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:
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For Written Answer on : 17/04/2018
Question Number(s): 1576 Question Reference(s): 15938/18
Department: Housing, Planning and Local Government
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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.
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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.