Experience of trying to switch a non-tracker from a vulture fund?

Brendan Burgess

Brendan Burgess

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I want to know if the BPFI initiative has made any difference.

1) Have you been paying very high rates to the likes of Pepper and have you tried to switch to a mainstream lender?
2) When were you last in arrears?
3) Have you been paying full interest and capital for at least two years?
4) How easy/hard was it to switch?
5) Did you go directly to the banks or did you apply via a broker?

I am not interested in hearing about people who were with vulture funds who were never in arrears. They would have been able to switch just as easily as a customer of any mainstream bank.

And I want to focus on owner occupied homes , so not buy to lets.

Brendan
 
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The lenders all subscribe to these criteria as set out in this document:




How do I know if I can switch?

Mortgage lenders recognise that some customers may have had a difficult period at some time in the past, which resulted in their mortgage going into arrears or being on an alternative repayment arrangement (e.g., reduced repayments). However, lenders also understand that over time a customer’s financial circumstances may have changed. If your mortgage is not in arrears and you are making full capital and interest repayments, you may be eligible to switch to another lender.

To start the discussion on switching with your mortgage lender or broker, check the following:

• Full repayments: Are you repaying capital and interest on the full outstanding mortgage i.e., there is no split/warehoused element of the mortgage and the mortgage is fully up to date?

• Credit history: Is your credit history, i.e., Central Credit Register (CCR) record, showing a clean repayment track record, without arrears for at least the past two years?

• Sustainable income: Can you demonstrate that you have sustainable income which is adequate to repay the mortgage in full over the lifetime of the loan?

• Bank account performance: Do you have a satisfactory bank account performance i.e., no unpaid items such as direct debits or standing orders and all other loans/debts are up to date?

• Loan-to-value: Is the current Loan-to-value (LTV) of the mortgage less than 90%? i.e., the value of your mortgage cannot be more than 90% of the value of your home?

• Financial difficulty resolved: Have the circumstances that gave rise to any previous financial difficulty been resolved?

Once you meet these initial criteria, your application will be assessed on a case-by-case basis in line with the credit policy of the individual lender.* For more information on how to get a copy of your credit report from the Central Credit Register, please visit www.centralcreditregister.ie.
 
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I am a 71 year old, 80K mortgage, some past arrears but got back up to date. Reasonable pension income.

I managed to switch, but the main lenders said I couldn't switch and didn't qualify for a mortgage as I was 71. I did have some arrears, but got caught up. My mortgage wasn't that large but significant increases in the rate over the last 18 months had me looking to move plus the lump sum payment was coming due. Balance was €80k and that also along with previous missed payments seemed to put off some of the lenders.

The mortgage was an interest only and I needed to re-finance the lump sum (80K). No option to extend. I remortgaged with Spry Finance. They allowed me to switch and let me pay interest only for first year and then my plan is pay down mortgage with them over 10 years with a fixed rate of 6.25%. Which was cheaper than the rate I was paying on the interest only. Great result, as otherwise I needed to sell, something I really wanted to avoid.
 
Thanks very much for that detailed response. It is very helpful. I had not thought of switching to Spry!

Can I clarify a few details.

1) Who was your original lender?
2) Which vulture fund were you with?
3) When and why was it sold to a vulture fund?
4) When were you last in arrears?

Dublin Walker said:
They allowed me to switch and let me pay interest only for first year
Click to expand...

I thought that Spry would allow the interest to roll up and you didn't have to make any repayments?
Of course, you should clear the mortgage if you can afford to, but are you sure that it's interest-only for the first year?

Brendan
 
Original Lender was Bank of Scotland and I was with Pepper. Was sold a long time ago, maybe over 5/6 years at this stage. I had some arrears towards end of last year but go back on track.

The Spry mortgage allows flexibility to service the mortgage or not service it. I have chosen to pay the interest for the first year (my choice) and then my plan is to pay it down over the next 10 years. The company said this was no problem. It's all signed and done at this stage.
 
I haven’t been able to switch.


1) Have you been paying very high rates to the likes of Pepper and have you tried to switch to a mainstream lender?

Yes paying 8% with Pepper tried BOI but no joy as I am sole income with 2 kids

2) When were you last in arrears? In 2015

3) Have you been paying full interest and capital for at least two years? Only paying full interest and capital since April 2023.

4) How easy/hard was it to switch? Can’t switch as per above

5) Did you go directly to the banks or did you apply via a broker? Broker and Bank but as only income I can’t move
 
We have made inquiries but advice from one High Street bank was its best wait until our FSPO Complaint against Start is completed .
We got another letter today re a 0.5% further rise to 6.9% but taking that aside we are in a good place to switch as the arrears has fallen off our CCR report as we capitalised our arrears in 2018 .
We will look further after Christmas but once we are ready there should not be a problem , I think the advice re the complaint has merit as if we switch now Start get off the hook to an extent.
 
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