Rebuilding Ireland home loan

DonnieCorko

I have read about the requirement for having savings for 12 months before applying for RIHL. However, I am wondering does this need to be consecutive. IE I have 8-10 months savings, then a gap of lets say 6-8 months, and another 6-8 months period of savings again? I am guessing this would not count.

Separately, would they take rental payments in lieu of consistent savings? My rent is about the cost of the mortgage and I also have about 15% deposit through savings and cashed out investments.

Thanks!!!

waterfordgirl

Rent does count towards repayment capacity.

Regarding the savings i'm not entirely sure.

IMO theres no harm in applying.

89char9

Hi, I applied last year and was declined only for insufficient savings/source of equity. I was paying rent more than the mortgage was but had not saved for 12 months. I called and the council said the rent only applied to capacity to repay. They said I needed to have 30% of the deposit saved myself through regular savings. They are very strict about this. I went back and saved for 12 months with approx the same amount each month and reapplied. In your case, if you have saved and not touched the savings, and if you have the 30% saved up, it would be worth calling the council to ask if that would be okay. Unfortunately, your rent will not count as savings.

Iriah251

Hi have u heard back from the council yet? We applied to sdcc on the 12th March and wer still in the queue for the credit committee since 7th April

89char9

I've been waiting for Galway CoCo for 4 weeks. I handed in my app beginning of March, came back approved by hosuing agency on May 3rd and have been waiting for credit Committee since then. I don't think they will ever meet 😞

Seannew1

Could anyone tell me the step to step process of this home loan scheme? Seems to be a lengthy process.

Also, on what grounds can your application be rejected? Surely, if you don't meet the criteria, you'll be told immediately.

Bobby42

Don’t know the whole step by step process but I can imagine if you don’t meet the criteria you’ll be told straight away.

DCC replied within a few days to my application with some queries on my current account and asked for additional documents. Once I had all these it it was sent to the underwriters.

They will reject your application if they underwriters don’t recommend approval. This can be because you don’t a good enough savings records or there’s something on your credit report, the same reasons why a standard mortgage application wouldn’t get approved.

Bobby42

So my application is with DCC 3 months now. Came back approved from the underwriters a month ago but the credit committee only met last week.

Finance member of the committee refused to sign off on the interest rates as they are changing. So they have wait for the Housing Agency to send them a new mortgage calculation process.

So I’ll be waiting for this to be sorted and then for the credit committee to meet again.

Very frustrating.

Sad Professor

Is the 12 month savings record a new requirement? I always thought it was 6 months, or at least that's what banks look for. I have certainly been saving for 12 months but have only been doing it consecutively and on the same date etc for about 8 months. It was more irregular before then and i had a gap of a couple of months. Is it worth applying now or should I wait?

Bobby42

They ask for 12 months bank statements but they don’t specify that you need 12 months of savings.

it’s still worth applying for and see what they come back with. I only have experience with DCC but my application is going into its forth month so you may as well apply now.

89char9

https://www.boards.ie/discussion/comment/119182634#Comment_119182634

Hi, I did not know the interest rates are changing? Did they give you any more details? That does not seem right after you are waiting so long. I feel so bad for you.

Bobby42

Yeah they sent me this:

“the new interest rates valid for any drawdowns after 1st of July 2022 are as follows

2.845% fixed up to 25 years

2.945% fixed for between 26-30 years”.

Two apartments below my budget came up last weekend so this delay is very frustrating.

Interest rates increase with my broker took one email to sort so DCC taking weeks is nonsense.

RoscommonHero

If someone is successful in purchasing a house under this scheme and then subsequently has difficulties paying off the mortgage then do you think a local council would be more flexible in terms of coming to an agreement with the mortgage holder than a bank?

Essentially what I am asking is this - do you agree that a possible benefit of this scheme is that future risk of losing the tenancy associated with non-payment is likely to be less with a local council than a bank?

89char9

https://www.boards.ie/discussion/comment/119225750#Comment_119225750

No. From looking at contracts etc, the exact same rules apply. They are very clear that you will lose your home if you fail to make repayments.

RoscommonHero

https://www.boards.ie/discussion/comment/119225813#Comment_119225813

Of course, nobody can expect to stay in a house indefinitely if they don't pay. I am asking if a local council will be easier to deal with than a bank. I would imagine they don't operate in exactly the same way.

