Central Bank to limit amount banks lend for home purchase

Greyian

El_Dangeroso wrote: »

You don't pay DIRT on savings for a house.

You do, but you get it back if you buy, but only if you're a first time buyer, and only if you buy before the end of 2017.

Bob24

Greyian wrote: »

You do, but you get it back if you buy, but only if you're a first time buyer, and only if you buy before the end of 2017.

I was not aware of this. How do you clame it back?

johnp001

Bob24 wrote: »

I was not aware of this. How do you clame it back?

http://www.revenue.ie/en/tax/dirt/first-time-buyers-relief-faqs.html

dr.fuzzenstein

johnp001 wrote: »

http://www.revenue.ie/en/tax/dirt/first-time-buyers-relief-faqs.html

The gov certainly keeping that one quiet.
They bank on the fact that people will pay up and never claim it back. Plus having terms that make it awkward and complicated, instead of just working with banks to offer savings accounts for property. They absolutely don't want to give anyone a break.

Greyian

dr.fuzzenstein wrote: »

The gov certainly keeping that one quiet.

It's not like they outlined it in the budget when it was announced...oh wait, yes they did.

MouseTail

Greyian wrote: »

It's not like they outlined it in the budget when it was announced...oh wait, yes they did.

And it was covered in the post budget supplements in the papers.

relax carry on

dr.fuzzenstein wrote: »

The gov certainly keeping that one quiet.
They bank on the fact that people will pay up and never claim it back. Plus having terms that make it awkward and complicated, instead of just working with banks to offer savings accounts for property. They absolutely don't want to give anyone a break.

http://m.independent.ie/business/budget/news/dirt-deal-for-new-buyers-30665237.html

http://www.finance.gov.ie/news-centre/press-releases/first-time-buyers-dirt-relief-%E2%80%93-applications-can-now-be-made-revenueie

flintash

Will the end of 2017 be the rush for end of DIRT relief....? So whats the plan for the end of '15 and '16 ??Go figure....

Bob24

flintash wrote: »

Will the end of 2017 be the rush for end of DIRT relief....? So whats the plan for the end of '15 and '16 ??Go figure....

I doubt so ... I was looking at it and given the restrictions I don't think anyone will be entitled to more than a few hundred euros.

Glenbhoy

Bob24 wrote: »

I doubt so ... I was looking at it and given the restrictions I don't think anyone will be entitled to more than a few hundred euros.

Exactly, it's not significant and even though it was launched in a blaze of publicity it took the revenue several months to come up with details of the scheme and how it would actually work.
Say a FTB has managed to save €50,000 over the years from 2014 to 2017, assume that they've been using the best deposit rates on the market (regular saver rate, 1,000 per month -avg. 3.5%) and that on average they have effectively had €25,000 on deposit for the four years - total interest would be approx €3,500, say DIRT at 41% = €1,435 which can be refunded.
The example is pretty rough and ready but should be in the ballpark.

dr.fuzzenstein

Glenbhoy wrote: »

Exactly, it's not significant and even though it was launched in a blaze of publicity it took the revenue several months to come up with details of the scheme and how it would actually work.
Say a FTB has managed to save €50,000 over the years from 2014 to 2017, assume that they've been using the best deposit rates on the market (regular saver rate, 1,000 per month -avg. 3.5%) and that on average they have effectively had €25,000 on deposit for the four years - total interest would be approx €3,500, say DIRT at 41% = €1,435 which can be refunded.
The example is pretty rough and ready but should be in the ballpark.

Well, it's better than a slap in the face with a wet fish...

johnp001

dr.fuzzenstein wrote: »

Well, it's better than a slap in the face with a wet fish...

For sure, I can't see the typical payout being anywhere near that though. Probably a couple of hundred will be typical.

Bob24

johnp001 wrote: »

For sure, I can't see the typical payout being anywhere near that though. Probably a couple of hundred will be typical.

