Homeowners in Waterford city and county must ‘get tough’ given the current trend of monthly price falls in an increasingly harsh property market.

Homeowners in Waterford city and county must ‘get tough’ given the current trend of monthly price falls in an increasingly harsh property market.

That’s the contention offered by the Select Finance Group following its recent review of the struggling sector.

As reported last week, the credit drought hitting prospective mortgage applicants has made it more difficult than ever to acquire a home.

Transferring mortgages from one financial institution to another can prove equally as difficult, putting the onus on mortgage holders to become savvier when dealing with lenders, said Select’s Managing Director Trevor Grant.

“The average house price in Waterford currently stands at approximately €273,000 down over seven per cent on this time last year,” he said, referring to the latest Daft.ie House Price Report.

“For those with mortgages on properties which are decreasing in value now is a very worrying time,” added Mr Grant.

“It is imperative that people keep their repayments as low as possible in an effort to manage their personal finances effectively…

“If people are unhappy or unsure as to whether or not they are getting the best deal I would advise them to engage the services of an independent mortgage expert who will provide impartial and comprehensive advice.”

So what should mortgage holders acquaint themselves with?

Trevor has urged mortgage holders throughout Waterford to be wary at this delicate fiscal time and offered the following observations to homeowners.

* “In many cases lenders are offering expensive rates to those customers maturing from fixed or discounted rates. Look at the alternatives with the other institutions, before accepting any offer from your bank. Don’t assume that the current credit crisis will prevent you from transferring your loan to another bank.”

* “Lenders are often keen to get people off tracker mortgages, so when existing   tracker rate customers apply for a top-up, they may decline the top-up in the hope that the client will move the entire mortgage elsewhere. Alternatively, they may use the opportunity to switch the entire loan to a ‘standard’ rate contract. Again know your options and don’t simply accept this.”

* “With so many home owners coming under financial pressure, it is imperative that they address their monetary issues prior to falling into arrears, either by contacting their lender or by talking with a mortgage broker and by looking at all the options. There are opportunities to switch for better deals, negotiate lower rates, and/ or seek an interest only option for a specified period or even a payment moratorium.”

* “With many buy-to-let mortgages now coming to the end of their interest only periods, some lenders are reluctant to extend the interest only term and borrowers are being asked to start making capital payments. Rental income is generally falling and so investors are coming under major pressure. So if you, as an investor, cannot afford to make capital payments, tell your lender and ‘play hardball’ with them if necessary.”

* “Buy-to-let investors typically don’t require life cover on their mortgage on the belief that with the ongoing rental income, the property pays for itself, and if they died, their spouse could always sell it to repay the mortgage. As selling property has become increasingly difficult of late and with many of these properties under water in terms of valuation, some investors are cleverly taking our pension term life insurance to cover the mortgage, which is a tax deductable method of solving the problem.”

It is imperative that we all keep a close eye on our personal finances, Mr Grant feels.

“A review of [your] monthly repayments and lenders could lead to significant savings – particularly in relation to mortgages,” he said.

“While researching the various providers can be a time-intensive task it could save people a lot of money in the long run, plus people can choose to avail of the services of an independent mortgage broker who can conduct this research in their behalf.”