Central Bank to limit amount banks lend for home purchase

The Spider

flogen wrote: »

Maybe... but with property prices now effectively linked to incomes, they'll find themselves in that position for a long time.

I think you'll find that people would rather have the asset rented out paying for itself than crystallising the debt, and finding that they then have to pay the remaining outstanding debt, when they could have had a tenant paying it.

johnp001

MayBea wrote: »

...
If the new CB rules were introduced last year, around 3,620 homebuyers would have either not being able to buy or would have need to reevaluate their finances.

Interesting data. Another way of looking at it would be that some portion of those 3,620 sellers would have accepted the lower offers that the market was able to provide and the wildly out-of-line property price inflation last year would have been lower as a result.

TrishSimon

CarpeDiem85 wrote: »

I was aiming to buy a house in the next 4-5 years. Hopefully the rules will have changed by then because even a 10% deposit seems a long way off at the minute.

I think your best bet would be to think like its the 20% deposit needed keep ploughing away at saving and if it changes by the time you buy then you will have more funds to use furnishing the house etc...if not then at least you will have your deposit all sorted. For me I was saving aiming for the 10% deposit and hoping to buy this year but thats all gone out the windown now I have to save until april 2017 to acheive the 20% deposit I need.

jester77

CarpeDiem85 wrote: »

I was aiming to buy a house in the next 4-5 years. Hopefully the rules will have changed by then because even a 10% deposit seems a long way off at the minute.

4-5 years is a long way off. If you are looking to buy in that time then you would have a good bit saved already, so another 4-5 years will increase that significantly. Plus these rules will bring stability to the market. In your case, I wouldn't be getting too worried. Things will be a lot clearer in 2-3 years and you will still have a few years after that to sort things out.

seamus

CarpeDiem85 wrote: »

I was aiming to buy a house in the next 4-5 years. Hopefully the rules will have changed by then because even a 10% deposit seems a long way off at the minute.

With all due respect, if a 10% deposit in five years seems a long way off, then you need to consider whether you even earn enough to afford your own home at all, or whether you're being realistic about what and where you want to buy.

TrishSimon

kippy wrote: »

You'd want to take a long hard look at the cost of housing in any area with jobs in Canada or Aus before making that decision.

Of course we will but you know we have been slogging away since 2012 trying to get the deposit together because we rent a property for € 1100 pm and we were beginning to see light and were looking at houses in the 230K mark so not huge but we have to look at things again it just seems like every time you think you are about to make a step forward you get knocked back so as the other poster said I too am devastated. I am however not going to dwell on it and am just ploughing away saving more because there is nothing I can do.

by the seaside

TrishSimon wrote: »

Of course we will but you know we have been slogging away since 2012 trying to get the deposit together because we rent a property for € 1100 pm and we were beginning to see light and were looking at houses in the 230K mark so not huge but we have to look at things again it just seems like every time you think you are about to make a step forward you get knocked back so as the other poster said I too am devastated. I am however not going to dwell on it and am just ploughing away saving more because there is nothing I can do.

Are you both FTBs?

If so your minimum deposit has just gone up from 23k to 24k. Don't despair.

CarpeDiem85

I suppose in the long run, it's a smaller mortgage to repay but unless you can live at home, rent a cheap place, win money or are gifted money to help with the deposit, it will be hard to save for a 20% deposit and have a bit of a life. It will take me 4 years to get a 10% deposit and that's already stretching myself to live an extremely frugal life. I just hope my lotto numbers come up some day!

Michael D Not Higgins

johnp001 wrote: »

These rules also prohibit >90% lending for any class of buyer.
>90% lending figures (blue line) as given in the CB report

Do they? I have only seen regulation of a percentage of loans being above or below the limit, no circumscription against 90% LTV.

Edit: I've read the press release again, there's no prohibition on 90+% LTV apart from the 15% limit.

CarpeDiem85

Like I said Seamus, my job is in Dublin. I have a child who I support on my own. I will have to rent in Dublin on my own, pay bills and try to save €100+ per week. Please don't question if I could hold down a mortgage myself. I am aware how much it costs to live! If I could move out of Dublin and get the same job at home, I'd be out of there in a flash but it's not going to happen anytime soon.

crisco10

the way I read it, the bank could give a 100% LTV mortgage and put it in their 15% exception pot.

