Rebuilding Ireland home loan

Len_007

https://www.boards.ie/discussion/comment/120564650#Comment_120564650

Also interested in this

rob316

Having to take their MPI is a scam, what is the reasoning behind it?

BKWDR

Once you have commenced your loan, as per the loan agreement you signed, it forms part of your monthly and annual payment. The LA wont let you uncouple your LA MPI

The MPI that you get with RIHL or LAHL seems to be on the upper end of product, given that it's a loan product given to people who can't access a mortgage with a pillar bank, there is risks associated with that. Also if you went with a 3rd party MPI provider, you make a payment or two and then decide you don't need it and stop paying it, which is a risk to the governemnt or LA.

ronano

Great info on thread, thanks

shawki

https://www.boards.ie/discussion/comment/120284322#Comment_120284322

How did you got on in the end?

I’m looking at applying to Cork City Council soon.

Dan44

Can anyone confirm if it's 100% necessary to have 2 years continuous employment? I've heard there's possibility of it just being 1 year required despite the website saying 2 years. Can anyone confirm this?

My wife and I swapped homemaking/working so though together we have over 2 years, as the now primary earner she doesn't have 2 years yet. Wondering if we should still go ahead and apply as its the only requirement we lack.

liam301092

Does anyone know if you get approved, do you need to buy a house in the same county where you applied for the loan ?

optogirl

https://www.boards.ie/discussion/comment/120718551#Comment_120718551

yes the loan comes from the local authority so has to be in that jurisdiction

Darkglasses

https://www.boards.ie/discussion/comment/120710470#Comment_120710470

Basically it is yeah, it's in black and white in the credit policy. Now a County Council theoretically can go outside of the policy under it's discretion, but that doesn't mean it will. They'd need a very good reason to disregard a rule in the policy for creditworthiness.

Darkglasses

https://www.boards.ie/discussion/comment/120569859#Comment_120569859

To reduce the administrative burden of running a Mortgage scheme within a small number of non-specialist staff, they tender for an Insurer to provide one MPI policy for all customers. LAHL is effectively sub-prime lending, so the loanbook having rigorous insurance cover is important without necessarily having the manpower to do it.

Rather than maintaining tabs on countless different policies for all of their customers, they have probably 99% of their customers on one policy that requires far less administration (just charging a flat 0.5% or whatever across the board).

It's basically unavoidable

Darkglasses

https://www.boards.ie/discussion/comment/120556428#Comment_120556428

Probably, yes. Whenever the ECB raises their rate there will eventually be a knock on to Local Authority lending.

https://www.rte.ie/news/business/2023/0611/1388417-ecb-interest-rate/

Dan44

https://www.boards.ie/discussion/comment/120720033#Comment_120720033

Thanks for that! Have to wait a bit so!

WoolyJumper

https://www.boards.ie/discussion/comment/120707602#Comment_120707602

Ended up with a mortgage with a traditional bank and I'm currently sale agreed on a house

I applied for a county council, city council and bank mortgage. The county council refused on the basis of my savings not being consistent enough. For the City Council I filled out everything out, emailed it off and by the time they got back to me to tell me I needed to post it in I already got my AIP with bank so I moved forward with them.

My experience is they are very stringent and very slow but that's not to say don't apply. Just keep your options open. If this house falls through I will probably apply through the city council again as I have kept my savings faultless during this whole process and the higher loan amount would be great.

newmember2

https://www.boards.ie/discussion/comment/120164643#Comment_120164643

Yes...RIHL is a local authority loan to buy a house - new or secondhand. The separate 'Help to buy' scheme is exclusively for new builds.

shawki

https://www.boards.ie/discussion/comment/120759556#Comment_120759556

Cheers, yeah I’m looking at backup options just in case it doesn’t come through, hopefully will get it sorted by the end of the summer.

Mightymuc

In case anyone is trying to apply for a Local Authority Home Loan after insolvency, you have to wait 2 years before you can apply. Initially we were told 12 months but now its two years. It doesn't say that anywhere on the website. Fresh Start me hole.

shawki

Rates are increasing from the 28th September 2023.

The fixed interest rates are increasing from:

3.35% to 4.0% (Loan Terms up to 25 yrs).

3.45% to 4.05% (Loan Terms over 25yrs and up to 30yrs). 

Icepick

https://www.boards.ie/discussion/comment/121134520#Comment_121134520

Worse than some banks. How exactly is this scheme supposed to help?

DonnieCorko

1. "Applicants are required to show the loan amount sought as part of the evidence of insufficient offers"

Neither of my BOI or AIB AIP show the amount sought, just the amount they are offering. Anyone come across this with their application?

