Applying for Affordable Housing mortgage, query?

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corcaigh2008

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Ok, a query i was wondering about.

We'll assume i applied for Affordable Housing as a single applicant and was lucky enough to be offered a house.

I then approach one of the financial institutions for a mortgage. Maybe they will not grant me a mortgage based on my own personal situation or income, can i then apply for a joint mortgage? Maybe a family member who would be prepared to apply jointly with me for the mortgage
And at the same time i could still remain as a single applicant for the AH. Is this possible?

Not sure if i've explained that clearly but hopefuly somebody understands what i'm trying to say, any advice welcome?

Thanks
 
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Hey there...

Not sure about having a family member joining you on the mortage...I guess this would mean that their name would have to appear on all the affordable housing paperwork as they would be joint owners of the property.

One thing that was suggested to a friend of mine by her broker, (when her yearly income was deemed insufficient to give her the mortage amount she required to complete her purchase) was to have a guarantor, pref. someone who was a homeowner themselves.

Don't know if that helps.
 
corcaigh2008 said:
Ok, a query i was wondering about.

We'll assume i applied for Affordable Housing as a single applicant and was lucky enough to be offered a house.

I then approach one of the financial institutions for a mortgage. Maybe they will not grant me a mortgage based on my own personal situation or income, can i then apply for a joint mortgage? Maybe a family member who would be prepared to apply jointly with me for the mortgage
And at the same time i could still remain as a single applicant for the AH. Is this possible?

Not sure if i've explained that clearly but hopefuly somebody understands what i'm trying to say, any advice welcome?

Thanks
Click to expand...

I was offered an affordable housing place last year, and as it turned out I was not able to secure a mortgage by my self, I could not afford the affordable house, kind of ironic :). Anyway when I was seeing how much I could borrow the banks all said that I would need a guarantor to get the amount that the place was for, so it is obviously possible to do with an affordable place.
I would advise anyone going down the affordable route with DCC to call all the banks first and find out what they can actually borrow, then you can fill in your preference form as appropriate and there will be no disappointment if you get selected, you will know you can get the laon. I could have done with that advice the fist time round myself.
 
Thanks for the replies.

Is there conditions attached to using a guarantor? i remember reading somewhere that they had to have a minimum slary, something like 40,000. Could be wrong about that though
 
corcaigh2008 said:
Thanks for the replies.

Is there conditions attached to using a guarantor? i remember reading somewhere that they had to have a minimum slary, something like 40,000. Could be wrong about that though
Click to expand...

Its up to the lending bank whether they will allow the guarantor or not. Dont think it makes a difference to the council.
 
mac198 said:
Its up to the lending bank whether they will allow the guarantor or not. Dont think it makes a difference to the council.
Click to expand...

Exactly…

Affordable housing really has two main Activities, firstly you have to get offered a place at some predetermined discounted price, that’s the hard part!
Then it’s up to you to secure a loan in order to buy it. The council don’t really care how you decided to finance it, just as long as you can.

Once you know how much you need you can go to the various lenders and see what they will give you, see if that institution’s lending criteria will be flexible enough to suit your needs, this is exactly the same as any other borrower. You are limited to the amount of lenders for AH though, which does limit your choice, but that’s another debate…. ;-)

Despite the clap down on credit, the EBS are still giving away a good amount, its at least enough for someone earning the average wage to secure a loan to buy one of the lower to mid priced Affordable places. (Me for example :))

If you do decide to get a guarantor the arrangement will be between you the guarantor and the bank. The guarantor will have no claim over the property, they are just there as a back up, in case the main borrower gets into bother, although if they secure there own home in the deal and cant pay if difficulty on your loan arrives then as always their home will be at risk blah blah blah, just as yours would be.

The amount the guarantor earns is only part of the lending institutions decision process. The lending institution will look at the guarantor the same as they do you, i.e. they will be subject to the same lending criteria as the main borrower, if they have a huge mortgage, little equity and other debt, it may not matter what they are earning, if they cant show that they could easily bail you out then they will probably not be able to help you secure a bigger loan. I’d say an ideal guarantor would be a parent/relative with their mortgage more or less cleared, plenty of equity and a fairly decent salary with no other major debts.

corcaigh2008 said:
Is there conditions attached to using a guarantor? i remember reading somewhere that they had to have a minimum slary, something like 40,000. Could be wrong about that though
Click to expand...


So corcaigh2008 to answer question properly the total amount they earn would not necessary have to be over 40,000. but obviously, the more the earn and the higher their own home equity the better.
 
Do you mean they won't let you use a guarantor if the mortgage is directly with them?

Or they won't let you use a guarantor when dealing with the banks?
 
They will not accept a guarantor when dealing with the banks. And I would presume if thats the case they wont either when dealing directly with them.
 
Would there be a particular reason for this?

That could be a problem for me down the line. I'm surprised at that considering other local authorities seem to allow it. Would Cork County Council not be happy enough once you can finance it even if it requires using a guarantor. Its disapoointing to hear that they have this policy!
 
