Local authorities to offer cut-price mortgages to FTBs

The criteria is counter intuitive. So you must have been refused sufficient credit from at least 2 banks. So you're considered a higher credit risk by the banks. And then you get a lower interest rate?!
 
To be eligible for a Rebuilding Ireland Home Loan you must:
  • be a first-time buyer
  • be aged between 18 and 70 years
  • be in continuous employment for a minimum of two years, as a primary applicant or be in continuous employment for a minimum of one year, as a secondary applicant
  • have an annual gross income of not more than €50,000 as a single applicant or not more than €75,000 combined as joint applicants
  • submit two years certified accounts if self-employed
  • provide evidence of insufficient offers of finance from two banks or building societies
  • not be a current or previous owner of residential property in or outside the Republic of Ireland
  • occupy the property as your normal place of residence
  • purchase or self-build a property situated in the Republic of Ireland of no more than of 175 square metres (gross internal floor area)
  • purchase or self-build a property which does not exceed the maximum market value applicable for the county in which it is located
  • consent to an Irish Credit Bureau and/or a Central Credit Register search
Eligibility is subject to submission of a complete Rebuilding Ireland Home Loan application form and confirmation by your local authority.

http://rebuildingirelandhomeloan.ie/eligibility/
 
I'm a bit confused by this. I could get more with this loan than I could ever get from a bank mortgage based on 3.5 times my salary but the bank has to turn me down first....??
 
This sounds utterly insane.

Further fuel to the fire that is demand!

If I’m on €50k per annum, I just deliberately get turned down by two banks and then Bob’s my uncle, 2% for 30 years.

A cheeky little €10 each way on Woods for the Masters via my current account and no bank will touch me!
 
It is insane. It's just more of the nicely-nicely approach to builders to start building by effectively guaranteeing the floor on house prices.
 
EvenStevens said:
I'm a bit confused by this. I could get more with this loan than I could ever get from a bank mortgage based on 3.5 times my salary but the bank has to turn me down first....??
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That's about the height of it.

It effectively means a single buyer earning ~€50k now has the same purchasing power as a single buyer earning ~€80k.

Throw the FTB grant on top of that and what impact do you think that will have on house prices?

Of course the taxpayer will carry the direct cost of the inevitable defaults.

It's completely bonkers.:mad:
 
Apart from the cut rate here, the fixed rate nature of this is extremely valuable. The 30 year corporate swap rate is over 1.5%, so this is as tight a margin as the very best tracker rates.

Say a typical 200k house, with 10% deposit, over 30 years.
2.25% Vs 3% is a saving of 25.5k over the full term (70 per month).
Over 30 years, we're going to see rate rises. Say 4% as an average (could be much higher). That'd cost an extra 61.6k over the life.

So, for someone who meets the criteria, would they consider intentionally damaging their credit history to be refused by banks to get this...
 
RedOnion said:
Apart from the cut rate here, the fixed rate nature of this is extremely valuable. The 30 year corporate swap rate is over 1.5%, so this is as tight a margin as the very best tracker rates.

Say a typical 200k house, with 10% deposit, over 30 years.
2.25% Vs 3% is a saving of 25.5k over the full term (70 per month).
Over 30 years, we're going to see rate rises. Say 4% as an average (could be much higher). That'd cost an extra 61.6k over the life.

So, for someone who meets the criteria, would they consider intentionally damaging their credit history to be refused by banks to get this...
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they may not need to if it is anything like the one back in 1980/90 ,
 
The refusal by 2 banks is the interesting part. Is is simple a case in 32k a year a bank wont touch me as i'm on to low an income so i can apply to this and get a mortgage around 260k. But if a bank refusal me as i gamble every weekend with PP will this lot touch me. More information needs to be given on the refusal part as its very broad concept.
 
The eligibility criteria require an applicant to "provide evidence of insufficient offers of finance from two banks or building societies".

So, I'm on €50k and want to borrow €250k. The banks would love to lend me that amount but they're restricted from doing so by the Central Bank's pesky rules.

No, problem just borrow the €250k, at a cut-price rate, from the local authority!
 
I heard Michael Dowling, the mortgage broker guy, on Newstalk earlier mention that this mortgage scheme would be capped at 35% of disposable income.
 
So if I’m on €50k a year and I want to get a cheap mortgage, I simply apply to two of the conventional lenders, and show up to the meetings stinking of gargle and dressed as a member of Al Queda?

That can be arranged...
 
And don't forget that, despite the much lower rates of interest charged by the local authorities, their arrears rates are huge.

Local authorities simply don't have the skills to issue, manage and collect such loans.

If someone doesn't pay their mortgage, what does the local authority do? Repossess the house and then face the prospect of rehousing them as they are homeless?

Brendan
 
Maybe this cud be opened up to existing mortgage customers who are stuck with their current provider on high rates and unable to move. ( Danske )
Ironically we meet all the requirements to qualify and the max loan available wud comfortably cover us as well.!!
Life changing if only possible..
 
Brendan Burgess said:
And don't forget that, despite the much lower rates of interest charged by the local authorities, their arrears rates are huge.

Local authorities simply don't have the skills to issue, manage and collect such loans.

If someone doesn't pay their mortgage, what does the local authority do? Repossess the house and then face the prospect of rehousing them as they are homeless?

Brendan
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The part of the country I come from what happened in the past people who could get bank loans were also able to come up with the paper to fit the requirement there was no problem with repayments in fact once the were able to get a better long term rate they paid off the council loan,

Is there any cap on the cost of house in other words if I had 200000 in savings could I buy a house worth 450000 house once i met the salary requirement and get the paper work past local council on a nod and wink vote for me next time

If the problem is shortage of housing this will do nothing to help,

In parts of the country where there are no shortage of housing councils will also get this money sucking money from where we need to build more houses,
 
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Delboy said:
I heard Michael Dowling, the mortgage broker guy, on Newstalk earlier mention that this mortgage scheme would be capped at 35% of disposable income.
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According to Deloitte's tax calculator, a single person with a gross income of €50k should have a disposable income of €36,548. 35% of €36,548 works out at €12,792, or €1,066 per month.

By my calculations, the monthly payments on a €250k mortgage, at a 2% fixed rate, over a 25 year term works out at €1,060 per month.
 
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