Income Multiple Limits on Mortgages

Dannyboy83

Scofflaw wrote: »

No, I'd expect actual levels of lending to rise - even based on the hoops you've described. I'm just not expecting them to soar, if you see what I mean.

The market will find a new normal, in which the expectations of the majority are somehow satisfied.

cordially,
Scofflaw

Well, the first of my friends has started looking through job sites in England.

I genuinely think this is going to be a critical blunder.

We will social house those who need to be subsidised and export those who are needed to do the subsidising.

10% for an FTB makes sense, 20% is an over-reaction.

Brussels Sprout

Dannyboy83 wrote: »

That's the point I was making.

And it is now factored in automatically for couples.

As stated - I bought a house in April, I have been through the present system - the entire process has changed since '08.

........


......

When they asked what options they have now, they were told, they should have thought about that before they had kids!
Anyone on an average industrial wage with children just cannot qualify.
.
.

A 600k mortgage is an edge case - I'd imagine that's a very high income couple with equity and a large deposit. Just the property tax on that alone would be crippling to anyone else.

Very interesting and informative post but I call shenanigans on the bit in bold. Nobody would be so idiotic as to say this to someone's face for many different reasons.

Dannyboy83

Brussels Sprout wrote: »

Very interesting and informative post but I call shenanigans on the bit in bold. Nobody would be so idiotic as to say this to someone's face for many different reasons.

I know, I was sceptical myself, it's fairly politically incorrect, but I've heard it on a few different occasions now to be honest.

My experience was that a lot of the local branches around Cork are not lending and coming up with all manner of excuses - I heard a number of different slightly insulting things myself (in particular, the remarks about having funds 'helicoptered' to your account - this was put in a very disparaging manner).

I also tried to use connections and so on, as people alluded to earlier in the thread. It was all pissing in the wind.

I gave up dealing with the local incompetents and went to AIB Mortgages Direct (online) - it was night and day.

They just cut the crap, did a means assessment, and were up front about what was on the table, very quick to reply and competent at the job.
I'd recommend them to anybody. (they are very thorough tho, so don't bother chancing your arm if you don't qualify)

draiochtanois

This post has been deleted.

Julia85331

FreudianSlippers wrote: »

Tough. It's this entitlement culture that ruins this country.

What's sense of entitlement? Both myself and my partner work full time and we will never be able to save a 20% deposit. We are paying €16k a year rent and €10k childcare alone. That's before buying groceries or paying a bill.
Our rent at €1300 a month would be reduced to a mortgage payment of €750
More money back into the economy and a higher standard of living.
We've been renting for four years and have paid around €55k in rent and it's going up every year.
I really see no sense of entitlement in us or our friends in the same position.
The lady in the bank even told us not to go on holidays or buy Desiegner clothes ha! She referred to €150 I spent in next!
Really don't understand how this is a good thing for anyone .
It will see investors snapping up property's and a reduction in first time buyers

realitykeeper

Limiting the amount banks can lend is fine but in a way it is not the main concern. Irish banks are insolvent. Had the government not bailed them out they would not have been in a position to lend. As a consequence of the government bailout of the banks, the government itself had to be bailed out.
When people talk about a housing bubble they are missing the bigger picture. A far bigger bubble now exists in the from of government debt. The ECB may acquire some of this debt but that will not let Ireland off the hook because the debt has to be securitized.

djpbarry

Julia85331 wrote: »

Our rent at €1300 a month would be reduced to a mortgage payment of €750

Can I ask what you are basing that on? Because it seems like a huge discrepancy.

Larry Wildman

djpbarry wrote: »

Can I ask what you are basing that on? Because it seems like a huge discrepancy.

It's about right actually.

A mortgage of €160k is around €750 per month over 30 years.

The same €200k apartment can pretty easily be let for €1,300 a month.

Idbatterim

We will social house those who need to be subsidised and export those who are needed to do the subsidising.

10% for an FTB makes sense, 20% is an over-reaction.

agreed, a lot of the ones we want to stay are leaving due to no jobs and or the ridiculous taxation rates on average incomes. Property prices are another issue in Dublin in particular.

