families with mortgage difficulties

[canicemcavoy]

but obviously each case will be assessed on an individual basis.

Wonderful - so after cutting public sector workers' wages, we'll be paying a new bunch of them to try to figure out if Mr X and Mrs Y's house are now worth less than they paid for them. Even though whether they're in negative equity or not makes no difference to whether or not they can afford their mortgage.

You couldn't make it up, but I guess that Brian was forced to throw a sop to Parlon.

 

[NorfBank]

The only reason I can see for including the negative equity condition is as follows:

If people are struggling with their mortgage repayments and are not in negative equity at least they can try to sell and trade down / rent to put themselves in a better position

People in negative equity are stuck where they are so will be eligible for the extended relief presumably after passing a means test.

 

[Latrade]

The only reason I can see for including the negative equity condition is as follows:

If people are struggling with their mortgage repayments and are not in negative equity at least they can try to sell and trade down / rent to put themselves in a better position

People in negative equity are stuck where they are so will be eligible for the extended relief presumably after passing a means test.

Ok, I can see some sense in that, it seems to be punishing those who didn't buy at the top of the market, whether through luck, circumstance or foresight though.

As I remember, the last estimate of house prices has the figures around those or approaching those of 2001 (stand to be corrected). This would tend to mean that practically everyone who qualifies for the tax relief would be eligable for the extension to me.

 

[NorfBank]

Eligible for the extension maybe (depending on how much of the mortgage they have paid off in the intervening years) but will have to pass a means test too.

 

[corkgal]

Paying a big deposit and paying off your mortgage = no extra relief
Getting 100% mortgage and paying minimal/ interest only = extra relief
Thats fair

 

[Newbie!]

Wonderful - so after cutting public sector workers' wages, we'll be paying a new bunch of them to try to figure out if Mr X and Mrs Y's house are now worth less than they paid for them. Even though whether they're in negative equity or not makes no difference to whether or not they can afford their mortgage.

So they are going to decide on a case-by-case basis whether your home is in negative equity? Seems ludicrous...

 

[NorfBank]

No, they are going to assess whether you qualify for the extended tax relief on a case by case basis.

You need to be in negative equity to be assessed.

 

[canicemcavoy]

Paying a big deposit and paying off your mortgage = no extra relief
Getting 100% mortgage and paying minimal/ interest only = extra relief
Thats fair

Well, that's par for the course. We reward financial illiteracy and recklessness in this country. There's absolutely no point in doing the right thing - saving a decent deposit, then waiting to buy property at a sensible. Get a 100% mortgage. No, wait, a 110% one. Interest-only while you're at it. With your parents guaranteeing it (sure, their "equity" is doing nothing locked away). Ignore anyone who claims that property won't linearly increase forever - they're just hysterical.

Then when the proverbial invariably hits the fan, complain that it's everyone's fault except yourself, and get the people who were responsible to bail you out.

Like rubbers from the doctor, it's the Irish solution to an Irish problem.

 

[canicemcavoy]

You need to be in negative equity to be assessed.

Yes, and the point is - how do you know you're in negative equity? Presumably someone has to give you the current value of your house so you can know, and the public service has to agree with this valuation. Who does it?

 

[Chris]

Chris - you're kidding! All houses bought in our estate have dropped in price by more than 1/3. For example, somebody who purchased a standard 3-bed semi in 2006 for €300,000 and got what was offered (i.e. 100% mortgage) is now sitting in a house currently selling for €159,000. I'm sure this is very typical of a huge number of houses throughout Celtic Tiger land.

It's not 2006 talking about, 2006 was the peak of the market. The statement said that anyone in negative equity who's TRS runs out in 2010. That includes someone who bought in 2003. Average house prices are now at October 2003 prices, so unless you didn't reduce capital or remortgaged, there is no reason you should find yourself in negative equity.

 

[Bisar]

Supposing you're on a low margin LTV tracker. If you declare your house to now be in negative equity for purposes of extending the mortgage interest relief period is there a possibility that the banks/lenders will use this to try and move you to a higher rate product?

 

[pinkyBear]

We reward financial illiteracy and recklessness in this country

Hi there, I actually take real offence to this. We bought our house in 05, second time buyers - paid alot of money (too much) for it (and stamp duty 33K) but we needed to move from our first home.. As such we are in serious negative equity, and we are currently on a fixed rate of 4.84. Not only are we worried because we are with BOSI (as their variable rate the last time I checked was 7%). The interest relief gives us breating space as we could be introuble without it.

We were not in a position that could buy a house when prices were reasonable, early 2000's as some people were. so why does that make me a financial illiterate and reckless...

 

[Papercut]

The statement said that anyone in negative equity who's TRS runs out in 2010. That includes someone who bought in 2003. Average house prices are now at October 2003 prices, so unless you didn't reduce capital or remortgaged, there is no reason you should find yourself in negative equity.

Mortgage Interest Relief for someone who bought in 2003 expires at the end of 2009, so would not be eligible for the extension anyway - regardless of whether they are in negative equity or not.

 

[mosstown]

and what happens if you have no mortgage at all. we own a brand new nearly finished house in Ireland fully paid for that we plan to live in at some stage so i definitely have no negative equity.

 

[Splash]

I wonder if this will actually be applied or reneged on in the end? It's so confusing, and who is going to police this? If you bought during 'the boom years', and managed to save some extra cash each month, or used your SSIA fund; you may have paid a lump sum off your mortgage, or smaller extra amounts than your monthly repayments. You were deemed sensible right?

But you may now not be in 'negative equity' as a result. You won't get this extented relief until 2012, while others didn't make extra payments to pay down their mortgage debt but spent it elsewhere do get it. BTW, I am not talking about people who couldn't afford to pay any extra off their mortgages each month after day to day living expenses.

 

[corkgal]

I read the budget.gov.ie information and there is no mention of being in negative equity.

 

[Papercut]

and what happens if you have no mortgage at all. we own a brand new nearly finished house in Ireland fully paid for that we plan to live in at some stage so i definitely have no negative equity.

If you have no mortgage you would not be paying any interest, therefore you would not be entitled to mortgage interest relief.

 

[within29]

Mortgage Interest Relief for someone who bought in 2003 expires at the end of 2009, so would not be eligible for the extension anyway - regardless of whether they are in negative equity or not.

What if someone took out their mortgage in 2003 & remortgaged at a later date do they qualify, if so that doesn't seem fair

 

[bond-007]

If you remortgage TRS is available for 7 years from taking out the new mortgage. I would therefore say that the provisions would also apply to them.

 

[within29]

Madness