Yes - Glenbhoy's calculations are correct but he based them on a fairly saving interest rate on the saving account (fair enough, he was illustrating the best case scenario).

Plus his example implies a property valued at least 250k euros. So even if people decided to overbid someone else to catch the the DIRT refund, and most they would increase there budget by something like 1000 euros (i.e. 0.4%) and at the end of the day the saving for them would be very minimal. Nothing to get someone to enter panic mode.

What is the story with mortgage approvals expiring?

Colleague was on to BoI today about his mortgage. Has 'househunter' approval - which gives blanket approval for a specific amount rather than on a named property.

Question was whether this expires this month as approval was given before Christmas. Bank says no need to renew 'house-hunter' approval - it just rolls on.

However, had it been approval on a specific house, it would indeed expire after six months and a new application would have to be made, subject to the new rules.

I had thought a load of AIPs would be expiring this summer, taking some people into a lower price bracket as they'll get less credit under the new regime. Am I wrong?

Michael D Not Higgins

Deleted User wrote: »

What is the story with mortgage approvals expiring?

Colleague was on to BoI today about his mortgage. Has 'househunter' approval - which gives blanket approval for a specific amount rather than on a named property.

Question was whether this expires this month as approval was given before Christmas. Bank says no need to renew 'house-hunter' approval - it just rolls on.

However, had it been approval on a specific house, it would indeed expire after six months and a new application would have to be made, subject to the new rules.

I had thought a load of AIPs would be expiring this summer, taking some people into a lower price bracket as they'll get less credit under the new regime. Am I wrong?

Until there's a house and until an offer is made and the bank undergoes the underwriting checking, I wouldn't trust the number given as AIP.

Senecio

Deleted User wrote: »

I had thought a load of AIPs would be expiring this summer, taking some people into a lower price bracket as they'll get less credit under the new regime. Am I wrong?

My understanding is that an AIP is not a mortgage offer and when it comes time the mortgage will be subject to current rules regardless of whether the AIP is still in place.

Happy to be corrected by someone more knowledgeable.

BoI make out that theirs is different to AIP because the house-hunter mortgage is full approval (i.e. you go through underwriting process rather than just plugging unverified info into a calculator).

Michael D Not Higgins

Deleted User wrote: »

BoI make out that theirs is different to AIP because the house-hunter mortgage is full approval (i.e. you go through underwriting process rather than just plugging unverified info into a calculator).

I'd still be wary til the mortgage is granted.

Agreed. Plenty of houses going sale agreed only to return to market a few weeks later when the winning bidder finds they can't get the funds.

What I'm wondering is whether we really should expect a dip in house prices from the summer when people with mortgage approval have to reapply.

If banks are finding 'smart' ways around the rules - like offering everlasting 'house-hunter' approval under the old rules - I'd be a bit less optimistic about the full impact of the CB rules being imminent.

It's just hard to imagine that you could drag out one of these house-hunter approvals for a year or so. The banks could hardly grant a 90% LTV with 4x LTI next spring and claim it was issued under the old rules because they had an agreement prior to the introduction of the new lending caps. Or could they...?

Popmart97

Not sure if this the right thread however I'll ask anyway

We have mortgage approval since March, due to run out in August. New rules have really kicked us into realty in terms of what we can afford (I know, its for the best long term!!). It seems every house we like is just that 10-15k above what we can afford.

My OH is seriously considering taking a job offer she has received in the meantime, which would give her an extra 8K pa. They have even offered to give us any official documents needed stating the position is full time with no probation period etc.

My question is, would the bank increase their offer based on the information above? I'm concerned that if we raise the issue, they might retract the original offer and tell us to re-apply in 6 months

Thanks!

Glenbhoy

Popmart97 wrote: »

Not sure if this the right thread however I'll ask anyway

We have mortgage approval since March, due to run out in August. New rules have really kicked us into realty in terms of what we can afford (I know, its for the best long term!!). It seems every house we like is just that 10-15k above what we can afford.

