Pay your Mortgage offers from Developers

R

robd

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Something occured to me today, and I have a big question.

Are the builders who are offering all these "Pay your Mortgage" deals, bonding the repayments to guarantee their payment in the event of bankruptcy?

The reason I ask this, is that I believe that a large number of builders may/will be susceptible to cashflow problems and thus bankruptcy due to residential construction winding down. These offers, are designed to entice buyers and allievate short term cash flow problems for the builder by getting their property off loaded. In the long term this may worsen their cashflow.

I think these offers are a worrying development and a timebomb and as such the structure of such offers needs to be promptly investigated by the Financial Regulator, Consumer Association and Central Bank.

Brendan?
 
Is there any info about such offers online? Never heard of them myself. Obviously anybody pursuing a purchase that involves such a deal should ask their solicitor for advice on how binding the mortgage payment offer is.
 
I would have thought it would make more sense to reduce the price? Benefits all round. Anyway, also have not heard of any of these deals.

mf
 
I can see how this benefits both sides; builder doesn't have to "drop" prices, doesn't undermine other developments or value of other houses as much. Buyer effectively gets to borrow the money to furnish the house & other expenses from the mortgage.
 
Firstly, I really don't want this to turn into a debate on the merits of dropping the price versus paying the mortgage. I fully agree they should drop the price but I am trying to highlight what I belive is a serious consumer issue.

Here's one:
http://www.daft.ie/1198372

There's ads for others postered all over the Dart and Radio ads too for a certain development that I can't remember the name of right now. I'll try to find more links. It is definately a true and easily confirmed offer.
 
I have heard of/seen these offers, but I doubt that they are common enough at this stage to constitute a 'timebomb'.

And I don't know if the Financial Regulator or the Central Bank will take much of an interest-this is not a financial product as such, it is a special offer or discount on the asking price. I would imagine that the developer has a get out clause along the lines of 'can't pay, won't pay' but that is up to the buyer and their solicitor to investigate.

The NCA might be more interested.
 
It's more widespread than you might think this year.

See this article...
[broken link removed]

and buried in the absurd website of this lot...
www.tyrrelstown.com

and there's another one on the radio but I can't remember the name.
 
In order to get these deals, do you not have to use their mortgage broker / mortgage package?
 
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