Government Funds Local Authority Housing Scheme

quadrifoglio verde

GingerLily wrote: »

Its a bit worrying alright that some people think this way!

What is worrying about it? I was prudent. I worked extra hours to increase my gross salary. I moved back home. I haven't gone on a trip around the world like my friends. I have saved 75% of my take home pay over the last 6 months. Why? Because I want a home.

And now I notice that if my salary was to reduce slightly, I can borrow more, buy the house I want and pay significantly less interest than I would through the bank.
And it's fixed for 30 years.
You can't get any more prudent than that.

bleary

The worrying thing is that some one in the department and the housing minister thought that this was a good policy to implement

GingerLily

quadrifoglio verde wrote: »

GingerLily wrote: »

Its a bit worrying alright that some people think this way!

What is worrying about it? I was prudent. I worked extra hours to increase my gross salary. I moved back home. I haven't gone on a trip around the world like my friends. I have saved 75% of my take home pay over the last 6 months. Why? Because I want a home.

And now I notice that if my salary was to reduce slightly, I can borrow more, buy the house I want and pay significantly less interest than I would through the bank.
And it's fixed for 30 years.
You can't get any more prudent than that.

You may not be given one of these mortgages - what your doing is gambling.

I think it's a bad idea, but it's your choice.

quadrifoglio verde

GingerLily wrote: »

You may not be given one of these mortgages - what your doing is gambling.

I think it's a bad idea, but it's your choice.

Im betting 5k that I buy a better house, at a lower repayment rate and save 80K plus over the course of the next 30 years....I like them odds

BattleCorp

quadrifoglio verde wrote: »

Im betting 5k that I buy a better house, at a lower repayment rate and save 80K plus over the course of the next 30 years....I like them odds

That house you want to buy has probably gone up €80k since this scheme was announced.

Cuddlesworth

LirW wrote: »

I can only urge people to caefully assess themselves what they can afford to repay even if things turn for the worse.

So they loose their job and stop paying the mortgage. Then what? Pretty sure a decade later we still have the worst mortgage arrears in the world. Court cases take years to happen and only the lowest hanging fruit has even seen the courts. You can live in a house and save thousands on rent with no repercussions.

Having worked with many councils in the past, I would really really doubt that most of them would even bother to take arrears to court.

Lolle06

quadrifoglio verde wrote: »

Instead of working 47 hours a week that I'm currently working to try and get a mortgage as a single earner, I'll just work 38. Much better quality of life, I can buy the house I'd like to buy and pay less interest.

My salary certificate for last year has me just under the magic threshold of 50K. I was on minimum wage until I qualified in June. So in that regards I'm safe.
I've been in continuous employment the past 2 years with the same employer.

As for the cut in salary, after tax, it works out at 5k less a year. However it would only be until the house was purchased, then the current salary would increase back to it's normal rate. The way the job market is at the moment in my field, if my salary wasn't reinstated, I'd easily get it elsewhere. Or I could go working as a contractor which pays significantly more, but which the banks won't lend against as I need three years audited accounts.

Is it abusing the ideas behind the scheme. Of course! However when you create a situation where a small reduction in net monthly take home pay leads to increased borrowing capacity and a lower interest rate, don't expect it to not be abused.

By all means, apply for it! I really hope you will get the CoCo mortgage, as it would be very unfair to ppl not to get this mortgage if they only are slightly over the threshold. But at the same time, the line will have to be drawn somewhere?
I am just worried about prices rising even more altogether.
I still think the CoCo’s should encourage more new builds or renovations instead of throwing money at ppl to buy houses in a very overstretched market!

Lolle06

quadrifoglio verde wrote: »

What is worrying about it? I was prudent. I worked extra hours to increase my gross salary. I moved back home. I haven't gone on a trip around the world like my friends. I have saved 75% of my take home pay over the last 6 months. Why? Because I want a home.

And now I notice that if my salary was to reduce slightly, I can borrow more, buy the house I want and pay significantly less interest than I would through the bank.
And it's fixed for 30 years.
You can't get any more prudent than that.

Can I just say, that the fact that you moved back home in order to save money would not count as much as paying rent AND saving money over the past few years, as a lot of applicants for this scheme will be long-time renters with family, who also live prudent and don’t go on holidays. Just think about it... what chances would you have vs. someone who has a family, is a long- term renter and could be in a position to find himself homeless at some stage in the future through no fault of his own? I think these will be the candidates this scheme is aimed at...?

hmmm

Lolle06 wrote: »

I think these will be the candidates this scheme is aimed at...?

Call me cynical, but I think this is aimed at those candidates who ask their TD to intervene on their behalf and get them one of the coveted golden mortgage tickets. It's clientelism - there's only 200 million available. Politicians want you asking them for help so they can "intervene" on your behalf in return for your vote.

