Government Funds Local Authority Housing Scheme

Pelvis

The government will be providing 200m to local authorities this year to provide low interest mortgages (2%-2.25% over 25-30 years) for people who have been denied by the banks (at least twice). Sole applicants must earn no more than 50k, with couples earning no more than 75k. If buying in Dublin, Cork or Galway then you could borrow up to €320k.

https://www.irishtimes.com/news/politics/government-to-fund-local-authority-mortgage-scheme-1.3363411

I don't really understand this. If you're a couple and two banks has deemed you're not eligible to get a mortgage, then you can go to your local authority and get a potentially larger mortgage for a lower interest rate. While someone else in similar circumstances but who may have been more prudent financially, is rewarded with a lower mortgage by the bank at a higher interest.

Am I missing something?

johnnyskeleton

Sounds the same as the old home choice loan scheme that was set up and afaik is still going. Apparently they issued less than a dozen mortgages.

thelibertyboy

yeah i was wondering this to i called dcc they had an eligibily list and that does sound so wierd oh your not financially viable and a danger but we will give you money but not someone with a good record hmmmmm

JDD

Assuming they can be discerning about who they approve for these mortgages, I imagine they're not going to lend to people who have terrible credit ratings, but might lend to those who are prudent financially but have fixed outgoings such as childcare which means they don't meet the banks disposable income requirements. Or one applicant might have health issues which prevents them from obtaining life assurance, thus stopping them from getting a mortgage.

This seems a bit like the affordable housing scheme that was around a while back. A friend of mine was earning €35k and applied for that scheme, helping her buy an apartment that she could never have gotten approval to buy otherwise. I think the apartment was €280k, a two bed, and she got a mortgage for €140k and the council paid for the other half. Ten years later he has rented out the second bedroom, never missed a mortgage payment and has paid off a chunk (or perhaps all? I'm not sure) of the council's investment in the house.

Having said all of that, I think they'd be better off trying to fix the supply issue with the €200 million they're spending on this rather than increasing the amount of people in the market for houses. I suppose it might take some people out of the rental system, which may have a trickle on effect of reducing the attractiveness of property to cash buyers, but a scheme this small isn't going to make much of a dent in that.

Eric Cartman

every 3 bed semi within 1 hour of the m50 just became 320k

Browney7

Eric Cartman wrote: »

every 3 bed semi within 1 hour of the m50 just became 320k

Every 2 bed apartment more like

Giuseppe90

That's for sure - more potential buyers for the same inadequate supply .....

hmmm

FFS. This does nothing for supply, just drives up prices.

Put the 200 million into building new houses, not property owners pockets.

Fanny Wank

Good ****ing god......

The 9 most terrifying words in the English language: I'm from the government and I'm here to help

Bargain_Hound

I'm just above the threshold(s) and currently in the bidding process for a house in Dublin which is looking competitive and unlikely to succeed. This has me really worried what may lay ahead at this low price entry point into the market.

LookingFor

Bargain_Hound wrote: »

I'm just above the threshold(s) and currently in the bidding process for a house in Dublin which is looking competitive and unlikely to succeed. This has me really worried what may lay ahead at this low price entry point into the market.

Ditto. I had an idea of what I was targeting, years of saving leading up to what I hoped would be a purchase later this year.

Now I'm a lot less sure I'll be able to afford what I hoped I could, if the market 'welcomes' hundreds of people with bigger mortgages that I can access, into this range of the market (200-300k).

How stupdendously unfair, right?

miezekatze

I don't get this either. None of the current rules seem to apply either - someone with an income of 40k potentially getting a mortgage of 200k?! The interest rates are much better than what you'd currently get from a bank too, and fixed for the duration of the loan. It seems really unfair. Imo if someone is getting rejected by multiple banks for a mortgage then there's usually a good reason for that, and that's not the council's problem to sort out.

Carlos Orange

LookingFor wrote: »

How stupdendously unfair, right?