89char9

https://www.boards.ie/discussion/comment/119225901#Comment_119225901

I haven't heard of anyone losing their house who got it through the council. However, I actually only know one person who bought a house using this scheme. I don't think they would be more lenient than the banks would be. In fact, judging by the application and approval process they would probably be quite strict.

RoscommonHero

It's an interesting one. I imagine the idea of the state booting someone out of their home in the middle of a housing crisis would not play well if the mortgage holder threatened to kick up any kind of fuss. I suspect that local councils although bureaucratic by nature would be more likely to assist the mortgage holder in finding a resolution than a bank. That being said, even banks find it hard to kick people out of their homes when in arrears in Ireland so it's maybe a moot point.

akelly02

Hi Guys

Has anyone got approved here with previous credit issues?

Is it any harder/ easier than the banks ?

callaway92

Is the maximum property value on these schemes not quite restrictive? €250,000 for a house in Clare seems a little rough, especially if in-and-around the Ennis area

Jafin

https://www.boards.ie/discussion/comment/119230256#Comment_119230256

A few years ago it wasn't so bad, but prices have shot up so much in the past two years that it should definitely be reviewed I think. I was looking to buy an apartment in Ennis a few months after the pandemic started. I found one I liked that was listed at €130,000 and eventually sold (not to me) for €146,000. Another one in the same complex/area went up for sale at the end of last year and I've heard it was sold for €170,000. I can't confirm that as I can't find it on the property price register, but if true it's madness.

callaway92

Ah ya fair enough actually if it was the same total from a few years ago - At least then you could've gotten something modest enough for that money, but now you'd be pushing it a little in some areas

Not sure either if the total is moreso based off the combined earnings etc. (it's still at €75,000 total for a duo)

89char9

Does anyone know how long it takes for the council to get back to you once you submit engineers report and surveyor report? Also what other docs will they ask for? Thanks

adampeter

Anyone have the experience of being asked for an extra document after application has come back from housing agency but in advance of credit committee meeting?

Council say they can't share the decision of the housing agency yet but I wondered would they bother asking for additional documentation if it was a no?

rob316

https://www.boards.ie/discussion/comment/119228384#Comment_119228384

I presume the council would buy your home and rent it back to you as a social housing tenant. There is a mortgage to rent scheme available

DonnieCorko

I am wondering is there a minimum amount they want you to save? I have been saving 500 a month for the past 6 or so months. My net income is 3000. I pay about 900 on rent (varies as I share with gf and her work is irregular). I will have around 20% of the total house cost myself in savings and investment income but I know they are sticklers for the 12 months savings. Is 500 (15% of net income) enough?

Thanks

DonnieCorko

https://www.boards.ie/discussion/comment/119129618#Comment_119129618

30% of the deposit saved? That's the first I heard of that requirement. Did you have special circumstances?

89char9

No, it looks like it is standard. I checked the website and it's the same under the LAHL rules.

"The maximum loan amount under the Local Authority Home Loan is limited to 90% of the purchase price/market value of the property or, in the case of self-build properties, up to 90% of the total build costs. This means you must raise 10% from your own resources.

A minimum of 30% of this deposit amount must come from consistent and regular savings."

So say you're gifted most of the deposit etc - it won't be ok. You have to save 30% of the deposit yourself (which is hard when you're already renting and paying all the bills!)

I was told the council want to see 12 months consistent savings towards the deposit (and try to save without touching the savings). It's really, really strict compared to banks. But the bank isn't an option to me due to having dependents so at least I have the RIHL option. Otherwise I'd probably end up homeless (due to cost and lack of rentals).

akelly02

https://www.boards.ie/discussion/comment/119247809#Comment_119247809

Its 30% of the 10% deposit you have to save yourself. so if you need a 20grand deposit , then you need €6000 to come from your own savings.

Bobby42

Finally got approval from DCC today, delighted.

akelly02

https://www.boards.ie/discussion/comment/119187156#Comment_119187156

im saving consecutively for the 12 but not a great amount.

for example for 5 months ive been saving €800 and the next 7 months will be €1200.

Will they take that as consistent saving for the year?