When offered an Affordable House you can apply directly your County Council for a mortgage. There are generally 2 types.. Annuity Mortgage and Shared Ownership. Each eligible applicant will be assessed in order to determine the maximum amount that they would be entitled to borrow under the Affordable Housing Scheme. If the maximum amount an applicant can borrow is not adequate to purchase the particular house on offer, the applicant may be offered the opportunity to purchase the house under the Shared Ownership Scheme, at the discretion of the County Council.
Each application is examined on its own merits, taking into account the applicant’s income and expenditure. Loans will not exceed 97% of the cost of the dwelling.
Under the Annuity Scheme a minimum deposit of 3% of the purchase price of the house is required. If an affordable house is purchased with a shared ownership mortgage a deposit of €1270,00 is required.

You're own Council's website should give full particulars on their services.
 
Is there some maximum value put in place with regard to the shared ownership scheme and what value the property can be?
 
Shared ownership is a system which facilitates access to full home ownership in two or more stages to persons who cannot afford full ownership immediately. The applicant will initially acquire a (minimum 40%, maximum 75%) share in a house (or flat) and rents the remainder from the local authority, with an undertaking to acquire the remaining equity within a 25 year period (or the lifetime of the loan, whichever is the least).

Im not sure if each local authority differs but the maximum amount that can be borrowed from Laois County Council is E185,000. Probably would be best to consult with your own local authority.
 
is 185,000 the max value of the share on which you pay the mortgage?

What is the max value when you add together both the share the applicant has and the share the council has?

Would it be 185,000 x 2...

In other words a value of 270,000 on the open market
 
There are two different limits:

1) The max you can borrow from the Council
2) The max price of the property

IIRC one of these limits is set by the Council while the other is set by the Department of the Environment - I think it's the Council that sets #2 - and there isn't necessarily any discernible relationship between the two.
 
corcaigh2008 said:
Ok, a query i was wondering about.

We'll assume i applied for Affordable Housing as a single applicant and was lucky enough to be offered a house.

I then approach one of the financial institutions for a mortgage. Maybe they will not grant me a mortgage based on my own personal situation or income, can i then apply for a joint mortgage? Maybe a family member who would be prepared to apply jointly with me for the mortgage
And at the same time i could still remain as a single applicant for the AH. Is this possible?

Not sure if i've explained that clearly but hopefuly somebody understands what i'm trying to say, any advice welcome?

Thanks
Click to expand...

Hi,
Hope this is helpful. I found myself in exactly that position, got a house on the affordable housing. Went to see it, fell in love with it, went to a mortgage broker (reccommended by the auctioneer), they came back to me after about 3/4 weeks to say none of the three institutuions would give me a mortgage as I didnt earn enough. The broker told me I only had two options; to get a family member or friend (on condition they also were a first time buyer so that ruled out the parents bailing me out) to buy with me or to apply for the shared ownership. I looked into the pros and cons of the shared ownership and quickly ruled it out!!!
He most definitely made it clear that Dublin City council would not under any circumstances allow a guarantor.
Ive checked it out with the lenders and they will do the mortgage with a gaurantor, the problem lies with the council...
So basically Im at the moment in limbo...
 
corcaigh2008 said:
Ok, a query i was wondering about.

We'll assume i applied for Affordable Housing as a single applicant and was lucky enough to be offered a house.

I then approach one of the financial institutions for a mortgage. Maybe they will not grant me a mortgage based on my own personal situation or income, can i then apply for a joint mortgage? Maybe a family member who would be prepared to apply jointly with me for the mortgage
And at the same time i could still remain as a single applicant for the AH. Is this possible?

Not sure if i've explained that clearly but hopefuly somebody understands what i'm trying to say, any advice welcome?

Thanks
Click to expand...

Hi,
Hope this is helpful. I found myself in exactly that position, got a house on the affordable housing. Went to see it, fell in love with it, went to a mortgage broker (reccommended by the auctioneer), they came back to me after about 3/4 weeks to say none of the three institutuions would give me a mortgage as I didnt earn enough. The broker told me I only had two options; to get a family member or friend (on condition they also were a first time buyer so that ruled out the parents bailing me out) to buy with me or to apply for the shared ownership. I looked into the pros and cons of the shared ownership and quickly ruled it out!!!
He most definitely made it clear that Dublin City council would not under any circumstances allow a guarantor.
Ive checked it out with the lenders and they will do the mortgage with a gaurantor, the problem lies with the council...
So basically Im at the moment in limbo...
 
Thanks for the reply. I would have thought that once the lenders were happy to use a guarantor that the council would be ok with it too...

So your only option is shared ownership?
 
Yeah but you really need to look into it, as I said I decided really not for me. When I rang the Council to enquire she practically warned me off....The alot of legal issues going on at the moment regarding the clawback, my understanding was that when you go to buy out the council you still have to pay a considerable clawback. These are issues they are currently trying to resolve (at least in Dub, possibly different in Cork) That said though maybe see if anyone on the forum who has gone that route can give you more info
 
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