Things like this usually are seen as unfair since they benefit some people at the expense of others.

LookingFor

It's just...nuts.

If you're in the 50-100K bracket, and you've been working toward a first house, saving and scraping...little did you know you were also working so that, via your tax euros, someone earning less than you can potentially now come in now and outbid you on a property.

Back to square one for a lot of people.

Nonsense

GLaDOS

Myself and my girlfriend are a little above the joint threshold.

Sometimes I wonder why we bother working.

Pelvis

There's a website for this.

http://rebuildingirelandhomeloan.ie/

Using the calculator provided. A single applicant earning 50k gross with zero monthly commitments living in Dublin on a 25 year fixed rate of 2% can get an "Indicative Maximum Loan Amount" of €251,167, with repayments being €1,064.

WTF??? Five times their salary?? That can't be right? A bank will only give 175k ffs.

cruizer101

I'm due a rise which would take me above a bit above the limit, nearly having to consider should I try negotiate a lower rise, the mind boggles at the idea this government comes up with.

€200 Million, why not just build houses with it for feck sake

LookingFor

Pelvis wrote: »

There's a website for this.

http://rebuildingirelandhomeloan.ie/

Using the calculator provided. A single applicant earning 50k gross with zero monthly commitments living in Dublin on a 25 year fixed rate of 2% can get an "Indicative Maximum Loan Amount" of €251,167, with repayments being €1,064.

WTF??? Five times their salary?? That can't be right? A bank will only give 175k ffs.

On a 30 year they can get €278.5K.

It is completely perverse. Someone just above the threshold on 60K is limited to 210K in a mortgage, and will be competing with this now on the market.

Varik

The LTI limits still apply, just seen mention of the 10% deposit.

markodaly

A bit bizarre. The issue is not that people cannot get mortgages, is that there are too few properties out there to buy. This fixes a problem that does not exist and will just push up the low end of the market. Also curious of the details of this as it seems the government is not competing with banks for mortgages? Did they get the go ahead from Europe on this as it seems to circumvent banking lending rules.

ted1

Pelvis wrote: »

The government will be providing 200m to local authorities this year to provide low interest mortgages (2%-2.25% over 25-30 years) for people who have been denied by the banks (at least twice). Sole applicants must earn no more than 50k, with couples earning no more than 75k. If buying in Dublin, Cork or Galway then you could borrow up to €320k.

https://www.irishtimes.com/news/politics/government-to-fund-local-authority-mortgage-scheme-1.3363411

I don't really understand this. If you're a couple and two banks has deemed you're not eligible to get a mortgage, then you can go to your local authority and get a potentially larger mortgage for a lower interest rate. While someone else in similar circumstances but who may have been more prudent financially, is rewarded with a lower mortgage by the bank at a higher interest.

Am I missing something?

Banks will stress test repayments at much higher interest rates , however these are fixed at 2.25% so will pass a stress test

LookingFor

Varik wrote: »

The LTI limits still apply, just seen mention of the 10% deposit.

Not according to their calculator. Pop in 50K and a 30 year term and you get value of 5.6 times gross. A deposit rule of 10% applies*, but Loan to Income Value limits seem out the window for this.

*That rule typically turns into 20% on the private market for single beds, and even some two beds, in Dublin for a first time buyer. If it remains at 10% under this scheme, it's another boost for buyers under this scheme vs those in the open market.

Colonel Claptrap

Well that's one way to buy an election.

Let's see if I have this right. Rather than save for a deposit wisely, curb my spending habits, pay down my loans and cut up my credit card I'm now being encouraged to abuse my overdraft facility, take on an extra dependent (get my GF knocked up), stop working hard (in case I get a pay rise) and wait for the state to hand me a dirt cheap mortgage with a rock bottom rate locked in for 25 years?

I'm literally being encouraged to "game the system".

ted1

Colonel Claptrap wrote: »

Well that's one way to buy an election.

