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2017-21 help to buy scheme - megathread. All help to buy discussion here please

PedroDublin

Hello everyone, what do you think the purchase date mean on the new help to buy scheme? Contracts signed by buyers, contracts received, mortgage withdrawal, closing date..... I have seen different things on different news

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CruelCoin

Aph2016 wrote: »

Complete greed on behalf of the developers.

Did you think they were charities?

cronos

Michael D Not Higgins wrote: »

That's more or less the point of the help to buy scheme. It's a way to give the developers a boost to encourage building new housing but also a palatable way to sell it to the electorate as help for the buyer.

Other houses where I have purchased have gone up 20k since April last year. But to be fair the market has probably increased naturally over that period of time. Price hasn't moved in January though from what I can see.

cronos

Anyone heard back from their builder or morgage provider yet? Assuming you gave them the application code and access code? I'm curious if they even know what they should be doing with it.

Aph2016

Michael D Not Higgins wrote: »

That's more or less the point of the help to buy scheme. It's a way to give the developers a boost to encourage building new housing but also a palatable way to sell it to the electorate as help for the buyer.

In this particular development the house has already been built and it has been sitting there since November unsold and it has literally jumped in price by 15k over night due to the scheme. So no that's not the point of the scheme, that is pure greed on behalf of the developer. 15k extra into their back pocket when absolutely nothing has changed for them and no extra costs have been incurred.

StupidLikeAFox

Aph2016 wrote: »

In this particular development the house has already been built and it has been sitting there since November unsold and it has literally jumped in price by 15k over night due to the scheme. So no that's not the point of the scheme, that is pure greed on behalf of the developer. 15k extra into their back pocket when absolutely nothing has changed for them and no extra costs have been incurred.

The goal is to stimulate building over the next 3+ years. It may well be a giveaway to the builders, but its not really right to judge it in the first week of it opening.

cronos

Aph2016 wrote: »

In this particular development the house has already been built and it has been sitting there since November unsold and it has literally jumped in price by 15k over night due to the scheme. So no that's not the point of the scheme, that is pure greed on behalf of the developer. 15k extra into their back pocket when absolutely nothing has changed for them and no extra costs have been incurred.

Well not necessaraly, people will just look at second hand properties more if they get too greedy. Should keep a balance, will of course be some blinded by a free 20k. But in general I think people are smarter than that. You might find they are more open to negotiation, especially given it hasn't sold since November. Most people have known about the HTB scheme for a good while.

CruelCoin

Aph2016 wrote: »

What kind of a response is that? I think you're missing the point.

This is how the economy works. The more people who are able to pay for something leads to competition for fewer units per person.
Houses don't spring up like magic....Of course there was going to be a short term price jump. Anyone who didn't falls asleep in business class, day one, could tell you that.

Your point was that you don't feel like developers should be able to make a market determined profit, which is silly.

Michael D Not Higgins

Aph2016 wrote: »

In this particular development the house has already been built and it has been sitting there since November unsold and it has literally jumped in price by 15k over night due to the scheme. So no that's not the point of the scheme, that is pure greed on behalf of the developer. 15k extra into their back pocket when absolutely nothing has changed for them and no extra costs have been incurred.

Even if it was bought in November it would qualify for the scheme. The market is rising to the demand, which has risen at least 5% of the purchase price because of this scheme.

Unless the government made it such that only properties started after the announcement would count, there was always going to be a price jump on current new build properties. And they wouldn't have done that because the timescales on that would be too slow to have the desired effect.

If developers get an extra 5% for property now which enables them to build more houses for the future, then the government have succeeded in their job.

Along the way the FTBs get their houses too. Let's say a house is 300k and there's FTBs with ~77k salary with 15k deposit saved. They can't qualify for a mortgage under the Central Bank rules. The scheme is introduced, the house goes to 315k, the FTBs get 15k extra from the government and qualify straight away. Their mortgage amount doesn't change but the 15k made the difference to qualify for the loan.

That example is exactly the type of borrower the government were targeting. People have been complaining to the government since the introduction of the mortgage lending rules about not being able to save the deposit and pay rent at the same time. This is a workaround measure for those people.

alegalalien

Can I have a question:
I did apply for the Help To Buy scheme, 1st step, the application was successful.
Now is the next step to claim the refund, in which we need to upload the required documents.

- How can we upload the required documents like signed contract ?
- Purchase price: Can we use the property price register or from Stamp Duty ?
- What is the difference between Purchase date vs completion date ?

Many Thanks.

cronos

alegalalien wrote: »

Can I have a question:
I did apply for the Help To Buy scheme, 1st step, the application was successful.
Now is the next step to claim the refund, in which we need to upload the required documents.

- How can we upload the required documents like signed contract ?
- Purchase price: Can we use the property price register or from Stamp Duty ?
- What is the difference between Purchase date vs completion date ?

Many Thanks.

