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Rent Deposit Schemes

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    #32
    HollyCat
    Closed Accounts Posts: 5 ✭HollyCat


    What happens in 18 months if you cant get a mortgage? If the rent paid equates to a 10% deposit you'll need a 90% mortgage which dispite banks advertising are rare as hens teeth.
    If you contract to buy for €200,000 but in 18 months the bank value it at €160,000 (because prices continue to fall) they will then, assuming you can get a 90% mortgage, advance a maximum of €144,000. You'll need €46,000 to close the sale of which you've paid €20,000 (rent paid calculated for 10% deposit on €200,000) so you'll have a shortfall of €26,000 - What happens if you can't raise this €26,000? The answer given
    What if I can’t get a mortgage in a 18 months time?
    If you wish to extend the option for a further period, we will look at the situation then. We will take advice from financial advisers about your situation and work with you if you have a realistic chance of getting a mortgage in a reasonable time period.
    This is a bit wishy washy - Does any one know if there is anything in the contract which gives a more definitive answer?


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    #33
    tesslab
    Registered Users Posts: 146 ✭✭tesslab


    Im getting more & more interested in these schemes. If you were to find the "perfect place" and intended on living there for the future would it be worth your while? No doubt these schemes will be cropping up all over the country in the coming months.
    If at the end of the rental I had 25k savings myself to add on to the money received back from the scheme would it make much of a difference in getting a mortgage? As it stands without extra savings chances of getting a mortgage would be pretty difficult.
    Any advice welcome.


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    #34
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    tesslab wrote: »
    Im getting more & more interested in these schemes. If you were to find the "perfect place" and intended on living there for the future would it be worth your while? No doubt these schemes will be cropping up all over the country in the coming months.
    If at the end of the rental I had 25k savings myself to add on to the money received back from the scheme would it make much of a difference in getting a mortgage? As it stands without extra savings chances of getting a mortgage would be pretty difficult.
    Any advice welcome.

    Unless you do find somewhere that you can see yourself happy to live in longterm (20+ years) steer clear. Most of the schemes this is in place are either at unrealistic prices, or will be wholly unsaleable and have little resale value in the future.

    S.


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    #35
    MsMolly
    Closed Accounts Posts: 68 ✭✭MsMolly


    jobless wrote: »
    these schemes are a last resort for the developer to shift his housing stock at todays prices... The prices for these house will be a lot less in 18 months time...
    The 20 grand or so you paid in 18 months time wont look so so good when the properties are 40 k cheaper and your stuck with the price you agree today... the rent you pay is more or less going towards paying off SOME of the negative equity you'll be in


    every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.


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    #36
    sambuka41
    Registered Users Posts: 1,083 ✭✭✭sambuka41


    MsMolly wrote: »
    every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.


    Where is it???


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    #37
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    MsMolly wrote: »
    i will only pay what the house is worth when i buy it in 18 months.

    That is the knux of the problem. Most of these schemes have a proviso that none of the units can be sold on the open market until such time as the developer has offloaded their units. Accordingly it is a reasonable expectation that an open-market-valuation will not have been established- meaning the 'value' of the property will be determined by the developer to be whatever the last price he sold a unit for was (irrespective of when this was).

    Be very careful- and read everything they are saying backwards, often there is more in what is not actually said, than in the details they do give.

    S.


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    #38
    ntlbell
    Registered Users Posts: 16,288 ✭✭✭✭ntlbell


    MsMolly wrote: »
    every scheme is different and gives different incentives. the one i 've taken up has a builders guarantee and neg equity guarantee. i will only pay what the house is worth when i buy it in 18 months.

    who decides what the house is worth in 18 months time?

    How will they do it?


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    #39
    domibox
    Closed Accounts Posts: 1 ✭domibox


    Does anybody know anything about rent to buys schemes in Dublin?I am looking for the apartment- 2 bed in Dublin 18.


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