Let's see if I have this right. Rather than save for a deposit wisely, curb my spending habits, pay down my loans and cut up my credit card I'm now being encouraged to abuse my overdraft facility, take on an extra dependent (get my GF knocked up), stop working hard (in case I get a pay rise) and wait for the state to hand me a dirt cheap mortgage with a rock bottom rate locked in for 25 years?

I'm literally being encouraged to "game the system".

By other Euro zone countries It’s not a rock bottom rate , it’s the rate that all banks especially state owned ones should be offering

McGrath5

Flooding the market with cheap credit, a fantastic idea that has never been tried before.....oh wait :rolleyes:

irish_major

What would happen here if your original application was rejected because of an average ICB report?

Fanny Wank

ted1 wrote: »

By other Euro zone countries It’s not a rock bottom rate , it’s the rate that all banks especially state owned ones should be offering

You can actually repossess in other countries though

Wabbit Ears

Seriously though... we have low supply so the soloution is to increase demand?

Conspiricy theory time... The powers that be are purposefully orchestrating another crash. I can think of no other reason why anyone would have thought this is a good idea if you werent setting something up for a fall.

Colonel Claptrap

ted1 wrote: »

By other Euro zone countries It’s not a rock bottom rate , it’s the rate that all banks especially state owned ones should be offering

25-30 years fixed?

ted1

Colonel Claptrap wrote: »

ted1 wrote: »

By other Euro zone countries It’s not a rock bottom rate , it’s the rate that all banks especially state owned ones should be offering

25-30 years fixed?

Yes. 1.9% for 20 years. In Spain
We are being screwed here.

http://fuster-associates.com/top-five-fixed-rate-spanish-mortgages/

1.85 for 20 years in France.
https://www.aplaceinthesun.com/articles/2017/01/historically-low-rates-for-french-mortgages

BattleCorp

ted1 wrote: »

Yes. 1.9% for 20 years. In Spain
We are being screwed here.

http://fuster-associates.com/top-five-fixed-rate-spanish-mortgages/

1.85 for 20 years in France.
https://www.aplaceinthesun.com/articles/2017/01/historically-low-rates-for-french-mortgages

And I thought I got a good deal two weeks ago when I fixed my mortgage at 3% for five years.

Jjjjjjjbarry

http://www.thejournal.ie/mortgages-first-time-buyers-3810311-Jan2018/

I presume most have heard of this news? Don't see a thread on it.

Looks like a good offer?

BUT: I see this part in the linked article:
"To qualify for the scheme, would-be buyers need to have had knock-backs or offers of insufficient funding from two different lenders."

So a person who has tried to borrow more than they were capable of repaying and got refused twice for a mortgage can avail of this but a person on the same salary who has been saving and not tried to buy a house they can't really afford cannot avail of this offer?

Am I reading this correctly?

Jesus the more I think of this the more galling it is.

Only Labour left to vote for now lads.

This is going to get FG crucified imo it's an appallingly stupid and counterproductive move and a real kick in the teeth to anyone above these arbitrary limits who is paying current crazy rents without any assistance and trying to somehow scrape the money together to submit themselves through the cruel and unusual mortgage application process.

All for what, Tom Dick or Harry to cruise in and bang the bid up far beyond what we could hope to get backed by an inflationary scheme funded by the fúcking fat taxes we're still paying courtesy of the last fúcking shower to ride the arße out of an uncontrolled housing boom.

Might well be calling a govt TD over this, which is pathetic but Jesus I'm furious.

Jurgen Klopp

I'm not sure how they are claiming it as new, co councils have been offering mortgages for years once you get two rejections form banks or building society's

van_beano

Active thread

https://www.boards.ie/vbulletin/showthread.php?t=2057832850

hmmm

We need a taxpayers party. Those of us paying high rate tax are having our money taken from us, and given to other people so they can outbid us on housing. Why would you bother.

zl1whqvjs75cdy

Think we can now safely assume anything even remotely livable within 30 miles of Dublin will be at least 320 k.