Have you sent your access code and application code to your builder and morgage provider. Have they done their bit? After that I believe Revenue contact you to tell you this has been done, then you will be able to upload the contract etc...

CruelCoin

Michael D Not Higgins wrote: »

That example is exactly the type of borrower the government were targeting. People have been complaining to the government since the introduction of the mortgage lending rules about not being able to save the deposit and pay rent at the same time. This is a workaround measure for those people.

It's also reckless and very short-sighted.

It forgets the very foundation of the bubble: that people who could not afford homes were launched into them.

This is just the government caving to public pressure and paving the way for bubble 2.0

Michael D Not Higgins

CruelCoin wrote: »

It's also reckless and very short-sighted.

It forgets the very foundation of the bubble: that people who could not afford homes were launched into them.

This is just the government caving to public pressure and paving the way for bubble 2.0

It does nothing to circumvent the LTI ratio which is the one in place to ensure affordability. The LTV has nothing to do with affordability and everything to do with protecting the bank by ensuring a stake in the house against price drops and negative equity.

I know where you're coming from but the way the measures are targeted and the relatively modest price increases since the lending rules came in, means that the effect overall should be small enough. Mortgage buyers are about half of the market of which FTBs are I think about half again, of which new build buyers are probably a smaller fraction. We're looking at something like 5% of the market which these measures target.

We need more houses, there's no two ways about it. This is one measure that is striving to deliver those houses. In isolation it is ineffective, and it does require a lot of investment on the supply side rather than demand side but that's government policy for you. No votes in giving developers a dig out unless you spin it as a help to buy scheme.

This scheme doesn't extend additional credit to those who can't afford it. It merely allows them to get that credit quicker. And for those with a deposit saved already, it reduces their principal with the 5% top-up.

alegalalien

@cronos: I have not done that.
I will do it soon.
Thank you for your advice.

CruelCoin

Michael D Not Higgins wrote: »

This scheme doesn't extend additional credit to those who can't afford it. It merely allows them to get that credit quicker. And for those with a deposit saved already, it reduces their principal with the 5% top-up.

It's nothing about speed. It's about enabling people who are unable to save and pay rent at the same time.

If you have no buffer, none, and no capability of building one, then you have no business in being considered for a mortgage. What if you're out sick for a few weeks? What if, what if.

These are precisely the kind of people who can't afford a home in the real world, and precisely the kind of people who led to the last sub-prime catastrophe.

<mod snip: this forum is not a politics forum>

StupidLikeAFox

CruelCoin wrote: »

It's nothing about speed. It's about enabling people who are unable to save and pay rent at the same time.

If you have no buffer, none, and no capability of building one, then you have no business in being considered for a mortgage. What if you're out sick for a few weeks? What if, what if.

These are precisely the kind of people who can't afford a home in the real world, and precisely the kind of people who led to the last sub-prime catastrophe.

<mod snip>

You still have to prove repayment capacity to the bank

CruelCoin

StupidLikeAFox wrote: »

You still have to prove repayment capacity to the bank

Great! You can repay the mortgage. But in the event the boiler fails, the roof comes in, the anything, you have zero capability to cope with that scenario.

Making people save for their deposits weeds out people with financial situations so precarious....

You don't see the risk in this?

CramCycle

CruelCoin wrote: »

Great! You can repay the mortgage. But in the event the boiler fails, the roof comes in, the anything, you have zero capability to cope with that scenario.

Making people save for their deposits weeds out people with financial situations so precarious....

You don't see the risk in this?

My mortgage is nearly 40% lower than my rent was once I add on insurance costs for most issues that my landlord would have covered.
I had capacity for a small bit of saving. Timing was lucky for me but I know several people who are better suited to mortgage in regards repayment capacity who at the moment, are crippled by rent that lowers their saving capacity to the point where house prices are rising quicker than their deposit is increasing even though their mortgage would be cheaper per month if they got in now rather than in 10 years (due to repayment time reduction).
The truth is, while this continues, the prices will rise until we bubble and bust again, anything that encourages building new builds should be encouraged. This said there are several other things the government should be doing. Height restrictions in expanding cities need to be severely revisited, grants for redevelopment of property that increases housing capacity by at least 100% should be on the cards. 1 in 5 random distribution for social housing (not block building it at the edge of the development or giving cash back to buy it out). This is a step in the right direction, not a big enough one, but as always no one in governement or in opposition, really has the balls to lay it all out on the table and say, here is something we have to do, this in my opinion is better than nothing.

sibersha

Application has been "Under Review" since yesterday. Anyone else taking this long?

All we've done so far is select our tax years to be used and no option to do anything else.

T-b0n3

sibersha wrote: »

Application has been "Under Review" since yesterday. Anyone else taking this long?

All we've done so far is select our tax years to be used and no option to do anything else.

I'm in the same boat.

I spoke to some one on the phone today in the revenue and she said in my case it was because I had an under payment on my P21 balancing statement. It was 5 cent so not sure what I need to do to fix it, I'm guessing it just flags up and error and then someone needs to look into it and action it?

