EBS rule change makes it harder for FTBs

Zamboni

EBS RULE CHANGE MAKES IT HARDER TO GET MORTGAGE
The EBS and its broker division, Haven, have changed their mortgage-qualifying criteria and made it more difficult for first-time buyers to get a mortgage.
Brokers said that someone on the average industrial wage would now find it almost impossible to qualify for a home loan - particularly if they are buying alone.
The Irish Independent has also learnt that the building society will no longer provide mortgages for apartments in towns outside the main cities of Dublin, Cork, Limerick and Galway and the larger commuter towns. EBS, AIB and Bank of Ireland are regarded as the only three lenders in the market prepared to advance mortgages to first-time buyers. But now EBS is scaling back the amount of a mortgage applicant's income it will accept as the basis for calculating how much it is prepared to lend. For someone with an income of €40,000, the lender will only advance them a mortgage amount where the repayments do not exceed 30% of their disposable (or after-tax) income. This is because the lender is forcing them to set aside more money for day-to-day living expenses. EBS and Haven will now only take account of 75% of the second income when a couple jointly apply for a mortgage.

http://www.rte.ie/business/2010/0604/presswatch.html

and

http://www.examiner.ie/breakingnews/business/ebs-mortgage-restrictions-may-spread-to-other-lenders-460362.html


Just another reason why the property market is only going downwards...

gurramok

Look at this link as well http://www.rte.ie/business/2010/0604/mortgage.html

Who the hell are these so called 'consumer groups' that are concerned about the tightening of mortgage criteria?

FFS, EBS are doing the consumer a favour here!!

rightwingdub

I wonder when Bank of Ireland and AIB will follow suit, apparently though someone still on €37k per year will still be able to get a mortgage loan up to €180k, personally I don't think any single person should be allowed get a mortgage more than 3.75 times their salary and ant future mortgages for couples should be at a maximum of 4 times their salary.

House prices are hear to fall for the next couple of years, hopefully I'll be able to buy in 2012 or 2013.

dan_d

Whoooooooooo (whistling sound!!!):eek:

They're some serious criteria there. It's actually great to see - and if it spreads it will probably cut the floor from under the property market...I'm thinking prices will plunge.

At the same time it makes me red hot angry to think that the country had to be let get to this state in order to make the banks cop on, and regulation to tighten up.

What happens to the generation of people stuck in 30 year mortgages for sums in the hundreds of thousands?? (and I know it's their own fault blah blah, but the banks played as big a hand in this as everyone else, and they were actually qualified to understand what was happening - I don't buy the "we couldn't have seen it coming" crap for one second)

Treehouse72

^^ From that RTE story ^^

EBS is one of the few financial institutions still offering mortgages, particularly to first-time buyers.

Huh? Are banks giving out mortgages or are they not? Don't BoI claim to be giving out 100 a week or something? I haven't a clue in all honesty what the hell is going on. The lack of transparency on any of this is maddening.

Anyway, I wonder what will happen to Dublin apartment prices if the EBS action becomes widespread practice. If they'll only give 85%, then for an apartment priced at €250,000 the buyer will need over €37,000 deposit.

Having the ability to save that amount does not compute with what €250,000 could buy you. If you can save that amount, your salary is way too high for the shoebox rubbish in Docklands you could get.

rightwingdub

Treehouse72 wrote: »

^^ From that RTE story ^^

Huh? Are banks giving out mortgages or are they not? Don't BoI claim to be giving out 100 a week or something? I haven't a clue in all honesty what the hell is going on. The lack of transparency on any of this is maddening.

Anyway, I wonder what will happen to Dublin apartment prices if the EBS action becomes widespread practice. If they'll only give 85%, then for an apartment priced at €250,000 the buyer will need over €37,000 deposit.

Having the ability to save that amount does not compute with what €250,000 could buy you. If you can save that amount, your salary is way too high for the shoebox rubbish in Docklands you could get.

People should have to put down a minimum 10% deposit on a house or an aprtment, its a shame such rigourous criteria didn't apply from the late 90's otherwise the Irish economy would not have endured such a spectacular crash.

dan_d

rightwingdub wrote: »

People should have to put down a minimum 10% deposit on a house or an aprtment, its a shame such rigourous criteria didn't apply from the late 90's otherwise the Irish economy would not have endured such a spectacular crash.

Hence my anger. I'm no economist, but even I knew what was happening was wrong....

ricman

This should have been done in 2003, people should have x amount left over after paying the mortgage and the banks know apartments outside citys .large towns are overvalued.They are doing ftbs a favour .
I Heard the ebs interview on newstalk and the ebs said if criteria are tightened up then it will be up to sellers to bring the price down.
The banks dont want to be caught out again giving loans on overvalued property to ftbs.They expect aib and boi to follow suit, re stricter criteria for loans.
This will just push prices down outside the citys.

billybigunz

EBS rule change makes it harder for FTBs

Nothing harder about paying less for your home. Freely available credit has done so much harm to this country. Why were idiots scrabbling around trying to eek out 10x mortgages when they should have been campaigning to restrict this to 4x.

Wild_Dogger

gurramok wrote: »

FFS, EBS are doing the consumer a favour here!!

Its great news for the FTB , not so good for others

rightwingdub

billybigunz wrote: »

Nothing harder about paying less for your home. Freely available credit has done so much harm to this country. Why were idiots scrabbling around trying to eek out 10x mortgages when they should have been campaigning to restrict this to 4x.

Very well said, when I'm looking to take out a mortgage, I'll be looking to put down a minimum 12% deposit, probably as high as 15%, easy credit has destroyed this country, hopefully, we'll see a return to good old fashioned prudence in Ireland.