Affordable Home mortgage switch

Discussion in 'The Switchers' Forum' started by Maddie, Mar 29, 2018.

  1. Maddie

    Maddie Registered User

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    3
    Hi,
    Has anyone experience of switching mortgage provider when they have an affordable home?

    I am trying to do this at present but the local authority in question has told me that there is 'no legislative provision' to change the mortgage provider on the charging order. So although the local authority say they have no objection in principal to me switching, legislation won't allow me to do this.

    Any advise would be very appreciated as I have already employed a solicitor and was nearing the end of the process when this issue materialised so am frustrated.
     
  2. Humpty Dumpty

    Humpty Dumpty Registered User

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    Who is your mortgage with? Is it with the council? If with a bank I don't see how council would have a say in it
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    35,042
    I presume your mortgage is with a local authority.

    Why do you want to switch it?

    Brendan
     
  4. Maddie

    Maddie Registered User

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    3
    Last edited: Apr 16, 2018
    My mortgage is with EBS and I wish to change to Bank of Ireland for lower rate.

    The council say that they have no objection in principle to me switching but that there is 'no legislative provision' to change the mortgage provider on the charging order. They say a change in legislation is required and advised me to contact a T.D.
    I have sent an email to Michael McGrath T.D. and he got back to me immediately saying that he would investigate this and raise a question in the Dáil so I'm hoping he will update me soon.
     
    Last edited: Apr 16, 2018
  5. Malahide

    Malahide Registered User

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    4
    Hi Maddie,
    Would you please have an update on the post above?
    We are thinking in switching too, we have received bank pre-approval and we are gathering all the documentation at the moment. But I was really surprised about your situation, we also bought an affordable home years ago. I never thought there would be a problem switching until now. Our morgage is with a bank also, not the council.

    Your experience will be appreciated.
     
  6. kevin1989

    kevin1989 Registered User

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    2
    Hi malahide
    Just to let you know that I had no problems switching from KBC bank to AIB bank on my affordable house.Went from 4.2 interest rate to 2.75 so well worth doing. Good luck..
     
  7. renter45

    renter45 Frequent Poster

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    Was there any comment made by AIB on the fact the county council have a charge on the property??
     
  8. kevin1989

    kevin1989 Registered User

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    not to me there wasn't..i know my solicitor had to wait for forms from wicklow co council for a few weeks which was the only setback..
     
  9. Sideview

    Sideview Frequent Poster

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    40
    I tried switching to AIB late last year but once they heard about the Fingal CC chargeback they said they would simply not proceed.
    I tried explaining that they could not lose as the switched mortgage amount was less than what the Fingal chargeback amount kicked in at, but
    was told it was not up for further discussion. I then fixed with EBS instead.
    Interesting to hear that Kevin above was taken on by AIB. I could never understand why they wouldn't take me on because there was simply no risk to them on that point.
    Fingal had agreed to me switching, but the guy there did tell me others had had problems and he hadn't heard of anyone successfully doing it. He was just interested to see if
    I could get the switch completed.
     
  10. Maddie

    Maddie Registered User

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    3
    Last edited: May 31, 2018
    Hi Malahide,
    My local authority (Dun Laoghaire Rathdown County Co.) said they have no objection in principle to me switching mortgage providers but there is no ‘legislative provision’ to allow a switch in mortgage provider on the charging order.
    That would mean that the new mortgage provider would have to rank second on the charging order behind DLRCC. Bank of Ireland (who I was trying to switch to) said this is not acceptable to them and doubts this position would be acceptable to any lender.
    I wrote to Michael McGrath TD on this and he raised a Dáil question on it which I'll post below:
    -------------------------------------------------------------------------------------------
    For Written Answer on : 17/04/2018
    Question Number(s)
    : 1576 Question Reference(s): 15938/18
    Department:
    Housing, Planning and Local Government
    ______________________________________________

    QUESTION


    To ask the Minister for Housing; Planning and Local Government the reason persons purchased a house under the affordable housing scheme are unable in practice to switch their mortgage from one lender to another (details supplied); and if he will make a statement on the matter. (Details Supplied) emailed @ 15.29 6/4/18 The attached letter from Dún Laoghaire Rathdown is an example of the response being given by local authorities when a borrower seeks to switch from one commercial lender to another.

    REPLY

    Purchasers of dwellings under previous affordable housing schemes, including dwellings sold by way of shared ownership at less than market value, have a clawback charge placed on the property. The primary purpose of the clawback regime was to prevent short-term profit-taking on the resale of affordable homes. As such, it should, therefore, only have effect in the event of the house being sold. However, as a result of the way in which the clawback legislative arrangements are structured, they have an impact on affordable homeowners wishing to switch mortgage provider or take out an equity release “top-up” mortgage. This arises because of the time-sensitive manner in which charges on property apply.

    The Housing (Miscellaneous Provisions) Act 2009 which will be commenced shortly will allow purchasers under the new Affordable Dwelling Purchase arrangements to re-mortgage or top-up their mortgage without triggering the clawback. The Act, however, does not provide this facility retrospectively for purchasers under previous affordable housing or shared ownership arrangements. I have requested my Department to arrange to have the provisions necessary to address this matter included in the first appropriate legislative vehicle that becomes available.


    ---------------------------------------------------------------------------------

    So it seems new legislation ie required to allow me to switch. I've now contacted my local TDs to see if they can help to speed up this but don't really know how long this could take.
     
    Last edited: May 31, 2018
  11. Sideview

    Sideview Frequent Poster

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    Thanks Maddie.
    This explains why AIB wouldn't accept my switching application so.
     
  12. Malahide

    Malahide Registered User

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    Thanks Maddie, I have sent an e-mail yo KCC first to check their position on the switch. Still waiting three weeks later.
    Best of luck and keep us posted please.
     
  13. Malahide

    Malahide Registered User

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    4
    Hi Maddie, any luck so far?

    We can't get a concrete answer from KCC.

    Thanks !
     
  14. Malahide

    Malahide Registered User

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    4
    Hi Sideview, I gather you werewith EBS originally, did you have to go through the whole proceess of switching to fix it or it was a straight forward change ?
    Thanks !