StupidLikeAFox

CruelCoin wrote: »

Great! You can repay the mortgage. But in the event the boiler fails, the roof comes in, the anything, you have zero capability to cope with that scenario.

Making people save for their deposits weeds out people with financial situations so precarious....

You don't see the risk in this?

Im not sure you are outlining a realistic scenario.

If you are earning €30k your take home pay is €2k net per month. Lets say you are paying 1.5k rent per month, can't afford to save so you have a proven repayment capacity of 1.5k in the banks eyes.

Because you are only on €30k your max mortgage amount is only going to be €105k. You can easily afford to repay a mortgage of this amount (and then some) but you are not able to save for the deposit - which is where this scheme comes in.

You are making the assumption that if you can't save you can't pay back the mortgage, I was making the point that once you have the deposit the banks will still need to be prudent around repayment capacity

Utah

Going to start the process tomorrow. We bought in November.

Will we be getting a tax credit or a refund lump sum?!

morrga

Utah wrote: »

Going to start the process tomorrow. We bought in November.

Will we be getting a tax credit or a refund lump sum?!

Refund lump sum paid direct to your bank account.

CramCycle

+1 I know several people whose repayment capacity is 40% or more above what their mortgage would be but due to high rent they save little and have no one to give them the first deposit like many in the old days would have had.

My own mortgage is 35% less than my rent (after I add in cost of insurance etc.). I did not have such insurance when I was renting as I could not afford it if I wanted to save for a mortgage.

MissElle

Quick question, when we signed contracts we only paid 10k and not the full 10% (17K in total with the booking fee). Can I still apply for the scheme now or do I need to wait until we pay the rest (i.e. draw down in April?)

morrga

MissElle wrote: »

Quick question, when we signed contracts we only paid 10k and not the full 10% (17K in total with the booking fee). Can I still apply for the scheme now or do I need to wait until we pay the rest (i.e. draw down in April?)

You can apply now.

CruelCoin

StupidLikeAFox wrote: »

Im not sure you are outlining a realistic scenario.

If you are earning €30k your take home pay is €2k net per month. Lets say you are paying 1.5k rent per month, can't afford to save so you have a proven repayment capacity of 1.5k in the banks eyes.

Because you are only on €30k your max mortgage amount is only going to be €105k. You can easily afford to repay a mortgage of this amount (and then some) but you are not able to save for the deposit - which is where this scheme comes in.

You are making the assumption that if you can't save you can't pay back the mortgage, I was making the point that once you have the deposit the banks will still need to be prudent around repayment capacity

You're also not using a realistic scenario.

Someone who is only able to get a mortgage of 105k isn't going to be able to rent a buy a comparable home anywhere near an area with €1500 rents.

If they're unwilling to rent in a cheaper area then its unlikely they'd move for cheaper houses....

If they truly wanted the house, they'd bite the bullet, move to a cheaper area, put up with not being in the city and save.

The very fact they're unwilling to do this, and do the necessary shows how unsuitable they are for home ownership.

Captain Chaos

CruelCoin wrote: »

You're also not using a realistic scenario.

Someone who is only able to get a mortgage of 105k isn't going to be able to rent a buy a comparable home anywhere near an area with €1500 rents.

If they're unwilling to rent in a cheaper area then its unlikely they'd move for cheaper houses....

If they truly wanted the house, they'd bite the bullet, move to a cheaper area, put up with not being in the city and save.

The very fact they're unwilling to do this, and do the necessary shows how unsuitable they are for home ownership.

I rented when I was paying €1100 pm and was on 36k at the time. Still can't get a mortgage where I want to live but I can rent in the areas even though mortgage repayments would be cheaper and leave me with a few 100 extra left over each month, I can actually save if the bank gave me a mortgage but I can't while renting. It's a crazy system, the rules are forcing me to pay more than I need to to live where I'd like because I "can't afford it" in the banks eyes yet somehow I am and have been for years.

athtrasna

Mod note

Can we get back to help to buy discussion please. There are plenty of other threads to discuss mortgage affordability and qualification.

louise1985

Can someone tell me if you are in a group i.e. A couple, must both parties go in and register for the help to buy or is it just one person and the other accepts to be part of the group and that is sufficient.
I registered both myself and my other half my application has given me an application code and states it under review whereas my other halfs states that is is pending and shows that it is awaiting for me to confirm membership.
TIA

morrga

louise1985 wrote: »

Can someone tell me if you are in a group i.e. A couple, must both parties go in and register for the help to buy or is it just one person and the other accepts to be part of the group and that is sufficient.
I registered both myself and my other half my application has given me an application code and states it under review whereas my other halfs states that is is pending and shows that it is awaiting for me to confirm membership.
TIA

Both parties have to seperarely log in and apply, but apply as a group. I too am having trouble joining our apps into one group as it keeps saying each of our memberships are awaiting the other but I can't find where to confirm acceptance into the group. Anyone any idea?