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Rebuilding Ireland local authority home loan with bad credit

  • 12-02-2023 7:32pm
    #1
    Registered Users Posts: 2,953 ✭✭✭


    I'm trying to get on the property ladder but I have bad credit due to a failed business pre pandemic. I am only really getting on my feet now last few months and have a decent wage now but still have a bunch of the old loans which I am back paying under new agreements. I took them out as personal loans as it was just a small startup.

    I'm no spring chicken, in my early 40's with two young kids and had previously resigned myself to the fact I wouldn't own a house as it will take 5 years to clear the bad debt by which time I will be getting close to 50 and I wasn't eligible for the local authority loan due to being over the threshold for earnings. https://localauthorityhomeloan.ie/

    But as of March 1st they are going to increase the amount you can earn and I will be eligible again but due for a raise in a few months so I will go over the threshold again so I have a small window of maybe 4-6 months. I had an initial chat with them a year ago and they said they can't say for sure but if I was starting to get my accounts in order and keeping bills and loans paid, it might be possible now I have a steady income.

    This came out of nowhere so I have nothing saved, so hoping I can pair this with the help to buy scheme as my paye should easily cover it since I won't have enough time to put together a deposit since my window is likely only a few months. I have a couple of questions I hope people that previously applying might know.

    1 - Can this be paired with help to buy since I don't have the deposit?

    2 - I know the help to buy needs to be a new build, I was thinking about buying one of those large cabins, do they count as a new build?

    3 - Has people had any luck with bad credit and only a couple of months of good accounts behind them, feel free to pm if you don't want to answer publicly on that one?

    4 - How do they evaluate your gross earnings. Is it based on last year, last 12 months or your expected salary for the upcoming year and if its expected salary do they also take into account bonuses etc, If they do I would go over by about 1,500 as I am close to the threshold.

    Cheers



Comments

  • Registered Users Posts: 2 Dianneos


    Hi I'm in similar situation but I'm going to be homeless in six months. The only option I have the LAHL, I was on the council list for a couple of years but taken of it a few months ago. I'm a single applicant it's just me and my son. I have enough money saved for the deposit. But I also have bad credit from years ago, will they decline my application because of this? I could pay it off but I don't have five years to wait. Any advice much appreciated?



  • Registered Users Posts: 28 Iriah251


    It depends on the council they all have different rules, we were approved by dccc but the one we wanted was sdcc which declined us the excuse was we asked for to much , even though we asked for 50k less than what their mortgage calculator said , our appeal went in 7 months ago , we don't have any loans and they can see we pay our rent on time and we got our letting agents to write a glowing reference but doesn't mean a thing ... but sdcc are the worst council for refusing applications



  • Registered Users Posts: 650 ✭✭✭shawki


    Declined you completely without offering a lower amount?

    Thats brutal.



  • Registered Users Posts: 28 Iriah251


    Yes ... dccc lowered our amount and approved us but not sdcc we put our appeal in in sep and got our AIP yesterday, wer very happy but they could of lowered it in the first place plus sdcc are horrible to deal with, dccc are lovely



  • Registered Users Posts: 2,170 ✭✭✭BKWDR


    1. Yes it can be paired with HTB. Plug into your details to the Revenue website and see how much you will get back. The max is 30 but you might be a good bit off that, based upon 4 years tax and DIRT. It goes towards your 10% deposit but any shortfall will be made up by you.
    2. Be careful on this one. Each LA will have a defintion on what is a marketable asset that will hold its value over the duration of a loan (25/30 years) and a prefab cabin won't fall into this category. You have to remember, if a borrower falls off and the lender has to seize the property, they have to sell the property to recoup and if its a cabin, there is a low market chance of a second hand cabin recouping a loan.
    3. Download you CCR report and see what it says about you. This is what their underwriter will look at. You could try get in front of it with an explanation note or just roll the dice. But in all liklihood, any bank or lender will look at your CCR and if you have defaulted, they will make a judgement call on it and they just look at the risk potential and it can be black and white. Best thing to do is put in an application and see really.
    4. Gross earnings is your salary. So if you were to get a salary cert from your employer, what would it say you earn per year? There's a part on the salary cert where you can include bonus or allowances etc


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