My OH is seriously considering taking a job offer she has received in the meantime, which would give her an extra 8K pa. They have even offered to give us any official documents needed stating the position is full time with no probation period etc.

My question is, would the bank increase their offer based on the information above? I'm concerned that if we raise the issue, they might retract the original offer and tell us to re-apply in 6 months

Thanks!

I asked my mortgage adviser what the consequences of my moving jobs in the approval period would be, she said that there wouldn't be any as long as there was no probationary stipulation (unlikely in my profession). She also mentioned that an increase in income would be positive and the application could indeed be rejigged, but it would be a new application (AIB).

ec18

Has anyone noticed that the online how much can i borrow calculators are still using 4.5 times gross salary? seems a bit strange 4/5 months into the new rules?

mel123

Deleted User wrote: »

What is the story with mortgage approvals expiring?

Colleague was on to BoI today about his mortgage. Has 'househunter' approval - which gives blanket approval for a specific amount rather than on a named property.

Question was whether this expires this month as approval was given before Christmas. Bank says no need to renew 'house-hunter' approval - it just rolls on.

However, had it been approval on a specific house, it would indeed expire after six months and a new application would have to be made, subject to the new rules.

I had thought a load of AIPs would be expiring this summer, taking some people into a lower price bracket as they'll get less credit under the new regime. Am I wrong?

Granted I have approval under the new rules, but its with BOI. I got an official offer and I am a house hunter. I got the forms out in the post with the official offer and I had to sign them and send them back to accept the offer.
If I were your friends, I wouldn't be banking (no pun intended) on that offer, because it doesn't sound like they really have firm mortgage approval.

No sign of mortgage lending dipping yet: Mortgage lending surges in first quarter of 2015

Of course, it is possible that this is a big rush to draw down mortgages under the old rules. Looks like we'll have to wait another three months to see how Q2 was affected.

audi12

Deleted User wrote: »

No sign of mortgage lending dipping yet: Mortgage lending surges in first quarter of 2015

Of course, it is possible that this is a big rush to draw down mortgages under the old rules. Looks like we'll have to wait another three months to see how Q2 was affected.

Drawndown is the key word not new mortgages lucky the new rules were brought in to stop all the sheep going out and inflating the market further uneducated idiots

That is drawdown data, is it not?

Also:

The average loan size rose to € 175,016 in the first quarter, up 5.5pc on the previous quarter.

That's an interesting one. Hard to imagine that this figure would keep rising at that rate when people have to put up more of the money themselves.

audi12

Deleted User wrote: »

That is drawdown data, is it not?

Also:


That's an interesting one. Hard to imagine that this figure would keep rising at that rate when people have to put up more of the money themselves.

Are irish people the most greedy uneducated people in the world when it comes to money i wonder

The_Morrigan

Audi12 stop with the uncivilised and downright rude comments. If you can't do that then, please don't post in this forum.

johnp001

Deleted User wrote: »

That is drawdown data, is it not?

Also:

The average loan size rose to € 175,016 in the first quarter, up 5.5pc on the previous quarter.

Or another way of looking at the same data:
FTB and Mover Purchaser loans make up around 90% of loans, both are down on the previous 2 quarters.

Deleted User wrote: »

That's an interesting one. Hard to imagine that this figure would keep rising at that rate when people have to put up more of the money themselves.

Macro-prudential rules would not really have had much effect in Q1 2015 only being announced late into that period.
It seems highly likely that they will intensify the downward trend for FTB and Mover Purchaser loan values in subsequent quarters though.

johnp001

johnp001 wrote: »

Or another way of looking at the same data:
FTB and Mover Purchaser loans make up around 90% of loans, both are down on the previous 2 quarters.




Macro-prudential rules would not really have had much effect in Q1 2015 only being announced late into that period.
It seems highly likely that they will intensify the downward trend for FTB and Mover Purchaser loan values in subsequent quarters though.

Explain that to me? How did FTBs and movers borrow less on average but they say the average mortgage is up?
Genuine question. I don't understand it.