Getting a Mortgage

pjwhite99

Hi

I heard 1 time if 2 or 3 banks turn you down for a Mortgage that you can apply to get a council mortgage, but you dont have to buy a council house would this be right any1 know?

accensi0n

pjwhite99 wrote: »

Hi

I heard 1 time if 2 or 3 banks turn you down for a Mortgage that you can apply to get a council mortgage, but you dont have to buy a council house would this be right any1 know?

So anyone that wanted to apply for a council mortgage could just go to a few banks first and ask for a €100 million mortgage?

QuiteInterestin

I know this is the way it was years ago, not sure about now.

My parents built their house about 30 years ago (early 80s, high interest rates etc) and had to get their mortgage from the council. The council were alot stricter then the banks in relation to drawing down the mortgage etc. They could only draw down part of the mortgage once part of the work was complete and had been inspected and approved by the council. To tide them over in between they had to get 'bridging loans' which had ridiculous interest rates (around 20% I think) so even when they did draw down on the mortgage, they had to pay back the 'bridging loan' as well as the interest it had accumulated. It definitely wasn't the easier alternative at the time, not sure about now.

Personally, if a bank was unwilling to give me a mortgage, I wouldn't be looking for alternatives and instead work at their reasons for turning me down e.g. try and build up my savings, clear any remaining debt etc. They're probably doing you a favour since prices look set to fall for another few years ( I hope), it would give you time to save a bigger deposit and hopefully get a better deal further down the line.

lpjonesy

80 % of mortgage applications are turned down . If a bank gives 100k mortgage @ 4% they have to finance that using deposits at 3% so there is only 1000 euro a year profit for them ....hardly worth it , they would prefer to loan out to businesses at 8% or more for short term funding or give car loans at 7.5% .
Banking for mortgages doesnt pay , they are trying to deleverage ie get rid of mortgage loans not issue new ones

liger

pjwhite99 wrote: »

Hi

I heard 1 time if 2 or 3 banks turn you down for a Mortgage that you can apply to get a council mortgage, but you dont have to buy a council house would this be right any1 know?

http://www.citizensinformation.ie/en/housing/owning_a_home/help_with_buying_a_home/local_authority_mortgages.html

Wondering1

This is correct, if u are turned down by 2 financial institutions u can then apply to the county council for a mortgage. U must get the 2 letters from each bank/building cociety that turned u down. If u are a single applicant u must earn under 45k and joint applicants 75k. The good thing about council mortgage is they require only a 3% deposit. But I have heard that very few people have got a council mortgage in recent years as the council have no money. As the application goes, they are every bit as strict as the bank and require 12 months savings statements and u must be completely loan free. This is the info giving to me from Cavan county council, i'd say it is the same with them all