Bargain_Hound

My head literally hurts reading this thread.

lightspeed

I dont know about the rest of you I think ill invest in some shares in paddy power.

Lolle06

hmmm wrote: »

Call me cynical, but I think this is aimed at those candidates who ask their TD to intervene on their behalf and get them one of the coveted golden mortgage tickets. It's clientelism. Politicians want you asking them for help so they can "intervene" on your behalf in return for your vote.

Wow. The TD‘s will have a lot intervention to do in this case... I hope they‘ll have the time to write all those letters!

lightspeed

one of the eligibility rules is as follows:

"be in continuous employment for a minimum of two years, as a primary applicant or be in continuous employment for a minimum of one year, as a secondary applicant"

Would this mean that a single person could not have been unemployed even for a few months in past 2 years?

I was unemployed for about 3 months last year, then did a 6 month contract. unemployed for 2 weeks after that and then started my current job which ive been in over 7 months now.

Im guessing I have a good 18 months left to avail of this. I fear that by then house prices will have rose so much as a result of this scheme it will be scrapped by then.

scouserstation

quadrifoglio verde wrote: »

Hmm, if I were to temporarily reduce my working hours, I'd qualify for the same mortgage as I currently do, with a low interest rate guaranteed for the life of my mortgage.
My salary for last year has me under the limits as I only qualified in June. This year as it stands I'd be 10k over it, but net difference is only around5k....might talk to my boss.

Just popped my reduced salary into a mortgage calculator on rebuilding Ireland. I can borrow 60k more than what I currently can get and have a lower mortgage repayment.

Why not tell your boss you are quitting your Job, go have a kid and you will be given a house for free, no point in doing things by half measure!

quadrifoglio verde

scouserstation wrote: »

Why not tell your boss you are quitting your Job, go have a kid and you will be given a house for free, no point in doing things by half measure!

I'm male.....I'd have to stay around afterwards too.
I also quite enjoy my job. However if I can make my house purchase more affordable, then I don't see why not.

KellyXX

quadrifoglio verde wrote: »

Instead of working 47 hours a week that I'm currently working to try and get a mortgage as a single earner, I'll just work 38. Much better quality of life, I can buy the house I'd like to buy and pay less interest.

My salary certificate for last year has me just under the magic threshold of 50K. I was on minimum wage until I qualified in June. So in that regards I'm safe.
I've been in continuous employment the past 2 years with the same employer.

As for the cut in salary, after tax, it works out at 5k less a year. However it would only be until the house was purchased, then the current salary would increase back to it's normal rate. The way the job market is at the moment in my field, if my salary wasn't reinstated, I'd easily get it elsewhere. Or I could go working as a contractor which pays significantly more, but which the banks won't lend against as I need three years audited accounts.

Is it abusing the ideas behind the scheme. Of course! However when you create a situation where a small reduction in net monthly take home pay leads to increased borrowing capacity and a lower interest rate, don't expect it to not be abused.

I just found out a very easy way of doing this.
If you have kids then yourself or your partner take enough parental leave to get you under the threshold. I'm thinking of doing this. I was thinking it would be nice to just quit. This way I wouldn't have to even quit and get my time off.
If you do take parental leave, 18 weeks each I think if you wanted that much, go and enjoy the time off . What a lovely little bonus for the tax payer eh. About time we got something back.

Edit. Just speaking to a colleague this morning. We aren't the only ones with this idea

KellyXX

quadrifoglio verde wrote: »

What is worrying about it? I was prudent. I worked extra hours to increase my gross salary. I moved back home. I haven't gone on a trip around the world like my friends. I have saved 75% of my take home pay over the last 6 months. Why? Because I want a home.

And now I notice that if my salary was to reduce slightly, I can borrow more, buy the house I want and pay significantly less interest than I would through the bank.
And it's fixed for 30 years.
You can't get any more prudent than that.

Don't feel in the least guilty. You paid more tax dollars towards the housing crisis than most. About time you benefitted from them is the way I see it.

LirW

Are you living in Dublin, Kelly? Because if you're trying to buy in Dublin for a family, 320 isn't getting you much there in most areas. While it definitely would work out for other counties, it'll put a lot of pressure on the market in and around the biggest cities in Ireland.
Perfect though for people living for example in Sligo.
Also if you consider quitting and going through with it yet it would happen that the council application would take 18 months or more to complete or would disqualify you for whatever reason, what would you do then?

Genuinely interested.

dzwx

Government is trying to fix housing problem by throwing money on people to buy non existent houses. Supply is the problem.
Out of curiosity, does 3.5 lti rule still apply on this, just checked that linked calculator and surprisingly I'm initiated to borrow 288k which can't be true according to cb rules.

