Buying out my home from Shared Ownership

S

Sinead..1

Guest
Hi,

I purchased my home 3 years ago on a Shared Ownership Scheme. I was on a low income so I opted for this as I wouldn't get a mortgage from a bank. Today I am on a salary of E22,000 and am trying to remortgage with the bank but as usual noone will give me the time of day as I am on a low salary. It really is very unfair as I am capable of paying back a mortgage as I have been doing so for the past three years. Does anybody have any ideas for me? I'd appreciate any feedback.

Thanks.

Sinead.
 
Some questions:
  • What was the original purchase price of the property?
  • What percentage (> 40% as far as I know) did you buy in it?
  • Did you get a mortgage for this and, if so, from whom and for how much and at what rate?
  • How much is outstanding on this mortgage?
  • What is the current value of the property?
 
Banks these days have pretty lax lending policies. If a bank is reluctant to believe that you can pay back a mortgage, you should take heed of what they say and give yourself a really objective financial analysis. How would you cope if you were sick for a while? Had a child? got made redundant?

If having carried out this analysis you are absolutely 100% certain sure that you will be able to pay back the mortgage, then I suggest you go to a mortgage broker. I have very little time for mortgage brokers myself (nothing against the people - it is just surprising to me that their industry needs to exist at all), but for somebody who is finding it hard to get a loan, there is no doubt that going through a broker offers better prospects than going direct to the lender. There are some very good and reputable brokers who post regularly on this site.

Best of luck with it!
 
Hi Sinead - Maybe if you start saving the mortgage repayments and you can show a good savings track record with a healthy lump sum in a couple of years time, the banks might consider you then.
 
Sinead, I was in the exact same position as you..I took on a second part time job...(cleaning an office for two extra hours a day straight after my main job) ..but you need to keep it up for about 6 months, I quit the day I got my mortgage approval from the bank...also just to note, while the banks still turned me down, a broker (make sure you pick one that doesn't charge you a fee) got approval for me from the same bank that turned me down
 
Mackers1001 - just a rider on your comment about broker fees; some brokers (i.e. REA) charge fees but include the solicitor's professional fee in their charge and then rebate all the lender commission back to the client so being charged a fee isn't necessarily a negative. If a broker was charging a fee on to of retaining the commission I would agree with you a 100% though.

Sinead - on a salary of €22,000 (and assuming you have no loan commitments and the ability to rent out a room) you qualify for approx. €120,000.

Sarah

www.rea.ie
 
About Brokers...

(nothing against the people - it is just surprising to me that their industry needs to exist at all)
Click to expand...

Why so? A mortgage broker will get you the best deal from a variety of lenders at no extra cost. Of course you can do all the research yourself as to which lenders offer the best rates for your requirements, and then figure out which of these will actually offer you the mortgage you need. Or you could go to a broker and get this done for you.

If I'm feeling ill, there's vast amounts of medical literature available on the internet that will enable me to diagnose myself. But I'd still prefer to go to a doctor.

For those not already aware of my vested interest, I'm a broker.

Liam D Ferguson
www.yourfirstcastle.com
 
I paid E154,000 for my house which is now worth E260,000. I owe E139,000. I was able to out down a good deposit. I did the Shared Ownership 70/40. The mortgage is 90,000 and the rent is just over 30,000. My repayments are nearly E600 per month.
 
"Why so? A mortgage broker will get you the best deal from a variety of lenders at no extra cost. "

Hi Liam. No offence intended - and you were certainly one of the brokers I had in mind when I referred to those who post here.

I suppose the point I was making (poorly) is that for very many people, the best available rate should only take a few calls to lenders and some fairly basic research. That is all it takes me, and most of my borrowings are at ECB plus 0.8%, which is reasonably keen. It doesn't seem so complex to me that you should need somebody to do this for you; But I suppose that I am coming from a background of being very familiar with mortgages, and my perspective might not be that of the average punter. Plus, I have to acknowledge that the market does seem to prove me wrong - I think that the percentage of mortgages procured through brokers continues to rise. Any time you add a layer between buyer and seller, my first instinct is that you must be adding cost to a system. As against that, I believe some banks reckon it is cheaper to sell through brokers than to sell through their own staff. So, - if I reflect more fully on my comment - I do have to concede that the opinion given was off the cuff, possibly personal to my own circumstances, and perhaps not borne out by the evidence of the market. (as I re-read this, I must also concede that this is a very wishy washy retraction; )
 
Hi MOB,

No offence intended...
Click to expand...

None taken. I enjoy a good debate.

I have to acknowledge that an inefficient or bad broker will do no service to a client, at best merely adding an extra layer of unneccesary delay between client and lender, at worst recommending a mortgage product for personal gain, rather than the benefit of the client. Such brokers will often struggle to maintain a healthy business, as referrals will be thin on the ground, but that's another story.

The other point is that in my opinion, the Askaboutmoney community is not really representative of the Irish population. If everyone visited AAM / read the personal finance columns regularly, so many people would be picking their own good tracker mortgage rates and low-charging pensions etc., that in time the whole financial services industry would become a truly competitive and respected market.

But sadly, AAM regulars are in the minority, in my experience, and most people still go to their local bank manager / cousin's boyfriend / auctioneer to get a mortgage, rather than doing much research themselves. Hence the continuing role of brokers.

Apologies to the original poster for veering off topic.
 
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