In relation to the gambling as they have such an issue with it, do they ask for a sworn oath that you dont go in and bet with cash, put it on PayPal? I go to vegas regularly enough, will they be asking for proof that I didnt gamble? :rolleyes:

serious bunch of hypocrites, their gambling cost us what 40 odd billion? My dad was looking for a mortgage in 1989, refused everywhere, for a 16,000 pound mortgage on a house in Dublin 14. Luckily he had worked on a bank managers house some years before and he approved the mortgage. He told the bank manager of the bank he was with at the time (after refusal), dont forgot who pays your wages, would love to have been there for that

djpbarry

Larry Wildman wrote: »

The same €200k apartment can pretty easily be let for €1,300 a month.

There's absolutely no way a flat being rented for €1,300 per month would be available to buy at €200k. You're undervaluing by about €50k, at least.

draiochtanois

This post has been deleted.

Larry Wildman

djpbarry wrote: »

There's absolutely no way a flat being rented for €1,300 per month would be available to buy at €200k. You're undervaluing by about €50k, at least.

Sorry, but you're totally wrong.

Dannyboy83

draiochtanois wrote: »

This post has been deleted.

I was renting this for 1k per month.
http://www.daft.ie/lettings/bride-holm-apt-old-mallow-road-near-cork-blackpool-cork/1470924/
The Landlord kept my deposit.
After that experience, I knew if I was going to stay in Ireland, I knew I would have to buy.
Threshold and PRTB are hopeless (or were at least).

It was subsequently for sale for 110k and it couldn't be shifted.
Now it's rented for 850.

Is it even worth 100k I wonder?
92k over 30 years = 465

I pity anyone facing long term renting in Ireland.
You have no rights and no protection.

bit of a bogey

What do people think the impact of these mortgage limits will be on the banks?

In reality, the banks don't give out mortgages to those they who can just pay. They give them out based on the speculation that they are going to make money.

With a potential curtailment of property price increasing and a reduction in allowable loan amounts, they are surely going to see an impact to their profits. i.e. people wont be able to get such sizable loans, will have more affordable monthly repayments and can hence reduce the repayment time.

How are the banks going to offset any losses? Hard to see them just swallowing it?

Frank Lee Midere

Julia85331 wrote: »

What's sense of entitlement? Both myself and my partner work full time and we will never be able to save a 20% deposit. We are paying €16k a year rent and €10k childcare alone. That's before buying groceries or paying a bill.
Our rent at €1300 a month would be reduced to a mortgage payment of €750
More money back into the economy and a higher standard of living.
We've been renting for four years and have paid around €55k in rent and it's going up every year.
I really see no sense of entitlement in us or our friends in the same position.
The lady in the bank even told us not to go on holidays or buy Desiegner clothes ha! She referred to €150 I spent in next!
Really don't understand how this is a good thing for anyone .
It will see investors snapping up property's and a reduction in first time buyers

Your mortgage payment of 750 would barely get a loan of 120k. Why can't you save 20k?

Frank Lee Midere

Larry Wildman wrote: »

It's about right actually.

A mortgage of €160k is around €750 per month over 30 years.

The same €200k apartment can pretty easily be let for €1,300 a month.

In which case she would need the 40k. Everybody here is assuming a 3.9% interest rate. But you only get that with a 20% deposit anyway.

Frank Lee Midere

Larry Wildman wrote: »

Sorry, but you're totally wrong.

Try and link to one then? Should be easy.

Frank Lee Midere

draiochtanois wrote: »

In Cork you can apartments that rent for 1000 per month for 90k so it's entirely believable.

Apartments are undervalued relative to the cost of building them and what they rent for.

And in Cork county there are lots of 3 bed semis being sold for less than the construction costs.

Nobody is denying that outside Dublin prices are cheap. Dublins recent surge is the issue and the reason the CB intervened. As far as I know the ECB is taking over that role next week after the stress tests ( which will quite probably be a shock to the Irish banks) and I guess they will tighten up credit.

The best thing the ECB could do is loosen credit to developers and keep it tight for house buyers.

bit of a bogey

Frank Lee Midere wrote: »

Try and link to one then? Should be easy.

http://www.daft.ie/lettings/the-rectory-stepaside-dublin/1497318/

http://www.daft.ie/sales/61-the-rectory-stepaside-dublin/944373/

Scofflaw

bit of a bogey wrote: »

What do people think the impact of these mortgage limits will be on the banks?

In reality, the banks don't give out mortgages to those they who can just pay. They give them out based on the speculation that they are going to make money.

With a potential curtailment of property price increasing and a reduction in allowable loan amounts, they are surely going to see an impact to their profits. i.e. people wont be able to get such sizable loans, will have more affordable monthly repayments and can hence reduce the repayment time.

