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Government Funds Local Authority Housing Scheme

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Comments

  • Registered Users Posts: 270 ✭✭shivermetimber


    It feels weird even asking this but does anyone know how long it usually takes for mortgage refusal from banks? Are we talking weeks or months?


  • Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Seriously, I wouldn't do anything re refusal until the details of the scheme is published & you read the small print. No point wrecking your bank & credit record if it turns out to be half-baked.


  • Registered Users Posts: 4,825 ✭✭✭LirW


    People, for real, nobody knows yet how easily accessible these loans are. If it is a case of bloody hard to get and people mess up their applications on purpose, not a smart move. Again, the previous scheme offered literally just a handful of mortgages to a huge load of applicants.
    Also the strange lending rule the new scheme brings supports over-borrowing, which is seems people are already considering again.
    While I understand that a a fixed mortgage at a low rate are incredibly attractive, there are certain economic factors that could cause a huge wave of job losses again the way it happened 10 years ago. And suddenly a third of your previous monthly income is too much to handle as a mortgage and you'll find yourself in real struggle again.

    I think this scheme supports not only house prices to rise but dangerous borrowing. Especially jobs on the lower income level are in risk in the future of just being wiped out.

    I can only urge people to caefully assess themselves what they can afford to repay even if things turn for the worse.

    While for now the deal sounds pretty sweet, nobody knows any details yet of how it really works out, what the waiting times are and how strict the assessments are for approval.
    And honestly messing bank applications up on purpose is not particularly smart when it comes to the biggest purchase of your live, because you have 2 refusals of lending institutes and no idea yet if you'll actually be granted the council mortgage anytime soon.


  • Registered Users Posts: 270 ✭✭shivermetimber


    LirW wrote: »
    People, for real, nobody knows yet how easily accessible these loans are. If it is a case of bloody hard to get and people mess up their applications on purpose, not a smart move. Again, the previous scheme offered literally just a handful of mortgages to a huge load of applicants.
    Also the strange lending rule the new scheme brings supports over-borrowing, which is seems people are already considering again.
    While I understand that a a fixed mortgage at a low rate are incredibly attractive, there are certain economic factors that could cause a huge wave of job losses again the way it happened 10 years ago. And suddenly a third of your previous monthly income is too much to handle as a mortgage and you'll find yourself in real struggle again.

    I think this scheme supports not only house prices to rise but dangerous borrowing. Especially jobs on the lower income level are in risk in the future of just being wiped out.

    I can only urge people to caefully assess themselves what they can afford to repay even if things turn for the worse.

    While for now the deal sounds pretty sweet, nobody knows any details yet of how it really works out, what the waiting times are and how strict the assessments are for approval.
    And honestly messing bank applications up on purpose is not particularly smart when it comes to the biggest purchase of your live, because you have 2 refusals of lending institutes and no idea yet if you'll actually be granted the council mortgage anytime soon.

    Kind of hard not to get carried away though if you are someone who fits the requirements and is currently being screwed with the rental market.


  • Registered Users Posts: 3,372 ✭✭✭sjb25


    Unfortunately the old mortgage schemes are to close come 1st February, if CoCos will still accept applications for it at all. The RIHL credit policy will replace the old one once it is signed into law.

    Well that’s a balls I’ll still qualify for this new scheme tho


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  • Users Awaiting Email Confirmation Posts: 15,001 ✭✭✭✭Pepe LeFrits


    Does anyone know how the councils are going to manage this? Have they the infrastructure there already? Are they white-labelling with a bank? Credit unions?

    I mean, it’s not like logging into their online banking and just flinging a load of cash at someone. There’s a lot of overhead and ongoing maintenance – front line staff, admin staff, finance staff, underwriters, solicitors, IT costs yada yada. Running a bank ain't cheap.


  • Registered Users Posts: 22,881 ✭✭✭✭zell12


    Does anyone know how the councils are going to manage this? Have they the infrastructure there already? Are they white-labelling with a bank? Credit unions?

    I mean, it’s not like logging into their online banking and just flinging a load of cash at someone. There’s a lot of overhead and ongoing maintenance – front line staff, admin staff, finance staff, underwriters, solicitors, IT costs yada yada. Running a bank ain't cheap.
    They've been doing it since 2011 under this 2009 Act


  • Registered Users Posts: 4,767 ✭✭✭GingerLily


    Kind of hard not to get carried away though if you are someone who fits the requirements and is currently being screwed with the rental market.


    Not everyone who meets the requirements will get one - you still probably have a better chance in financing through a bank


  • Registered Users Posts: 270 ✭✭shivermetimber


    GingerLily wrote: »
    Not everyone who meets the requirements will get one - you still probably have a better chance in financing through a bank

    I hear you but if your not in you can't win and all that. The problem is finance through a bank does not provide me with enough money to do anything with whereas this scheme would. Repayments on the new scheme would be half the current rental costs of a 1 bed in Dublin.


