Blog – McCarthy & Associates – Galway Talks, 11/09/2014

mortgageQuestion: If you are in arrears with your mortgage can a bank penalize you by charging more interest?

Answer:  Since the introduction of a new Code of Conduct for lenders on 1st January 2011, they are banned from charging surcharge interest on arrears.  This is separate from the interest that you will pay on the outstanding balance on your mortgage, which will be charged in the normal way.

Question: I was recently refused a credit card and as far as I am aware I think my credit rating is ok.  Why would this have happened?

Answer:  First of all I would suggest that you check your credit rating with the Irish Credit Bureau.  This can be done online at at a cost of €6.  The report will show your repayment history with your lenders and if there is an error you need to get back onto that institution and have it corrected immediately.  There have been quite a number of instances, where the records of the ICB holder are incorrect and borrowers, who are up to date, have discovered that this has affected their ability to obtain further credit.

Alternatively if the ICB record is correct, then you should request an answer from the credit card company as to why you were refused.

Question: I have to make a tax return this year for the first time ever as I am a PAYE worker.  Do I need to go to an Accountant to do this?

Answer:  Generally PAYE workers do not have to make a tax return unless they have income outside of their employment.  For example, if you have rental income then you must make a separate tax return each year. 

Doing your own return is not onerous, unless your affairs are complex.  However, if you feel more comfortable you could get an accountant, to do it for the first year and you could then make the returns yourself in the future.

Question: I am in the process of getting a mortgage and the bank that I have been sanctioned the loan with are trying to sell me life cover which I feel is very expensive.  Do I have to take up the policy I am offered or can I go elsewhere?

Answer:  There is no obligation on you to take out any product associated with the mortgage, which has been offered to you by your bank.  If you shop around the various life companies or contact a broker you may be able to get a cheaper policy.  I would recommend that you take out a basic mortgage protection policy, which is the cheapest form of cover and will satisfy the requirements of the lender.

Question: I want to put money on deposit for a year as I would need it in about 18 months time.  In case I need access the account during the first 12 months, do any banks provide this facility without penalty?

Answer:  Some institutions have a facility, hereby you can withdraw up to 25% of the deposit on demand without penalty.

If this is the type of feature you are looking for, around the various banks and you will find an account that suits you.