Fewer mortgage deals rejected

THERE HAS been a slight fall in brokers saying that as high as 60 to 80 per cent of mortgage applications are being refused.

A survey by the Professional Insurance Brokers Association (Piba), the country’s largest group of independent mortgage and insurance brokers, found over 42 per cent of brokers said 60-80 per cent of mortgage applications were declined by lenders in the first three months of 2011.

In the last survey, six months ago, 55 per cent of brokers found a similarly high level of rejections.

The organisation said while the latest survey represents an improvement, it gives no cause for optimism. Rachel Doyle, director of Piba Mortgage Services, said the absence of a normal functioning banking system was continuing to stymie underlying demand.

“Brokers are reporting that this, along with the related concerns about the IMF-ECB bailout, is depressing consumer sentiment.”

The survey found the main reasons applications were refused by lenders concerned job security – either the applicant was not in current employment for sufficient time or their employment was on a fixed-contract basis.

In terms of the time taken to close a loan application, more than 90 per cent of brokers said it is taking at least three months, with almost one in three saying it takes over four months. This was a slight deterioration on six months ago, the organisation said.