  • Moderators, Computer Games Moderators, Sports Moderators Posts: 14,526 Mod ✭✭✭✭Darkglasses


    Does anyone know how the councils are going to manage this? Have they the infrastructure there already? Are they white-labelling with a bank? Credit unions?

    I mean, it’s not like logging into their online banking and just flinging a load of cash at someone. There’s a lot of overhead and ongoing maintenance – front line staff, admin staff, finance staff, underwriters, solicitors, IT costs yada yada. Running a bank ain't cheap.

    It will vary from county to county in size, but most already have their own full loans department in place. Under various different schemes and models, County Councils have been offering and administering loans for decades.


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  • Posts: 4,727 ✭✭✭ Collins Glamorous Arrow


    I don't understand why a system can't be put in place based around rent payments.

    For example, a couple who can prove they've been renting for 5 years or more can pay less of a deposit, say 5 percent.

    That would help the people genuinely stuck renting.

    Makes no sense that a person with the option can just move home and save what other people pay towards rent and are considered good candidates while renters have no hope.


  • Registered Users Posts: 5,200 ✭✭✭hots


    The problem isn't giving people more ability to buy, it needs to be giving them more houses to buy once they are able.


  • Registered Users Posts: 31,001 ✭✭✭✭Lumen


    I don't understand why a system can't be put in place based around rent payments.

    For example, a couple who can prove they've been renting for 5 years or more can pay less of a deposit, say 5 percent.

    That would help the people genuinely stuck renting.

    Makes no sense that a person with the option can just move home and save what other people pay towards rent and are considered good candidates while renters have no hope.

    It's nothing to do with proving your ability to pay. It's about providing an equity cushion so that the bank can repo the property without making a loss (or more likely, that you continue paying when under stress because you don't want to lose your equity).

    In practice, repo in this country is almost impossible, but that's the logic.


  • Registered Users Posts: 23,180 ✭✭✭✭ted1


    I can see some potential pro's out of this.
    • It may force the main lenders to reduce their rates and some of their fringe costs. It may coax some vacant properties onto the open market as well as some of the private small time rental homes.
    • It will make things easier for some people to escape from a long term rental trap.
    • It will discourage sub prime lenders from entering the market.

    However I can't see it being decisive enough to make a difference bar the last, which is something that the Central Bank can control to some extent everything. Also, given the chronic lack of housing in most sectors of the market none of these were badly needed acting upon and it will only serve to hurt the market in the mid term.

    The government is going to be a subprime lender.
    When the defaults occur, it will be swept under the carpet as always.
    just give away the money and save on the admin.
    What makes you think that? The borrowers may have perfect credit scores, but fail stress tests For a mortgage with 5%+ rates. At 2.25% they are perfectly safe.


  • Registered Users Posts: 23,180 ✭✭✭✭ted1


    I don't understand why a system can't be put in place based around rent payments.

    For example, a couple who can prove they've been renting for 5 years or more can pay less of a deposit, say 5 percent.

    That would help the people genuinely stuck renting.

    Makes no sense that a person with the option can just move home and save what other people pay towards rent and are considered good candidates while renters have no hope.
    Because the banks are still exposed to propert drops , 10 and 20% deposits means that the property can drop in price by 10-20% and the bank can still recoup their money.


  • Registered Users Posts: 23,180 ✭✭✭✭ted1


    Does anyone know how the councils are going to manage this? Have they the infrastructure there already? Are they white-labelling with a bank? Credit unions?

    I mean, it’s not like logging into their online banking and just flinging a load of cash at someone. There’s a lot of overhead and ongoing maintenance – front line staff, admin staff, finance staff, underwriters, solicitors, IT costs yada yada. Running a bank ain't cheap.
    Big councils like Dublin City have these departments and staff, they use them to look after their shared ownership / affordable housing / hap/ etc


  • Registered Users Posts: 34 Househunter16


    If a person was to get one of these mortgages, we will say 200k,and after 10 years wanted to pay it back would there be a big penalty for doing so.


  • Registered Users Posts: 22,881 ✭✭✭✭zell12


    If a person was to get one of these mortgages, we will say 200k,and after 10 years wanted to pay it back would there be a big penalty for doing so.
    Why would you @ 2% pa?


  • Registered Users Posts: 34 Househunter16


    zell12 wrote: »
    Why would you @ 2% pa?

    If you wanted to sell the house, or just to have it paid back.


  • Moderators, Recreation & Hobbies Moderators Posts: 4,475 Mod ✭✭✭✭dory


    If you wanted to sell the house, or just to have it paid back.

    Yea I'd also like to know about selling it on later. I'll have to read the small print.


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  • Registered Users Posts: 17,833 ✭✭✭✭Idbatterim


    GLaDOS wrote: »
    Myself and my girlfriend are a little above the joint threshold.