RoboRat

the kelt wrote: »

That more or less sums up how im feeling today to be honest.

Things were beginning to look up and now i honestly feel more trapped than ever. Feeling trapped is a horrible feeling.

Yup, thats how I feel today.... thoroughly beaten down. There was finally light at the end of the 7 year tunnel. I could finally cut free from a house I couldn't live in and buy something and settle down with my family without the constant worry of tenants. Now, back to limbo only because I was decent and honest and didn't walk away from my debt like so many others did.

Fcuk you very much anybody who was involved in this decision. I hope you sit on something sharp and sandpapery so you might have an inkling of how badly ridden I feel right now.

TrishSimon

by the seaside wrote: »

Are you both FTBs?

If so your minimum deposit has just gone up from 23k to 24k. Don't despair.

No I am a non FTB, husband is a FTB as I purchased a property in 2009 6 months after I met my husband via the affordable housing scheme so its a one bed in D24 not a huge mortgage and the rent from it covers the cost of mortgage so I am not profiting from it which doesn't bother me as I never planned on it being an investment but I never planned on renting for 2.5 years either but we did and saved the 10% deposit but with new rules we will fall into the higher bracket as he is now classed as a non FTB as he is married to me unfortunately. We did start the mortgage process before xmas but were told to save a few more quid by AIB that is what we were doing but now these new plans have changed everything.
Calculations on a 230K house we now need € 50,476.00 which nearly makes me laugh its so ridiculous and I know I am never going to be able to save that amount so as someone else said I hope I win the lotto !!

TrishSimon

RoboRat wrote: »

Yup, thats how I feel today.... thoroughly beaten down. There was finally light at the end of the 7 year tunnel. I could finally cut free from a house I couldn't live in and buy something and settle down with my family without the constant worry of tenants. Now, back to limbo only because I was decent and honest and didn't walk away from my debt like so many others did.

Fcuk you very much anybody who was involved in this decision. I hope you sit on something sharp and sandpapery so you might have an inkling of how badly ridden I feel right now.

lol...think that is what we are all thinking well except the people who have the 20% deposit.

whodafunk

Does this apply to people in negative equity?

johnp001

Michael D Not Higgins wrote: »

Do they? I have only seen regulation of a percentage of loans being above or below the limit, no circumscription against 90% LTV.

Edit: I've read the press release again, there's no prohibition on 90+% LTV apart from the 15% limit.

Central Bank wrote:

PDH mortgages for non-first time buyers are subject to a limit of 80 per cent LTV.
For first time buyers of properties valued up to €220,000, a maximum LTV of 90 per cent will apply.
BTL mortgages are subject to a limit of 70 per cent LTV.

If FTB are 90%, non-FTB are 80% and BTL are 70% who is entitled to >90%?

flogen

The Spider wrote: »

I think you'll find that people would rather have the asset rented out paying for itself than crystallising the debt, and finding that they then have to pay the remaining outstanding debt, when they could have had a tenant paying it.

Of course - but you're making a few presumptions there. Firstly you presume this is an option to all of those in negative equity who need to move to a new property. Secondly you presume circumstances won't change - like the rental yield falling below the repayments in a few years.

My point is that there now may be less incentive for people to wait for prices to recover before selling than there was in the past.

Yes, people are not going to sell at a loss if they can help it, but those that have less of a choice won't be able to justify hanging on for a few months or years to get a better deal.

TrishSimon

whodafunk wrote: »

Does this apply to people in negative equity?

http://www.irishtimes.com/business/economy/what-will-the-new-central-bank-mortgage-regime-mean-to-you-1.2082519

Here is the link its explains about negative equity.

seamus

Trish, FTB status for the purposes of these regulation refers to whether or not the individual has had a mortgage before.

