FTB Advice/Help needed

underpaid · 12-10-2010 4:13pm #1

Hi Guys and Gals, hope this is the right section, need a bit of advive from people in similar situation that we find ourselves in.

Last year my partner entered into a "rent to buy" scheme for an apartment in Ballincollig, 10 mins from Cork City. We went back and spoke to the auctioneer recently about purchasing the property after agreeing a sale price. Since april 09 we have been paying €900 a month with all the rent been set against the purchase price, this along with the deposit of €5000 equates to over €20,000. She approached a number of financial institutions, was told she had a very strong case and repayments would vary between €520-590 per month AND then they refused to grant because of her job.

She works as a Special Needs Assistant (SNA) which is done on a rolling contract obviously once the child she is assisting leaves the school/dies/moves etc. then she is assigned a new child to care for. They asked for a letter of permanentcy (sp) but the principal advised they were not allowed give that but gave her a glowing report and stated on the letter that she would be with the school for the forseeable future and she has been working there for 4 years already. She has a permanent job in all but writing because the department doesnt allow it, also there are SNA's in her school with over 20 years so its not really a recent phenomena.
The CINO (sp?) went into the school (COPE by the way) twice last year looking to make cut backs and twice they reported back that the school was actually understaffed and no cut backs would be made.

A few people in the school in a similar situation have been granted mortgages on their own so she is finding out whom they got the mortgages with but does anyone on here have similar experiences or advice on where to turn to? Sorry for the long post but wanted to get all information into and probably have still missed a few bits.

Thanks in advance.

Treehouse72 · 12-10-2010 4:21pm

Basically what this is about is the banks' unwillingness to lend. They are looking for any excuse to refuse an applicant, and in your partner's case the lack of an actual permanent contract (even though she has a de facto one) is all the excuse they need. The banks appear only to be lending to those who are cast-iron guaranteed to pay back the money, meaning either public sector workers, the very wealthy, or people with low LTV's and thus small mortgages. I don't think your situation is uncommon at all, nor that your partner is being especially harshly treated, nor that there is any way around this - it is simply the way things are in Ireland at the moment.

Could I ask also, since you started renting last year, by how much has the property you are renting fallen in value? And what makes you think it has stopped falling in value and that now is the correct time to fix the price with the auctioneer?

underpaid · 12-10-2010 4:27pm

Hi Treehouse, the first apartments in the complex were sold 3-4 years ago at a cost of €335k, last April my partner signed up to the rent to buy and the apartments value was lowered to €240k, our apartment is one of only 2 remaining and thus we got a reduced rate (and also after a lot of haggling) of €180 minus any rent we have paid plus deposit (€20k) leaving the purchase price at €160k. We have thought and talked long and hard and feel the apartments is value for money at that price and the chances of them dropping much more than that is unlikely.

lainey316 · 12-10-2010 4:43pm

I hope it's at least a 2 bed (I assume it's Classes Lake) - with decent sized 3 bed semis in good estates in Ballincollig asking between 200 and 250 it really doesn't sound like 180k is a great deal for an apartment. Have a look at what's around and see if you can negotiate the price down, if you can reduce the value she might get more joy off a bank on a shorter term mortgage?

underpaid · 12-10-2010 4:57pm

Correct lainey , its a 2 bed apartment in Classes Lake, its an ex show apartment so its the biggest in the block. We thought the same but have already looked around and to be honest other properties in our price range needed work or renovation and it would stretch us too much, we have 20k knocked off the price of this property so mortgage will be for €160 which we are comfortable with.Nothing else around that price range.

lainey316 · 12-10-2010 5:02pm

underpaid wrote: »

Correct lainey , its a 2 bed apartment in Classes Lake, its an ex show apartment so its the biggest in the block. We thought the same but have already looked around and to be honest other properties in our price range needed work or renovation and it would stretch us too much, we have 20k knocked off the price of this property so mortgage will be for €160 which we are comfortable with.Nothing else around that price range.

Not now. In 6 months? I'd just be - am - concerned about what's going to happen in Ballincollig. So many, many, many new properties, an awful lot of rentals to Eastern Europeans who are heading home, a lot of people bought at high prices... there could be quite a lot of distressed sales next year. Best of luck in any case, as long as you are happy in the property and happy to live there for the forseeable future (including with kids if you want them) then it's really not an issue.

underpaid · 12-10-2010 5:09pm

I understand what your saying lainey but it will mean nothing if she can never get a mortgage with the job she is in? Seems very odd to me that some people in her work place have got them in the same situation as she is in and some cant like her?

lainey316 · 12-10-2010 5:14pm

underpaid wrote: »

I understand what your saying lainey but it will mean nothing if she can never get a mortgage with the job she is in? Seems very odd to me that some people in her work place have got them in the same situation as she is in and some cant like her?

Depends on when they got them - probably before the banks tightened up their requirements? I just don't think the majority of institutions really have the appetite to lend to anyone with slight risk. And tbh, contracting into education, no matter what the school says, means her job is genuinely at risk. If the funding is cut, they might have no choice. Hopefully one of her colleagues will be able to point her in the right direction. After the budget with a clearer view of the what this shower are targeting for cuts, maybe she'll have a better chance.

You'd think the banks would be slow to lend for properties than scream 'impending negative equity' as well - if you do default, and they repossess but can't even get 100k for it, it's a pretty poor investment on their part.

underpaid · 12-10-2010 5:22pm

lainey316 wrote: »

Depends on when they got them - probably before the banks tightened up their requirements? I just don't think the majority of institutions really have the appetite to lend to anyone with slight risk. And tbh, contracting into education, no matter what the school says, means her job is genuinely at risk. If the funding is cut, they might have no choice. Hopefully one of her colleagues will be able to point her in the right direction. After the budget with a clearer view of the what this shower are targeting for cuts, maybe she'll have a better chance.

You'd think the banks would be slow to lend for properties than scream 'impending negative equity' as well - if you do default, and they repossess but can't even get 100k for it, it's a pretty poor investment on their part.

Fair points,

One of her colleagues got her mortgage quite recently on her own for a house in Mallow which is dangerously full of empty houses.

The CINO (sp?) went into the school (COPE by the way) twice last year looking to make cut backs and they reported back that the school was actually understaffed and no cut backs would be made.
Our apartment is one of two remaining with all other apartments (90ish) being occupied, seems that alot are owner occupied with only a minority that are rented.
Good point about the budget though maybe once the shower above have decided who there going to screw and by how much then we might have a better idea.Thanks.

lainey316 · 12-10-2010 6:56pm

underpaid wrote: »

Our apartment is one of two remaining with all other apartments (90ish) being occupied, seems that alot are owner occupied with only a minority that are rented.

Just to clarify, I meant the number of rentals in Ballincollig as a whole - that complex on Station Road for example seems to have a lot of rentals.

Anyway, best of luck, hopefully the Mallow (god help her) lady will point you in the right direction.

underpaid · 21-10-2010 4:12pm

A friend mentioned something about approaching the council for a mortgage, which I thought was only for affordable housing, he said that you can get a mortgage for any property aslong as you qualify for it, mortgage payment must be no more than 30% of your salary is this correct?
Anyone have experience of this type of mortgage? What is limit you can borrow etc.?

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