KellyXX

LirW wrote: »

Are you living in Dublin, Kelly? Because if you're trying to buy in Dublin for a family, 320 isn't getting you much there in most areas. While it definitely would work out for other counties, it'll put a lot of pressure on the market in and around the biggest cities in Ireland.
Perfect though for people living for example in Sligo.
Also if you consider quitting and going through with it yet it would happen that the council application would take 18 months or more to complete or would disqualify you for whatever reason, what would you do then?

Genuinely interested.

I was considering quitting but I had a better idea.
Paternity leave for both of us could be spread out over a few years to get the figures right if we needed.
I was thinking of buying a place that needed work or could be extended and then using cash to bring it up after the date.
It's only a plan hatched in the last 24 hours and it has changed many times in that time but we could make it work if it was going to benefit us significantly.

There are lots of people already with the idea of trying to make something like this work for them.
We probably won't because the length of time involved might not suit and we already have other options. But others will do things like I described.

To us it's taking advantage of the interest rate and the value of that over time that's attractive. Working in finance I'm always turning the cogs on any financial loophole i spot. I think I'm autistic like that tbh.

GingerLily

It's terrifying that people are even thinking of quitting their jobs to qualify.

KellyXX

GingerLily wrote: »

It's terrifying that people are even thinking of quitting their jobs to qualify.

Why would other people quitting their jobs terrify you?

Plenty of people quit their jobs to have a break.
Myself and other half quit both our jobs about 5 or so years ago to go travelling. Now I just feel like a break from work to do things I like doing.
If you are in an industry where it's easy enough to get a job when you feel like working again it's a nice option.

Sure that's basically what parental leave is. 5 months off work with the option to return afterwards if you want to.

GingerLily

KellyXX wrote: »

Why would other people quitting their jobs terrify you?

Plenty of people quit their jobs to have a break.
Myself and other half quit both our jobs about 5 or so years ago to go travelling. Now I just feel like a break from work to do things I like doing.
If you are in an industry where it's easy enough to get a job when you feel like working again it's a nice option.

Sure that's basically what parental leave is. 5 months off work with the option to return afterwards if you want to.

Tell you what - keep us updated on your progress, I'm sure it'll be entertaining to follow.

And at least I can say you were warned

smurgen

I think people would be mad to buy in ireland now.i can't see myself buying for at least 5 years now.

GingerLily

smurgen wrote: »

I think people would be mad to buy in ireland now.i can't see myself buying for at least 5 years now.

I've been evicted twice in 24 months and have never missed a tent payment, my mortgage for a 3 bed house will cost 100e more then my rent for a one bed, buying is our only option because renting is a horrible existence, particularly evictions.

I understand if you can wait you would be better off waiting, but it's not a luxury for everyone.

KellyXX

GingerLily wrote: »

Tell you what - keep us updated on your progress, I'm sure it'll be entertaining to follow.

And at least I can say you were warned

As I said. I probably won't be doing it, but it doesn't stop me trying to figure out how to do it. Call it a hobby. And I'm pretty sure lots of people it will suit to manipulate their income to take advantage. If you think people don't do that all the time I'm afraid you need to wake up and smell the coffee.

I work for a multinational that does nothing but find loopholes for clients.

quadrifoglio verde

GingerLily wrote: »

It's terrifying that people are even thinking of quitting their jobs to qualify.

You know what I think is terrifying.
The government have decided to offer mortgages at greater lti ratios than central bank rules, to people who can't borrow from a conventional bank and charge them lower interest for it.
That to me is terrifying.
However I'm at a stage in my life where I want to buy. I don't want to rent and I certainly don't want to live at home. I want to own my own place. And the idea of paying 1064 a month for the next 30 years to own my own house is quite appealing to me

smurgen

GingerLily wrote: »

I've been evicted twice in 24 months and have never missed a tent payment, my mortgage for a 3 bed house will cost 100e more then my rent for a one bed, buying is our only option because renting is a horrible existence, particularly evictions.

I understand if you can wait you would be better off waiting, but it's not a luxury for everyone.

I'm thinking of emigrating and maybe coming back when things are more sustainable.i just see the current situation as crazy.stay here and get ripped off by private landlords or stay here and get ripped off by banks.

If I'm honest I'm only saving while waiting for the next crash.

Unfortunately there are so many happy to jump on the boom that there are too many votes in pumping it on the way up and not letting people live with the consequences on the way down.

Only way to win is to get in at the right time and hopefully get out at the right time when retirement comes.

Repeating the mantra again:

Ireland will never be free of this mania until they face up to the fact that you cannot define something as a basic right while flogging it as a national financial panacea out of the other megaphone.

The link between housing and investment has to be shattered. Housing should be a bad investment, a cost sinkhole!

Unfortunately, the vast majority still see owning a home as a must (because renting sucks and because nobody plans for old age aside from owning a property asset) so the govt that breaks this link will go down in flames.

That's leaving aside the fact that our banking system is still horrifically dependent on property.

I think I've just talked myself into leaving (fifth time this week)