If your husband's name isn't on your current mortgage, then he could apply in his own name for the new one to get the FTB status applied.

whodafunk

I think this rule is very harsh to people trying to save so hard to get together money for a deposit which I understand year on year is getting more and more difficult (paying more taxes and taking into account too the current DIRT rate on savings).

It wasnt so long ago banks were giving away 100% mortgages!

Rasmus

Is a first time buyer considered anyone who has ever owned property, or someone who does not have to sell a house in order to buy the next one? For example, if someone owned a house in the 80s and sold it to move abroad, are they considered a FTB now?

gaius c

_Kaiser_ wrote: »

Apartments + kids = not ideal

In Europe maybe but not in our modern shoebox, poorly built, post-Celtic tiger era. I certainly wouldn't be taking on a few hundred grand's worth of debt for an apartment

You don't have to buy them but they are perfect for young singles and couples without kids to rent. That means less young wans and lads house sharing & competing with families for limited family house stock.

crisco10

johnp001 wrote: »

If FTB are 90%, non-FTB are 80% and BTL are 70% who is entitled to >90%?

the 15% or 20% of the loan book where the bank can operate outside these guidelines..

CarpeDiem85

Do the government have any schemes to help first time buyers get on the property ladder?

RoboRat

TrishSimon wrote: »

lol...think that is what we are all thinking well except the people who have the 20% deposit.

Saving the 10% was hard enough, I have to rent out for less than the repayments so therefore I am subsidising to the tune of €300 per month. I could look for more but I have a lovely couple in there who couldn't afford to pay more, so I would end up in turn contribute to pushing up rental prices.

I have to rent myself so on top of subsiding the mortgage and paying rent myself, I now have to save an additional 10% and I have children to boot so I also have to pay childcare. It will probably taker another 3 - 4 years to get the extra money, by which time the prices will probably have increased and or they will have made more changes to the terms to ultimately freeze me out.

If any FF/ FG / Lab Td's call to my door any time soon they better be able to run very fast.

seamus

Rasmus wrote: »

Is a first time buyer considered anyone who has ever owned property, or someone who is selling a house in order to buy the next one? For example, if someone owned a house in the 80s and sold it to move abroad, are they considered a FTB now?

What is the definition of a first-time buyer (FTB)?
A first time buyer is defined as a borrower to whom no housing loan has ever before been advanced.
Where the borrower under a housing loan is more than one person and one or more of those
persons has previously been advanced a housing loan, none of those persons is a first-time buyer

.

Michael D Not Higgins

johnp001 wrote: »

If FTB are 90%, non-FTB are 80% and BTL are 70% who is entitled to >90%?

There is scope for lending above the limits, outlined in the proposals. These haven't changed.

gaius c

handlemaster wrote: »

will sellers in dublin now not be tempted to push their asking prices towards 220 particularly for property tgat was around 150 k etc... thoses who are pushed out from buying above 220k pulling prices up. i think the new rules are good should help came down.

Excellent point and it may well happen.

RoboRat

If your husband's name isn't on your current mortgage, then he could apply in his own name for the new one to get the FTB status applied.

Can anyone clarify if this is true? I bought my house by myself and my name is only on the application as we were not together when I purchased. Could my wife apply and we get the 10% FTB rate?

TrishSimon

seamus wrote: »

Trish, FTB status for the purposes of these regulation refers to whether or not the individual has had a mortgage before.

If your husband's name isn't on your current mortgage, then he could apply in his own name for the new one to get the FTB status applied.

His name is not on my mortgage its all under my name and I have only ever paid the mortgage from my money and my bank account as its only small € 601.88 pm in fact but seen as he is married to me he is now classed as a non FTB also if he applied on his own he would only get € 115K as his salary is approx 33K which is not enough to buy a house.
We are stuck really, we were living in my apt together from June 2010 to July 2012 we were forced to move because of noise from a nearby pub / restaurant we didnt want to move but had to cause we could not get any sleep and had no quality of life so we rented out and then rented ourselves, the pub has since closed but we have a tenant in there now who is great if I'm honest and looks after the place really well and we have animals so the one bed apt would just not be suitable for us now.

We had all these plans to buy this year but now thats not the case because we are looking at needing € 50,476 !