remortgage possible with affordable housing?

Discussion in 'Affordable housing and shared ownership' started by carrighead, 9 Jun 2011.

  1. carrighead

    carrighead Registered User

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    just wondering is it possible to remortgage on an AH? would like to build an extension... i know there was a thread on here before, but i cant seem to find it at the moment.
    thanks
     
  2. Brooklyn

    Brooklyn Frequent Poster

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    It is possible - I did it. If your property is still worth more than you paid for it, however, you will have to pay the clawback.
     
  3. carrighead

    carrighead Registered User

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    hi brooklyn, thanks a million for your reply, thats great news.. will start planning asap :)
     
  4. Society

    Society Frequent Poster

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    Brooklyn, how did you remortgage, I thought that the law had to be changed to allow people to remortgage.
     
  5. Brooklyn

    Brooklyn Frequent Poster

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    No, it only has to be changed to allow people remortgage without triggering the clawback. There wasn't a clawback anyway in my case since the place is now worth less than what I paid for it.
     
  6. Tired Paul

    Tired Paul Frequent Poster

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    263
    Hi all, maybe ye could throw further light on this for me. I'm in an A/H house in cork since 2002 and have been told by the CC on numerous times that I can't re-mortage under any circumstances. So much so we put our house for sale 2 years ago (I know bad timing). We have since changed our minds but we are totally despreate and frustrated now as we need to build a sizeable extension to the side. CC loan will only cover a portion of the build and bank won't give us a large loan due to "Primary Charge" on the property. Can anyone please tell me how to get out of this god forsaken arrangement with the CC. Afforadble Housing........not in the slightest. More like...we have now, thanks and good luck. Ahhhhhhh.
     
  7. Brooklyn

    Brooklyn Frequent Poster

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    What is the basis for this policy?
     
  8. Green28

    Green28 Guest

    Brooklyn, did you manage to remortgage, remove the clawback and legally move out of the property, thereby converting it into an investment property? If so, I would be very interested in hearing how you did this?
     
  9. zen

    zen Guest

    Brooklyn
    Same question as Green28. My understanding is that the clawback always remained on the title deeds. The only way to remove it is to sell the property.

    I was informed by DCC
    if I remortgaged the property clawback would still remain!
    if I redemed the loan, the clawback would still remain!

    Did you remortgage with the council or did you remortgage with a new lender so you could change the term and conditions? Has the clawback followed you after the remortgage? This would be interesting to know.
     
  10. JBM14

    JBM14 Frequent Poster

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    Zen,

    Your post is spot on.
     
  11. zen

    zen Guest

    :)
    Was thinking of selling it to my girlfriend... for those of you who really want away from them, thats one way ;)
     
  12. Tired Paul

    Tired Paul Frequent Poster

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    Speaking to different staff in Cork Corpo gives little or no hope of getting out of this clawback issue. Different person, different answer. I know for a fact that 2 neighbours got re-mortages back in 2006 and the clawback issue has not followed them - I have seen the documentation and have even brought copies of it my own solicitor. When we enquired about it detail, and I mean very fine detail, it seems that Cork Corpo got "caught out" by releasing some lenders for re-mortage and ahve since closed the loop hole. Final word from them..clawback stays as is.
    Sick of it......
     
  13. Brooklyn

    Brooklyn Frequent Poster

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    No. As I said, there was no clawback since the value of the property is now less than what I paid for it. So I could remortgage but there was no clawback for me to repay. I am still obliged to repay the clawback if I sell within 20 years (assuming that the value goes back up again).

    This is only true if you're in the same boat as me i.e. you don't currently have a clawback to repay because the value of the property is so low. If your home is still worth more than you paid for it, then under the legislation as it currently stands you have to repay the clawback if you remortgage. If you go back through the archives on this board there have been many Parliamentary Questions quoting the Housing Minister to this effect. If DCC told you otherwise then they were wrong (that wouldn't be unusual where the DCC Affordable Housing section is concerned).
     
  14. Cheeus

    Cheeus Frequent Poster

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    Does anyone know how this works in reality? If you remortgage when the property is worth less than you paid for it you pay no clawback, but it would still be due on sale at a later date.

    If it is worth more than you paid for it, the clawback will be triggered.

    Does this mean that the best time to remortgage would be when it is worth just marginally more than you paid for it? Could you in theory pay the clawback, have clawback removed from the deeds and then down the road not have to pay clawback again even if you sell before 20 years is up?

    How would the council deal with someone selling for €100 more than they bought? Would that be the final amount they get in clawback? I bet no council can answer that.
     
  15. JBM14

    JBM14 Frequent Poster

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    Cheeus,

    I think there is a bit of confusion with the two options here.

    If you remortgage you do not trigger the clawback as you are still the owner of the house. All that changes is your lending provider.

    The clawback is triggered only if you sell your house. The deeds have to be signed over to someone else in order for the council to look for a clawback payment.

    I don't believe it is possible to remain the owner of a house and remove the clawback within the 20 year period specified but I am open to correction if anyone disagrees.
     
  16. Brooklyn

    Brooklyn Frequent Poster

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    417
    No, we've been over this time and time again. The original legislation was drafted, apparently inadvertently, in such a way as to include remortgage as a clawback-triggering event. Gormley as Minister met with Affordable Housing homeowners and agreed that this was never the intention and and promised to introduce amending legislation to remove this provision. Unfortunately, the legislation that was introduced contained another error, so that only future AH owners would be able to remortgage without triggering the clawback - existing AH owners remained subject to the original provision. Gormley's Junior Minister (Finneran) promised that this would be rectified, but when the next Planning Bill came in he said he had received legal advice that the amendment should not be included in that bill. The current Junior Minister (Penrose) has also promised to rectify the error but there are no Planning Bills before the Dáil at present so it's anyone's guess when/if this will actually happen.

    Well, that was the basis on which DCC persuaded me to remortgage - that it would be more advantageous for me to repay it now while the clawback amount was tiny than after values go back up again. This was before I had the valuation done and learned there was no clawback anyway. Of course, this is DCC so the usual health warning about their advice applies.
     
  17. JBM14

    JBM14 Frequent Poster

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  18. Tired Paul

    Tired Paul Frequent Poster

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    Hi JBM14, you have been informed this recently by Crok CC ??????? I'm very intrested in this as I've benn told numerous times to the contary. Any useful info to be passed on would be apprecited.

    Cheers,
     
  19. Brooklyn

    Brooklyn Frequent Poster

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    I don't know exactly which clause it is but it has been referred to by successive ministers on numerous occasions in Parliamentary Questions. Here is one example. (I think the bill referred to there is the one where the drafters accidentally only excluded future AH from the remortgage clawback.)

    I'd take the Minister's word over the council's, especially if Cork CC are anything like DCC in this regard.
     
  20. Tired Paul

    Tired Paul Frequent Poster

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    All,

    have just spent a very frustrating and annoying day in Cork CC. After getting bucket loads of info from everyone here, financial advice and legal advice, documents, proof of work, wages etc etc, went to Cork Cc today to meet with Law Dept offical regarding possible re-mortage. After spilling my heart out, citing my case and lots of nods of approval from CC, to be told "No". No to what i asked. Re-mortgage is not possible, not going to be done, no way no how. Ahhhhhhhhh