas at 19.4 percent, compared to the national average of 12 percent.

 

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Galway Bay FM News Archives

Call for direct donations to city charity shops

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Date Published: 07-May-2013

A city councillor is encouraging people to donate goods directly to charity shops.

It follows allegations of thefts from clothes banks in Galway and across the country in recent months.

However, cameras are in place at some clothes banks and surveillance is carried out by local authorities.

Speaking on Galway Talks, Councillor Neil McNeilis said the problem of theft from clothes banks is widespread.

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Galway Bay FM News Archives

Galway ‘Park and Ride’ could become permanent

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Date Published: 07-May-2013

A park ‘n’ ride scheme from Carnmore into Galway city could become a permanent service if there is public demand.

That’s according to the Chief Executive of Galway Chamber of Commerce, Michael Coyle.

The pilot scheme will begin at 7.20 next Monday morning, May 13th.

Motorists will be able to park cars at the airport carpark in Carnmore and avail of a bus transfer to Forster Street in the city.

Buses will depart every 20 minutes at peak times and every 30 minutes at offpeak times throughout the day, at a cost of 2 euro per journey.

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