    Sometimes I wonder why we bother working.

    maybe explain it to employer, they can give you E500 all for one voucher, worth E1000 at the marginal rate , there would be E2000 between you, in a salary "reduction" ...


  • Registered Users Posts: 22,881 ✭✭✭✭zell12


    It's in the booklet
    1. fixed:
    - during the fixed rate period, you may be liable for a breakage fee if you switch to a variable rate or pay off all or part of your mortgage.
    2. variable:
    - the flexibility to make lump sum repayments, increase your repayments or make early repayments


  • Registered Users Posts: 4,502 ✭✭✭Topgear on Dave


    Somebody (not me) has made a very very funny video about the governments latest scheme :pac:

    https://www.captiongenerator.com/870682/Government-response-to-the-housing-crisis

    All credits to user "A random walk" over on the pin.


  • Banned (with Prison Access) Posts: 42 bot44


    "We've people earning 30k outbidding people earning 70k"

    :)




  • Ah I'm p1ssing myself

    That video makes it all worthwhile


  • Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Hmm, if I were to temporarily reduce my working hours, I'd qualify for the same mortgage as I currently do, with a low interest rate guaranteed for the life of my mortgage.
    My salary for last year has me under the limits as I only qualified in June. This year as it stands I'd be 10k over it, but net difference is only around5k....might talk to my boss.

    Just popped my reduced salary into a mortgage calculator on rebuilding Ireland. I can borrow 60k more than what I currently can get and have a lower mortgage repayment.
    Where I'm looking to buy, I could rent out the two other bedrooms through rent a room for near enough the mortgage and live pretty much mortgage free for the next few years.


  • Registered Users Posts: 235 ✭✭Lolle06


    Hmm, if I were to temporarily reduce my working hours, I'd qualify for the same mortgage as I currently do, with a low interest rate guaranteed for the life of my mortgage.
    My salary for last year has me under the limits as I only qualified in June. This year as it stands I'd be 10k over it, but net difference is only around5k....might talk to my boss.

    Just popped my reduced salary into a mortgage calculator on rebuilding Ireland. I can borrow 60k more than what I currently can get and have a lower mortgage repayment.
    Where I'm looking to buy, I could rent out the two other bedrooms through rent a room for near enough the mortgage and live pretty much mortgage free for the next few years.

    Yes, you could do this. But then again: This scheme is probably for ppl who do not reduce their higher salary on purpose, but who usually earn a lower salary up to the point of application?! Meaning you‘d have to reduce your salary for 12 months pre-application for this mortgage? And you still don’t know if you WILL be approved for this, so it is actually a rather big gamble - losing out on the extra salary for nothing? Same applies for ppl who suddenly have a thing for gambling or get a new car-loan, I would think.


  • Registered Users Posts: 4,767 ✭✭✭GingerLily


    Lolle06 wrote: »
    Yes, you could do this. But then again: This scheme is probably for ppl who do not reduce their higher salary on purpose, but who usually earn a lower salary up to the point of application?! Meaning you‘d have to reduce your salary for 12 months pre-application for this mortgage? And you still don’t know if you WILL be approved for this, so it is actually a rather big gamble - losing out on the extra salary for nothing? Same applies for ppl who suddenly have a thing for gambling or get a new car-loan, I would think.

    Its a bit worrying alright that some people think this way!


  • Registered Users Posts: 235 ✭✭Lolle06


    GingerLily wrote: »
    Its a bit worrying alright that some people think this way!

    It is worrying, isn’t it? But here we are...


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  • Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Lolle06 wrote: »
    Yes, you could do this. But then again: This scheme is probably for ppl who do not reduce their higher salary on purpose, but who usually earn a lower salary up to the point of application?! Meaning you‘d have to reduce your salary for 12 months pre-application for this mortgage? And you still don’t know if you WILL be approved for this, so it is actually a rather big gamble - losing out on the extra salary for nothing? Same applies for ppl who suddenly have a thing for gambling or get a new car-loan, I would think.

    Instead of working 47 hours a week that I'm currently working to try and get a mortgage as a single earner, I'll just work 38. Much better quality of life, I can buy the house I'd like to buy and pay less interest.

    My salary certificate for last year has me just under the magic threshold of 50K. I was on minimum wage until I qualified in June. So in that regards I'm safe.
    I've been in continuous employment the past 2 years with the same employer.

    As for the cut in salary, after tax, it works out at 5k less a year. However it would only be until the house was purchased, then the current salary would increase back to it's normal rate. The way the job market is at the moment in my field, if my salary wasn't reinstated, I'd easily get it elsewhere. Or I could go working as a contractor which pays significantly more, but which the banks won't lend against as I need three years audited accounts.

    Is it abusing the ideas behind the scheme. Of course! However when you create a situation where a small reduction in net monthly take home pay leads to increased borrowing capacity and a lower interest rate, don't expect it to not be abused.


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