Building Societies/Mortgages

Beruthiel

I'm looking for advice....

I have one of those Co. Co. shared ownership schemes (I wanted to buy an appartment at the time and this was the only way I could afford it) - as you may know it opperates as follows -
I have half the mortgage and the Co. Co. has the other half which I rent from them - of course after 25 years I will still have to buy their half out.

I am in a position now where I can buy them out if I get a building society loan, which is preferable as the rent is dead money. The question is: which Building Society should I go with, are they all the same or are some better than others, interest wise, etc..
any thoughts?
Thanks!

The Sweeper

www.solmon.com


Useful for checking comparative rates. You have to register first but they don't spam you and their info is up to date.

Beruthiel

cheers Minesajackdaniels! It looks dead helpful, am gonna give it a go now, thanks again!

The Sweeper

'welcome. Just call me a mine of useless information.

Victor

Pick up any Friday's Irish Times or the Sunday Business Post and they will have comparisons.

I get the impression that all lenders are becoming more wary these days.

Remember you also get to write off a limited amount of the interest against tax.

Remember to get soemthing that suits your particular circumstances - look at all factors - not just APR, cost per thousand, star ratings, but also look at being able to take payment holidays, insurance requirements, set up costs and the like.

Coyote

EBS are the best if your looking for cheep rates.
most of the time there rates are from .5 to .25 cheeper that the banks.

Victor

Beruthiel, make sure you consider the full implications of the move - many council arrangments have a claw-back clause for up to 10 years. This may affect your ability to borrow or move in the future.

I understand most lenders will now go to 92% loans and 3.25 times primary earnings.

Watch out for penalities if you are cancelling your old mortgage.

Also make sure you get independant property advice as to whether the price you need to pay is sustainable (find out what local houses are now being sold for, inside and outside council schemes) and that the property is structurally / generally sound (surveyor / architect / engineer). The lender will insist on their own checks, but do your own if you can.

Beruthiel

many council arrangments have a claw-back clause for up to 10 years.

excuse my ignorance Victor, what does that mean exactly?

thanks again for the advise lads, it's very helpful

Victor

Originally posted by Beruthiel
many council arrangments have a claw-back clause for up to 10 years. excuse my ignorance Victor, what does that mean exactly? thanks again for the advise lads, it's very helpful

It means that if you sell on the house within a specified period (usually 10 years), the council benefits from part of the sale price on a declining scale. You will need to check the particular scheme you used. This may be part of the title deeds of the house.

I am reasonably confident that you will be able to do what you propose, but you need to make an informed decision.

---

Typical scheme - will vary from scheme to scheme and council to council. Some schemes may be run by housing associations or involve other types of properties

Let us take the example of a £140,000 (retail price) house bought under an affordable housing scheme for £100,000 on a 50:50 basis (£50,000 by council, £50,000 from mortgage). It the house is sold before the end of ten years the council have a claw back in effect. Effectively you own 50% of the house and the council owns the other half for which you pay rent. When your mortgage is paid off, you can if both parties agree renegotiate the deal.

Sold after less than 1 year for £140,000 - council gets 90% of profit on their half of the house. I'm not sure if this is:

• (£140,000 - £140,000)x50%x90% = £0 or
• (£140,000 - £100,000)x50%x90% = £18,000 (more likely)

Sold after less than 2 year for £140,000 - council gets 80% of profit
Sold after less than 3 years for £140,000 - council gets 70% of profit
Sold after less than 4 years for £140,000 - council gets 60% of profit
Sold after less than 5 years for £140,000 - council gets 50% of profit
Sold after less than 6 years for £140,000 - council gets 40% of profit
Sold after less than 7 years for £140,000 - council gets 30% of profit
Sold after less than 8 years for £140,000 - council gets 20% of profit
Sold after less than 9 years for £140,000 - council gets 10% of profit
Sold after more than 10 years for £140,000 - council gets 0% of profit

Mailman

This is an irish web site that will give you more information on mortgages.

Spend a couple of hours going through the mortgage\property forum on this site and you'll know most everything you need to know to make an informed decision.

Be aware that although mortgage rates are in or around 4.9% at the moment the concensus is that they will be going up in the next couple of months so while at the moment it is better to pay a mortgage than rent in the shared ownership scheme it may not be as cheap in the future.

You may be better off just using whatever free cash you have to reduce the councils share rather than commiting to a larger mortgage to clear it in it's entirity.