How are the banks going to offset any losses? Hard to see them just swallowing it?

I'm not sure how the banks "give them out based on the speculation that they are going to make money". If you buy a property with a €200k mortgage, and the value of the property appreciates by 50%, the bank still only gets back the €200k plus interest, exactly as it does if the property remains the same price or depreciates.

What banks get out of a bubble is more and bigger loans, and less risk - while the bubble lasts - or non-repayment, because someone who can't meet the mortgage repayment out of income can meet it out of appreciation.

Unless you mean that a lower value property market overall means lower profits for the banks? It does, but it also means lower risk. And, after all, the reason the banks are currently hugely in debt is that what appeared to be hugely profitable lending opportunities were actually just hugely risky ones.

There are two modes of profitable operation for banks, a low-risk low-profit one that's sustainable in the long-term, and a high-risk high-profit one that's not. We're talking about the banks returning to the first model for as long as it takes everybody to forget that the exciting option invariably blows up in everybody's faces - which is maybe 10 years if we're lucky.

cordially,
Scofflaw

Cleveland Hot Pocket

Dannyboy83 wrote: »

I pity anyone facing long term renting in Ireland.
You have no rights and no protection.

As a 10 year renter in Dublin (and now Meath) to date, you have plenty of protection.
Google Part 4 tenancy, and you will see your notice entitlements and so on.
Also, it is pretty difficult to legally evict a tenant.

The landlord keeping your deposit is only because you let him. You should pursue to the PTRB and get a judgement against the landlord and then follow up with the sheriff to enforce if needed.
(Or in future, stay the final month and use the deposit to pay for it. Legally the landlord cannot evict you without giving 14 days notice to pay and 28 days notice after that)

djpbarry

draiochtanois wrote: »

This post has been deleted.

According to the latest Daft reports, a 2-bed in Cork City will rent for €830 and sell for €97k. Sure, there might be the odd place that rents for €1,000 and sells for €90k, but on average, that’s not going to be the case.

djpbarry

Larry Wildman wrote: »

Sorry, but you're totally wrong.

No, I’m not. For example, average rents for 2-bed flats in Dublin City Centre are currently €1,200 – 1,300, while the average sale price for such a property is €240k.

djpbarry

Dannyboy83 wrote: »

I pity anyone facing long term renting in Ireland.
You have no rights and no protection.

Nonsense.

There is plenty of protection for tenants in Ireland. The problem is, most seem unaware of their rights.

bit of a bogey

Scofflaw wrote: »

Unless you mean that a lower value property market overall means lower profits for the banks? It does, but it also means lower risk. And, after all, the reason the banks are currently hugely in debt is that what appeared to be hugely profitable lending opportunities were actually just hugely risky ones.

This is more so my point in that they are going to be less profitable. Less Risk = Less potential profit but even more so in that smaller loans = less interest, less profit. I’m intrigued to see how this pans out as I can’t see the banks simply swallowing a reduction in profits. Like most corporations, I expect them to seek compensation through other revenue streams.

draiochtanois

This post has been deleted.

Cleveland Hot Pocket

draiochtanois wrote: »

This post has been deleted.

Self protection tbh.
Lots of LL don't return the deposit.

If it goes to court it would be laughed out. LL will say buyer owes me one month rent and the buyer would say the LL owes me my deposit of 1 month's rent.

FreudianSlippers

Cleveland Hot Pocket wrote: »

Self protection tbh.
Lots of LL don't return the deposit.

If it goes to court it would be laughed out. LL will say buyer owes me one month rent and the buyer would say the LL owes me my deposit of 1 month's rent.

Under €2,000 it would go to the small claims court and it would not be laughed out.

Cleveland Hot Pocket

FreudianSlippers wrote: »

Under €2,000 it would go to the small claims court and it would not be laughed out.

LL = He owes me 1000
Tenant = He owes me 1000


How would that not be laughed out?

Also I don't think it can go to the small claims court over rent, doesn't it have to go via PTRB

FreudianSlippers

Cleveland Hot Pocket wrote: »

LL = He owes me 1000
Tenant = He owes me 1000


How would that not be laughed out?

Also I don't think it can go to the small claims court over rent, doesn't it have to go via PTRB

No you're right, I was thinking of specific rental deposits (i.e. holiday homes, etc.) - the rest go to the PTRB. The landlord would have to prove that they had good reason for keeping the deposit though. Presumably, the tenant could easily show that their rent is up-to-date.