Brendan Burgess
Founder
- Messages
- 52,223
Update 25th May 2006. Although the Irish Nationwide could legally give windfalls to anyone who takes out a mortgage with them this year, they would be allowed to limit it to people who had mortgages for two years, so I am withdrawing this advice to switch loans to the Irish Nationwide. However, if the deal is good, it is worth taking out a new mortgage with them, more in the hope that you will get a windfall,rather than the expectation.
Brendan
A friend of mine is borrowing around €250k to buy his first house.
He used three different brokers, none of which suggested the Irish Nationwide. I told him to get a quote directly from the Irish Nationwide.
He got the best available multiple of his salary.
He got a 3.19% rate fixed for one year.
He got a 40 year loan
If the Irish Nationwide demutualises after 31 December this year, he will get a windfall - probably around €12k. Update 24 May 2006. The Ombudsman has ruled that some penalties charged by the Irish Nationwide were invalid and unlawful. This could set a precedent that other penalties they charge are unlawful. If the Financial Regulator orders them to refund people going back 20 years, the windfall could be a lot less than €12k. It could also take a few years to sort out the mess before the Society is ready to be sold.
The meeting of members to approve the resolution must be held before the 31 December 2006 for a borrower to lose out.
To achieve this the following must happen:
The government must publish the new Building Societies Bill - Say April 2006
The Dáil must pass the legislation - Say June 2006
The Society must design a conversion scheme - Say August 2006
The Society must give up to 6 months notice to IFSRA - Say December 2006
The Society must announce the scheme
The Society must give at least 21 days notice to the members of the meeting to approve the scheme
The meeting must take place before the 31 December 2006
It's just impossible to see all of this happening before 31 December 2006.
Note that for savers, they must have held their accounts for two years prior to the announcement of the scheme.
This seems like a no-brainer to me. What is the worst that can happen?
1) The Irish Nationwide demutualises before 31 December and he gets no windfall
2) The demutualisation takes place after 31 December but mortgage holders get less than €12k
3) The legislation changes the rights of borrowers.
So what, he can switch free of charge after one year to Ulster Bank, The EBS, IIB or NIB.
When he went back to the brokers, one said that they would have nothing to do with the Irish Nationwide because of its reputation. The other two told him, mistakenly, that he would have had to have the mortgage for at least two years to qualify.
Brendan
Brendan
A friend of mine is borrowing around €250k to buy his first house.
He used three different brokers, none of which suggested the Irish Nationwide. I told him to get a quote directly from the Irish Nationwide.
He got the best available multiple of his salary.
He got a 3.19% rate fixed for one year.
He got a 40 year loan
If the Irish Nationwide demutualises after 31 December this year, he will get a windfall - probably around €12k. Update 24 May 2006. The Ombudsman has ruled that some penalties charged by the Irish Nationwide were invalid and unlawful. This could set a precedent that other penalties they charge are unlawful. If the Financial Regulator orders them to refund people going back 20 years, the windfall could be a lot less than €12k. It could also take a few years to sort out the mess before the Society is ready to be sold.
The meeting of members to approve the resolution must be held before the 31 December 2006 for a borrower to lose out.
To achieve this the following must happen:
The government must publish the new Building Societies Bill - Say April 2006
The Dáil must pass the legislation - Say June 2006
The Society must design a conversion scheme - Say August 2006
The Society must give up to 6 months notice to IFSRA - Say December 2006
The Society must announce the scheme
The Society must give at least 21 days notice to the members of the meeting to approve the scheme
The meeting must take place before the 31 December 2006
It's just impossible to see all of this happening before 31 December 2006.
Note that for savers, they must have held their accounts for two years prior to the announcement of the scheme.
This seems like a no-brainer to me. What is the worst that can happen?
1) The Irish Nationwide demutualises before 31 December and he gets no windfall
2) The demutualisation takes place after 31 December but mortgage holders get less than €12k
3) The legislation changes the rights of borrowers.
So what, he can switch free of charge after one year to Ulster Bank, The EBS, IIB or NIB.
When he went back to the brokers, one said that they would have nothing to do with the Irish Nationwide because of its reputation. The other two told him, mistakenly, that he would have had to have the mortgage for at least two years to qualify.
Brendan
)