KBC CB Exceptions Gone Already

L

lledlledlled

Registered User
Messages
419
Hi,
I've been informed that KBC won't be offering any Central Bank exceptions going forward. No explanation, just that they're gone.
I know they often run out towards the end of the year but May seems early for this.
They denied it was related to their plans to leave Ireland.

It leaves me in quite a pickle as I was confident that I would qualify for one once I sell our existing home. I'm stuck on a long-term rate with a high break fee so that's not an option. And BOI won't deal with me because KBC's loans haven't moved over to them yet. Pretty crap news for my plans to trade up.
 
I suppose that if they are selling their business, Bank of Ireland would probably discount any loans given outside the normal lending criteria.

I wonder would BoI facilitate you after the loan is sold?

Brendan
 
Brendan Burgess said:
I suppose that if they are selling their business, Bank of Ireland would probably discount any loans given outside the normal lending criteria.

I wonder would BoI facilitate you after the loan is sold?

Brendan
Click to expand...
I suppose BOI might facilitate us then. However, we are almost Sale Agreed now on our own house and we're hoping to buy ASAP.
As bad as the supply of houses for sale is, getting stuck renting for a prolonged period will eat into our equity.
 
lledlledlled said:
we are almost Sale Agreed now on our own house
Click to expand...
Sounds as if you have to not sell your house.

It would be too risky to do so if you are not approved to buy a new house.

If you sell your own house, you will have to clear your mortgage so you will have no choice but to pay the big fixed rate penalty.

Brendan
 
Brendan Burgess said:
Sounds as if you have to not sell your house.

It would be too risky to do so if you are not approved to buy a new house.

If you sell your own house, you will have to clear your mortgage so you will have no choice but to pay the big fixed rate penalty.

Brendan
Click to expand...

Not quite. KBC confirmed previously (before they announced plans to leave Ireland) that they will accommodate a 'portal loan' whereby the break fee wouldn't need to be paid, as it will simply transfer to the loan for the new house.

We have already been approved in principle for the standard loan amount, within the CB limits. However, we had been working on the assumption that we would be eligible for a CB exception and even if we were unlucky enough that the timing meant we were buying when the exceptions had run out, we'd only need to wait a couple of months til the exceptions returned in January.

As the exceptions are suddenly gone (for some unexplained reason!) and it is unclear if they will ever return in KBC, we may now need to reset our plans and assume we won't get an exception.
We'll also need further clarity on the portal loan. What happens if we sell and KBC move out before we've bought? Are we going to have to pay the break fee suddenly?
 
Is the break fee more expensive than renting for ~6/12 months.

If KBC were willing to 'portal loan' the breakfee, would they be willing to negotiate the break fee?
 
It's probably worth your while to give all the information in case someone has a better idea.

Sale agreed price
Balance on existing mortgage
Remaining term of fixed rate
Fixed rate
Break fee

Target price of new house
Deposit available
LTV required
Salary
LTI required.

If you sell your own home first, I presume you have to pay the break fee.
Then they refund it to you if you take out another mortgage .
But is there a time limit on it?

If you get it in writing from KBC, BoI would have to honour it. But you would need it clearly in writing.

Brendan
 
Brendan Burgess said:
It's probably worth your while to give all the information in case someone has a better idea.

Sale agreed price
Balance on existing mortgage
Remaining term of fixed rate
Fixed rate
Break fee

Target price of new house
Deposit available
LTV required
Salary
LTI required.

If you sell your own home first, I presume you have to pay the break fee.
Then they refund it to you if you take out another mortgage .
But is there a time limit on it?

If you get it in writing from KBC, BoI would have to honour it. But you would need it clearly in writing.

Brendan
Click to expand...

