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Mortgage Interest Relief for Credit Union Loan?

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  • 17-11-2012 2:44pm
    #1
    darlett
    Registered Users Posts: 2,312 ✭✭✭


    Hi as a first time buyer Im looking to close a deal for a property soon.

    But I have a couple of questions and I keep finding different points of view so I m hoping to get things clearer in my head.

    Firstly as the Title asks, can I get Mortgage Interest Relief for a Credit Union loan? My initial understanding was no, but just to be sure I asked the CU manager and his answer was that while its unusual for a CU to be giving loans for a house, any loan for a house was essentially a mortgage to it should be valid. I wonder if people know a bit more about this?
    (I'm aware that bank loans have cheaper interest and are certainly valid for this, but they wanted NOTHING to do with me despite no bad credit history-So im very grateful to the CU for giving me a chance)

    Secondly, I am a first time buyer...what are the current benefits for that if any? Specifically do I have to pay stamp duty on the house? Again I've read confusing reports either way, and my current thinking is no I wont have to but I'm unsure. I can make it work either way, but every piece helps.


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    #2
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Does the credit union have a mortgage (title deeds) on your house?


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    #3
    darlett
    Registered Users Posts: 2,312 ✭✭✭darlett


    smcgiff wrote: »
    Does the credit union have a mortgage (title deeds) on your house?

    I think the answer to that would be yes, the loan was subject to 3 "special conditions", the first of which was:

    "1st Legal Charge to be taken by 'X' Credit Union Limited over the Title Deeds of the house being purchased at 'X address'"


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    #4
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Yes you can get MIR on a CU loan. Remember it is being abolished at the end of the year, so if you are just arranging finances now, i can't see you making it tbh.

    Stamp duty is 1 percent.


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    #5
    darlett
    Registered Users Posts: 2,312 ✭✭✭darlett


    StillWaters wrote: »
    Yes you can get MIR on a CU loan. Remember it is being abolished at the end of the year, so if you are just arranging finances now, i can't see you making it tbh.

    Stamp duty is 1 percent.

    Right, yeah I think it might be a squeeze too far at this stage time wise, everything has been happening extremely slowly to get this far. The credit union have now sent the loan pack to my solicitors who will have to send it to credit union solicitors who seemingly are a big firm so I can see it getting held up there for awhile. Fingers crossed though, Ill have to keep ringing and pushing.

    And stamp duty is 1 percent and 1 for all then. Well thats ok, the bigger thing would be if I can beat the MIR deadline.


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    #6
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    I'm not asking which credit union- but they could be in serious trouble if it got out they were issuing mortgages. It sounds like they are putting a lien on the property- as security on a loan- which regardless of how you spin it- is not a mortgage per se. They are simply establishing themselves as a tier 1 creditor, in the event that you declare bankruptcy. Presumably the title deeds for the property are lodged with another institution who are granting the mortgage on the property?


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    #7
    0325422
    Registered Users Posts: 81 ✭✭0325422


    darlett wrote: »

    I think the answer to that would be yes, the loan was subject to 3 "special conditions", the first of which was:

    "1st Legal Charge to be taken by 'X' Credit Union Limited over the Title Deeds of the house being purchased at 'X address'"

    Im in the same boat, getting loan for house off credit union.. The first legal charge thing is being sent to my solicitor on Monday and when this goes back to credit union with proof of house insurance the credit union will release the money.. How long will this take I wonder.. Would be nice to get Mir if sale was done before year end.


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    #8
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    smccarrick wrote: »
    I'm not asking which credit union- but they could be in serious trouble if it got out they were issuing mortgages. It sounds like they are putting a lien on the property- as security on a loan- which regardless of how you spin it- is not a mortgage per se. They are simply establishing themselves as a tier 1 creditor, in the event that you declare bankruptcy. Presumably the title deeds for the property are lodged with another institution who are granting the mortgage on the property?
    Not necessarily. Credit unions whilst not issuing mortgages, are issuing loans for home purchase. This is only viable of course if the loan is low enough to be affordable over a shorter period than a traditional mortgage, and the savings ratio stays intact.

    They are filling a gap in the Market where banks are not really interested in low mortgages (<50k) and the borroower has the means to repay the loan.

    There are disadvantages to the borrower, higher interest rates, no MARP, no MIS. But it is suitable for a small number of people.


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