I actually can’t believe this bull****e

headtheball14

Express your appreciation for this genius move , guys
eoghan.murphy@oir.ie

Sleeper12

Pelvis wrote:

I don't really understand this. If you're a couple and two banks has deemed you're not eligible to get a mortgage, then you can go to your local authority and get a potentially larger mortgage for a lower interest rate. While someone else in similar circumstances but who may have been more prudent financially, is rewarded with a lower mortgage by the bank at a higher interest.

There's nothing prudent about it. The scheme is for people on minimum wage that would never get a mortgage.

It's really only going to help people building their own home imo. Bringing more buyers into the market without increasing the housing stock isn't going to do anything but help push lower end prices higher.

Could be a great scheme if we had housing stock

TallGlass

I'm confused a friend was in touch with DCC recently and they said the limit they will give is 200k to a single person.

GingerLily

TallGlass wrote: »

I'm confused a friend was in touch with DCC recently and they said the limit they will give is 200k to a single person.

This was only announced today

sjb25

GingerLily wrote: »

This was only announced today

There always has been a co council mortgage scheme run along similar lines I think I’d only started looking at it all lately maybe confusion is being caused

I’m assuming these mortgages will also remain available
My local one can be found here https://www.wexfordcoco.ie/housing/mortgages/house-purchase-mortgage/single-applicant

Fanny Wank

ted1 wrote: »

We are being screwed here.

On the contrary, we get excellent rates for unsecured lending

Paying your mortgage in Ireland is pretty much optional. Not only that if the bank tries to actually enforce security you'll have a queue of politicians showing up in court to support the people being turfed out of "da family home"

appledrop

This is absolute madness. The most any couple is allowed earn is €75,000 + yet you can get up to €320,000. You also have to be refused by two banks. WTF? There is a reason people get refused mortgages + only part of it is due to their income not being high enough. Far more common reasons for people being refused is that they are not able to save a deposit + have large loans for cars etc. But while the rest of use try + be frugal they will be laughing all the way to the bank with their low interest rates. The maths just doesn't add up. Or if they do give it to people like this it won't be long before they default on mortgages + we will have to bail them out.

Browney7

[Deleted User] wrote: »

Jesus the more I think of this the more galling it is.

Only Labour left to vote for now lads.

This is going to get FG crucified imo it's an appallingly stupid and counterproductive move and a real kick in the teeth to anyone above these arbitrary limits who is paying current crazy rents without any assistance and trying to somehow scrape the money together to submit themselves through the cruel and unusual mortgage application process.

All for what, Tom Dick or Harry to cruise in and bang the bid up far beyond what we could hope to get backed by an inflationary scheme funded by the fúcking fat taxes we're still paying courtesy of the last fúcking shower to ride the arße out of an uncontrolled housing boom.

Might well be calling a govt TD over this, which is pathetic but Jesus I'm furious.

But rising property prices are great for the negative equity generation (who are fast approaching the exit door), people who bought in the last few years, people who bought investment properties/people with wealth tied up in property. They will get to say on doorsteps to people "look we are doing something and it's been good for your house price". Damned for actually trying to build a sustainable economy - we prefer to tie up wealth in the bricks and mortar around us and let the chips fall where they may

Carlos Orange

appledrop wrote: »

This is absolute madness. The most any couple is allowed earn is €75,000 + yet you can get up to €320,000.

I think they will only give you up to 288K. The house can cost up to 320K. Granted that is still more than 3.5 times your max income.

hmmm

psinno wrote: »

Granted that is still more than 3.5 times your max income.

They justify that by offering ultra low rates. To subprime lenders who have been turned away by the banks. Using taxpayers money.

It's mental. Just throwing taxpayers money away considering the default rates on the existing council loans.

I qualify for this, we're earning 67k but I'm skeptical of this... Would have been glad to buy what I can afford. There was plenty of options in the greater Dublin area as well.

Now everything will probably just go up.

chrismon

So everyone is trying to figure out how to get refused for a mortgage.