Banks saying no to home loans

TWO out of three banks are declining mortgage applications making it increasing difficult to secure home loans.

Paul Kinnane, deputy president of the Irish Brokers Association said that most mortgage lenders are claiming they are open for business but in his experience they are declining applications because of applicants income or the loan-to-value ratio.

“With the banks taking such a cautious view on property values, it is extremely difficult for anyone trying to buy,” he said.

Mr Kinnane said lenders that are active will only accept certain applicants adding that it’s imperative prospective homebuyers “knock the door of every lender”.

Director of the Irish Mortgage Corporation, Frank Conway said banking is still in a state of flux and said there is a share of activity but in reality, the problems continues to be consumer hesitancy to enter the market.

He said that the take-up on approved mortgage applications is “very low”.

“I think many prospective buyers are simply waiting out until the market begins to improve again,” he said.

He said there are three categories of players in the market at the moment: players, substitutes and spectators.

“The players are those who are on the pitch and approving mortgages up to 92% loan to value, those are Bank of Ireland/ICS, AIB and EBS,” he said.

“In the substitute category, they are at the game and nearly ready to play, those lenders are approving mortgages up to 90% loan-to-value.

“In the final category, we have those spectators in the stands, watching the game. They require 20% deposits and lend up to 80% loan-to-value,” he added.