Easisteps.ie What do you think of this rent to buy scheme?

S

scronin

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Hi there,

[broken link removed]

EasiSteps is a newly established company limited by shares and registered in Ireland. Our core activity is the mediation and distribution of Innovative Products designed to facilitate the sale and purchase of New Homes. With the Easi Steps Purchase Plan, homes already contructed and ready for occupation can be purchased from the developer over an agreed period, offering buyers the chance to move in straight away and complete at a mutually agreeable time in the future.
The principles behind Easi Steps are Gerard Leahy and Seamus Newcombe, both with extensive experience in the New Homes and Financial Services industries. They recognised that there was an opening in the market for new products which assist purchasers that have the capacity to meet mortgage commitments but difficulty in their current circumstances in saving the required deposit.
OUR COMPANY DIRECTORS

Gerard Leahy
Gerry Leahy is Managing Director of Leahy New Homes and a recognised expert in the New Homes Market having previously served in managerial positions with major National Estate Agents.
Gerry is a member of the Irish Auctioneers & Valuers Institute (IAVI).
Seamus Newcombe
Seamus Newcombe is Sales Director with one of Irelands leading Mortgage & Financial Services Companies. He previously worked with Irish Permanent during its successful merger with TSB Bank.
Seamus is a member of the Institute of Bankers and the Life Assurance Association.
Has anyone availed of this [broken link removed] option?

Can anyone get a mortgage while availing of this option?

Love to hear cos we are having no luck & no support from lenders. What's the point of having products out there like this when the banks won't support?
 
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Re: Easi-steps

It seems the difference between this and other rent to buy schemes is that all of the 'rent' paid over the 2 years goes towards the deposit where as in other rent to buy schemes only a percentage of it goes towards the deposit.

 
Re: Easi-steps

Hi
I contacted them through the website but haven't heard anything back yet am going to pose my queries here:

Is it that you rent for two years and then try and get a mortgage to buy at the purchase price agreed now or lower depending on where the market is at?

If renting a two bed at €850 per month - then you accumulate rents of €20,400 over two years - surely that goes towards more than just the deposit of €5,000? If so, seems like a major loss! If however the remaining €15,400 goes towards decreasing the overall purchase price then that makes good financial sense.

D
 
Re: Easi-steps

From the way I read it the rent goes towards the deposit. Isn't that the idea as FTB's don't have deposits?
 
Re: Easi-steps

I would read it the same as well that all of the rent paid goes towards the deposit unlike some other rent to buy schemes. I would love to know what happens in the event the apartment price drops are you locked in the 2009 price? I have put this question to them but haven't got a reply yet. I can't see any bank willing to give out a mortgage on an apartment at 2009 price if its is worth far less in 2011.
 
Re: Easi-steps

Hi

Just had a quick chat with Easisteps.ie - yes the overall rent goes towards the 10% deposit on the property. You (or they) get mortgage approval now and then you get the property based on that approval so you don't draw it down but you go back to the banks to draw down a new mortgage in two years. Awaiting more info by email to clarify whether you are tied into 2009 or 2011 prices.

Their website says: On receipt of mortgage approval in principle & life
assurance, you can sign the contract for purchase. This will be a purchase subject to mortgage approval. The conditions will include the terms of occupancy together with a schedule of the payments required to build up the deposit.

This seems to me like you're tied in to 2009 pricing. But if you don't buy in the end (for whatever reason) you've been renting a nice two-bed, furnished to your own liking, for 2 years at a very reasonable price. Seems like a win:win situation to me!

D
 
Re: Easi-steps

You (or they) get mortgage approval now and then you get the property based on that approval so you don't draw it down but you go back to the banks to draw down a new mortgage in two years.

That to me seems strange as mortgage approval in principal only lasts for 6 months usually. I know they probably have to see if you are eligible to service the mortgage but that approval would seem to me to have no bearing on actually getting the mortgage in 2 years time.

Also it doesn't answer the question I can't see a bank willing to give a mortgage on a property that has reduced in price in the market.

