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LTV regulations

  • 03-11-2015 9:28am
    #1
    eoin956
    Closed Accounts Posts: 8 ✭


    I am trying to get my head around the recently introduced regulations by the central bank that basically say 1st time buyers can get 90% LTV and second time buyers max is 80%. There is a part of the regulation that says people in negative equity are outside the scope of this regulation. It doesn't say that those people (in negative equity) need to be bringing the debt with them to be outside the scope of the regulation.... Does that make sense??

    I suppose my interpretation is that if a person has a house, in negative equity, and decides to move house they are outside the scope of the regulation and so may be eligible for a LTV of more then 80%. If they decide to keep the first house and rent it out, they are still in negative equity and so they should be outside the scope of the regulation....

    Anyone have any other interpretation on this... I know it will ultimately come down to the bank making the decision to extend the loan facility but assuming that isn't an issue!!


Comments

  • #2
    killers1
    Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭killers1


    eoin956 wrote: »
    I am trying to get my head around the recently introduced regulations by the central bank that basically say 1st time buyers can get 90% LTV and second time buyers max is 80%. There is a part of the regulation that says people in negative equity are outside the scope of this regulation. It doesn't say that those people (in negative equity) need to be bringing the debt with them to be outside the scope of the regulation.... Does that make sense??



    I suppose my interpretation is that if a person has a house, in negative equity, and decides to move house they are outside the scope of the regulation and so may be eligible for a LTV of more then 80%. If they decide to keep the first house and rent it out, they are still in negative equity and so they should be outside the scope of the regulation....

    Anyone have any other interpretation on this... I know it will ultimately come down to the bank making the decision to extend the loan facility but assuming that isn't an issue!!

    If you are retaining your existing property the mortgage for your new purchase will be subject to LTV limits i.e. 80% finance unless you qualify for an exception. If you are selling your existing property and transferring the NE to the new one the rules don't apply.


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