Resolution
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Security on the mortgage: property valued at €750,000
Current property value: €350,000
The CBI measure do not apply to switcher mortgages...Thanks for posting your details, from what you have shared I'm afraid you may be trapped with the fund you are with, due to the Central Bank affordability rules. The absolute highest possible is 4.5 X Gross income, this would get you to only €180,000. Unfortunately the rules only allow earned income, so the rent as you say doesn't count.
I may be misunderstanding the comment, but unfortunately I believe there is no difference I'm aware of in how the CBI treats a new or switcher mortgage. Both the Loan to Value and Loan to Income limits are applicable, a switch is just a new mortgage. Usually this isn't that important as Value and income most times are similar from original to switch. However, in the case of the mortgages with Vultures this is much more common, as Income levels may have changed etc..The CBI measure do not apply to switcher mortgages...
Unfortunately your understanding is incorrect Mark. The legislation does not apply to switchers. Read the "exemptions" section of the statutory instrument.I may be misunderstanding the comment, but unfortunately I believe there is no difference I'm aware of in how the CBI treats a new or switcher mortgage.
Thanks @RedOnion, I stand corrected I went and had a look at the SI,Unfortunately your understanding is incorrect Mark. The legislation does not apply to switchers. Read the "exemptions" section of the statutory instrument.
But lenders have their own underwriting criteria.
If we want changes, we need to first understand the starting point.
Looking at the specific case, because it's not unique.In the case of @Resolution above it is therefore likely that it is the lender policy that stands in the way of the switch not the CBI LTI rule. In theory then a lender could offer a mortgage in this case based on their own assesment. In practice though I can't think of a case I've seen where they have gone beyond 4.5 X the LTI for a switcher so it probably doesn't help @Resolution
@Brendan Burgess@Resolution
Which lender were you with originally?
I would argue that you should be allowed to avail of the rates offered by the originator of the loan.
I don't think that the Central Bank or government will enforce that, although I will continue lobbying them.
I think you should consider taking a complaint to the Ombudsman and let him decide if your interest rate is fair.
Brendan
Thanks @Mark Coan. If the potential political solutions you mentioned are not yet in place, the only course of action available to me is that suggested by @Brendan Burgess i.e. lobby politicians and media?@Resolution as @RedOnion points out the issue here is affordability which is not an uncommon case as the goal posts on lending have moved significantly since 2008. To @Brendan Burgess point there are some potential political solutions such as introducing an equity based scheme similar to the first home scheme to top up affordability or introducing modified affordability tests for ‘mortgage prisoners’ which has been brought in by the FCA in the UK for example. That said there has been no policy or media coverage of these kind of measures in Ireland to date that I’m aware of, so this may be a long shot.
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