It seems like a good in principle for people finding it difficult to save for a deposit while renting but a few questions will need to be answered first.
 
Re: Easi-steps

Hi

I visited the apts yesterday and spoke to the Easi-steps advisor - the mortgage approval now is in principle only and you do have to apply in two years time for a new mortgage - a risky option. She did say that they are getting approval for contractors which was music to my ears as I've been working on contract for the last 2 years and don't see a permanent position arising any time soon.

When pressed she wouldn't tell me if the property price can be re-negociated in two years time if prices continue to fall so the downside is that you pay 2009 prices in 2011 when it might be 10-15% cheaper.

In this instance the two bedrooms were very small and the one bed on offer seemed a better option - living space wise and price wise so I decided not to pursue it. I think there will be more schemes like this coming on board and I also think developers will start dropping their prices across the board - a 1-bed in Stepaside for 200k is very keen and the 36 apts are almost sold out after just one week on the market.

So I guess it's a case of wait and see who follows suit.

D
 
Re: Easi-steps

What happens in 2 years if you cant get a mortgage? If the rent paid equates to a 10% deposit you'll need a 90% mortgage which dispite banks advertising are rare as hens teeth.
If you contract to buy for €200,000 but in 2 years the bank value it at €170,000 (because prices continue to fall) they will then, assuming you can get a 90% mortgage, advance a maximum of €153,000. You'll need €47,000 to close the sale of which you've paid €20,000 (rent paid calculated for 10% deposit on €200,000) so you'll have a shortfall of €27,000 - What happens if you can't raise this €27,000? Are you kicked out and lose the €20,000 you've already paid?
 
Re: Easi-steps

Yes that would seem to me what would happen if you can't raise the extra money to close the sale. I suppose from their point of view if you were renting for the 2 years the money would be gone anyway.
 
Re: Easi-steps

Based on some of the scenarious first time buyers have landed in with ordinary purchases of apartments anyone going down this route of rent to buy would really need to be 110% sure they know what they are getting into.
Furthermore don't buy off plan, don't buy in the middle of nowhere, don't buy one beds, make sure the developer is viable, make sure the developer will finish the estate and don't believe one word that the developer or estate agent tells you. Nor should you believe whatever infrastructure the govenment has promised in the future nor believe the bank will give you a mortgage in two years time.
 
Re: Easi-steps

Just wanted to know has anyone availed of the easisteps option?

I have signed contracts, snagged etc but Im waiting on a bank guarantee from Anglo Irish.

Just wondering is everyone else in the same position?

The process has taken much longer than anticipated and I'm anxious to get into my new apartment as the lease on my current apartment is up at the end of this month, at this rate i will have to extend it as i have no idea when Ango will put the guarantee in place.

Its very frustrating.
 
Cant really see where the "risk" is in this for a 1st time buyer.

You pay 2 years rents (which you would have done anyway) but at least at the end of 2 years you have the option to buy the property USING that paid money as a deposit.

Rent is normally dead money but in this scenario it need not be.

Lets say you do rent for 2 years and
eventually buy the apt at 200k (180k + 20k you'd paid in rent).

Even if the market value has dropped 10%....consider your alternative.

Rent somewhere else for 2 years....paying 20k dead money
AND save for deposit to buy the same apt at 180k. 10%=18k to save

The 20k worth of rent you've been paying is gone and you've had to save the other 18k so in effect that 180k house has cost you 218k over the 2 years.

Add to this the fact that most people will struggle to pay rent and get a deposit together in such a short time frame.

Which is easier for the 1st time buyer to achieve? Yes there is the argument that one will end up with 200k mortgage and the other with 180k but for scenario 1, if the 1st time buyer applies a similar approach to scenario 2 (i.e. save some money eg 9k over 2 years), they can always over pay into their repayments thus reducing the term anyway.

I wish this sort of system of purchase had been available to me because it was a hell of lot harder trying to rent AND save to purchase.
 
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