- likely sale price €450k
- balance on mort €277k
- 6yrs 8mts left on fixed rate, 2.99%
- break fee €13,200

- Target price new house €700k
- Deposit available €225k
- LTV required 80%
- Salary €92k me, €62k spouse
- LTI required 3.5 times salary

I got clarification since on the portal loan. You are correct, we need to pay the break fee & then it's refunded when we take out a new mortgage with KBC. It isn't clear what happens if KBC have left the market between us selling & buying.

Another kicker i wasn't aware of is that upon drawdown of the new loan, the period of the 10yr fixed rate resets to Day 1 for the full loan. There is no allowance for the fact that we are nearly 7yrs into the 10yr rate or the fact that we never had more than 75% of our loan on the 10yr rate. In effect, we will have paid off the smaller portion of the loan and would be taking out a brand new loan fixed for 10yrs at 2.99%, with overpayments limited to 10% (this may not be a major concern as the new higher overpayments will make overpayments unlikely in the short term anyway).
 
lledlledlled said:
You are correct, we need to pay the break fee & then it's refunded when we take out a new mortgage with KBC. It isn't clear what happens if KBC have left the market between us selling & buying.
Click to expand...

I would say that it's pretty clear. KBC's obligations to you are carried over to the new owner.

While KBC might show you some flexibility e.g. if the offer is open for 6 months and it takes you 7 months, Bank of Ireland would be under no obligation to show that flexibility.

But make sure that you have it in writing from KBC.

Brendan
 
lledlledlled said:
Another kicker i wasn't aware of is that upon drawdown of the new loan, the period of the 10yr fixed rate resets to Day 1 for the full loan.
Click to expand...

That does not sound right.

You have €277k with three years to go.
You want to borrow another €200k

Are you saying that you are required to take out a loan of €477k @2.99% for 10 years starting today?

I would imagine that you will have two loans
1) €277k with three years to go
2) €200k at today's rates.

Brendan
 
Brendan Burgess said:
I would say that it's pretty clear. KBC's obligations to you are carried over to the new owner.

While KBC might show you some flexibility e.g. if the offer is open for 6 months and it takes you 7 months, Bank of Ireland would be under no obligation to show that flexibility.

But make sure that you have it in writing from KBC.

Brendan
Click to expand...

I won't get that in writing i'm afraid. In fact, it's just current KBC policy and can be withdrawn at any time apparently. The only way to lock it in would be if i have a Loan Offer as an Approval in Principal doesn’t constitute a formal offer.
 
Brendan Burgess said:
That does not sound right.

You have €277k with three years to go.
You want to borrow another €200k

Are you saying that you are required to take out a loan of €477k @2.99% for 10 years starting today?

I would imagine that you will have two loans
1) €277k with three years to go
2) €200k at today's rates.

Brendan
Click to expand...

You are partially correct.
I will indeed effectively have two loans. The 'new' portion will be at today's rates.
The 'old' portion will be on the 10yr fixed rate of 2.99%. However, even though almost 7 of the 10 yrs will have expired by then, this portion will be locked in for a full 10yrs starting at Day 1.

At what point does paying off the Break Fee (which has since risen slightly to €14k) begin to look attractive? We'd be free to move to any lender then, we wouldn't have any of the hassle of the portal loan and/or having to buy a house before they decide to change their policy or the AIP expires, and we needn't worry about what might happen when KBC enter the market.
€14k is a lot of money though, and might be the difference in us buying or missing out on the house we like.
 
Brendan Burgess said:
That does not sound right.

You have €277k with three years to go.
You want to borrow another €200k

Are you saying that you are required to take out a loan of €477k @2.99% for 10 years starting today?

I would imagine that you will have two loans
1) €277k with three years to go
2) €200k at today's rates.

Brendan
Click to expand...

Slight correction to these figures:

- €277k is the total remaining on the loan. The €14k BFF applies to €205k of this, as this is the amount still on the 10yr fixed rate. The BFF for the remaining €71k (on a 2yr fixed rate) is approx €80 only.
 
You must log in or register to reply here.
Back
Top