It creates market uncertainty. If NAMA does this for 115 houses initially, potential purchasers of other NAMA property will hold off purchasing in the expectation that the scheme will be extended.
This really is a shocking mistake by NAMA. I am really surprised that Finance or Europe did not stop it.
I'd be very interested to see how they intend on valuing the properties at the end of the 5 years.
400k for a 4 bed detached house in the Naul, with no land.... not in a million years......this is a joke of a disposal.
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That property is worth about 300k if even in today's market.
Know someone who lives in Delvin Banks. Nothing wrong with the houses. In fact they are well built. Just a developer who has an inflated sense of what the houses are worth.
This scheme sparked my interest for two reasons;
1. One of the developments has been a focus of ours for a few years, however knowing the price would fall we held off
2. We would be First time buyers
I've read all the information on nama.ie, but one thing I need to confirm. Say, for example, the property we purchase tomorrow through this scheme is 200K. We would pay 20k deposit, and draw down a 70% mortgage.
But what happens in year 5, with the deferred Mortgage Installment? It would be 40K if the value of the property purchased above increases. Does that mean that in year 5 the buyer would be expected to make a large payment of 40k? Or does the mortgage repayment amount simply increase for the remainder of the mortgage term from year 5 once the property has been valued?
My understanding is you would be drawing down 90% not 70%, if the property has fallen 20% over the 5 years your mortgage is then reduced by the 20% that nama is supposed to redeem at that stage. If it rises it's yours, nama is giving the bank an insurance policy from what i can see.
You make your initial repayments based on a mortgage of €180k which means that by year 5, you will have paid off more of the capital than if you had actually paid €180k for it.
This is not correct.
The bank pays the €40k to the seller in 5 after 5 years.House price |€200k
10% paid by buyer|€20k
70% mortgage drawn down and paid to seller|€140k
If property does not fall below 200k, bank increases mortgage by|€40k
You make your initial repayments based on a mortgage of €180k which means that by the end of year 5, you will have paid off more of the capital than if you had actually paid €180k for it.
If €200k is a fair price in the market for the property now, then this is a good deal. Hard to value the deal, but it's worth somewhere between €8k and €48k.
If the property remains worth exactly €200k, you will be paying €160k now and €40k after 5 years. The interest on €40k over 5 years would be around €8k.
By the way the ones i pointed out yesterday have now dropped in price, by a fair whack...
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I mean could they not even get the right prices up for the launch of their big fanfare, typical irish professionals.
Eh, if you are paying payments on a mortgage of 180k, then you might as well say you have drawn down 90%. If the house does not fall below the current market value in 5 years, then your repayments will stay the same, no ?
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