Brendan Burgess
Founder
- Messages
- 52,118
The overriding problem is the lack of building. And especially the lack of building of starter homes. It would have been much better to abolish VAT on all new builds, irrespective of the status of the buyer. That would have encouraged more building and would not have the discriminatory effect.
The second time buyers are finding it hard to trade up because they overpaid in the first place and don't have the equity to fund the 20%.
Does giving FTBs 90% mortgages matter to the second time buyers? I suspect that it allows the FTBs buy the houses from the STBs which allows them to trade up, but only if they have the equity. If the FTBs were not allowed to borrow 90%, there wouldn't be much demand for the homes being sold by the STBs.
In our case also we did not qualify for the 2% cash back offer which was only available to non NE trade up customers.
Interesting point. Never thought of that. What mortgage rate are you now paying?
Brendan
First of all, the 80% LTV limit is appropriate. Second time buyers should not be borrowing more than this. The lenders are allowed to make up to 20% exceptions, so a second time buyer with a good credit risk who wants to borrow up to 90% will get a mortgage. (Most second time borrowers need less than 80% so most who want an exception will get one if the bank wants to give it to them.)
Should FTBs be allowed to borrow up to 90%? The Central Bank claims that their research shows that FTBs default less often. If that is the case, then it's reasonable to lend them more than second time buyers.
I built a house in the country on family land in 2006 with the plan to move home from Dublin, crash happened & there are no longer any suitable jobs in the area. So we rent in Dublin, therefore we are paying a high rent which will increase considerably at next review (we estimate by an additional €800 pm) so we are looking to buy as a mortgage will be cheaper than the rent. Getting together the 20% whilst paying rent is v hard & we are bidding against FTB's who have similar savings to us but need less deposit & many seem to parental financial support.
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