Also, anyone know what kind of penalty there would be for breaking the fixed rate mortgage in the future if I wanted to upgrade to a better home? Tried talking to the council and the scheme organisers but no one can answer. Just looking for rough cost etc.

Thanks!

_H80_GHT

https://www.boards.ie/discussion/comment/121140636#Comment_121140636

Found this from way back in thread, from 2018.

Thanks, I managed to find it there. For anyone interested its based on the coco's cost of lending:

In the example below, a borrower takes out a 25-year fixed mortgage at a rate of 2.00% on 1st February 2018. On 1st February 2033 (with 10 years remaining), the mortgage outstanding is €90,000 and the borrower opts to break out of the fixed rate. The breakage cost calculation is:

Amount [A] = €90,000

Original local authority cost of funds on 1 February 2018 = 1.50%

Interest rate for local authority cost of funds for remaining term of 10 years on 1 February 2033 [C] = 1.25%

Remaining term in days [T] = 3,652 days

Breakage Calculation = (A x (B-C)) x T divided by 365 = (€90,000 x (1.50% - 1.25%)) x 3,652/365 = €2,251.23

In this case the borrower would be charged a breakage fee of €2,251.23

As an aside, majority of Banks allow some overpayments without penalties on fixed rate mortgages. Good to see that the RI breakage fees are in line with the recently legislated for amounts based on the cost of lending.

_H80_GHT

https://www.boards.ie/discussion/comment/121136403#Comment_121136403

You are able to borrow a significantly higher sum compared to a bank. That's it really.

denker95

Hi all,

Hoping someone can shed some light on a few things.

We've gotten approval from Kildare CoCo, have gone sale agreed on a property and now have to fill in Form 2 with the property details. Form 2 also asks that we send in certificate of compliance with building regulations - how long did it take people to get this certificate? And is it something that our solicitor needs to look after?

Thanks in advance

denker95

https://www.boards.ie/discussion/comment/119681110#Comment_119681110

How did you find dealing with the form 2 and all the requirements for that? I'm just gone sale agreed so working on the form 2 now.

Bookworm23

Got a letter today saying the MPI provider is changing and will result in a reduction in our monthly mortgage repayments starting January 2024. 👌🏻

waterfordgirl

Thats fantastic!

kaycut

Hi,

We have been refused the rebuilding ireland homeloan for unsatisfactory saving record, we bought a car sept 22 which effected our savings as we paid 30k for it from our savings, we pay 1200pm in rent for last 3 years in our current house, and excluding the dip for the car purchase we increased our saving by 3000 euro for the year. We still have a 30k deposit.

Has anyone successfully appeal in a simular situation?

Other problem is I am due to start mat leave in January so has anyone successfully drawn down during mat leave or have a time line for Cork for appeal and draw down time?

What documents do they ask for at draw down stage also.

Unsure if we should just wait to apply again in 12 months but unsure how they view mat leave as my employment contract finishes 1 month before my mat leave so i will then have a gap in employment which I've never had for 12 years.

So sick of mortgage applications we are trying to buy since we were approved pre covid but with wage subsidies and then change in employment its just a never ending battle.

JCN12

https://www.boards.ie/discussion/comment/121262160#Comment_121262160

Have you been saving a set amount every month since Sep 2022 with no variance, and if so, is it enough to more than cover the mortgage payment?

If yes to the above, it may be faster to make a fresh application. 🤔

DonnieCorko

https://www.boards.ie/discussion/comment/121166234#Comment_121166234

Thanks for the reply. I dont really understand it though, not through your fault, but Im very bad with interest rates and maths in general :-(

Perhaps my question below might be easier to answer.

I can see that the money you owe is something like the difference between the interest rate you had when buying, and the interest rate they are paying.

Lets say I got the loan at 4% and the governments cost in terms of interest rate is 3.5%.

I want to get a new mortgage in 5 years and the interest rate is now 2 to the government%.

Will I need to pay that 1.5% difference in the interest rate to break from the fixed mortgage?

Thanks again for the reply and digging out the info.

kaycut

Yes we have thought about applying again but being that the first application took 12 weeks for a decision we don't think we have the time as I will be on maternity leave from January

JCN12

https://www.boards.ie/discussion/comment/121272540#Comment_121272540

Even if the application was reviewed and approved this week, you would still need to resubmit your financial documents to show no change in circumstances (including savings record) prior to drawdown.

However, not sure how the council treats maternity leave. It may be worth calling and enquiring in case of exception being made for this.

If you don't want to call the council office in question, it could be worth calling a different council office to get a better idea of how it is treated, or the general helpline for local authority home loans.