Shared Ownership to Mortgage to Rent Scheme with DCC

carlandlenny

Hello,

I did a search and found some older and dead similar topics. But I really need help with this so I hope this is not considered a duplicate topic.

Back in 2007 I bought a property for 270k on a shared ownership mortgage with DCC. Due to the recession and other reasons my income has been reduced to about 25% if what I had back then, I have been on interest only for the last 3 years.

I’ve been called in to see the DCC and that want me to do the Mortgage to Rent Scheme (cannot post link as new here, but easilly found with a search) , I have been approved and am about 6/8 weeks away from it being completed.

So basically they will “buy back” my property and I’ll rent it from them as a council tenant. The rent will be very inexpensive and I’ll be easily be able to afford it, and no more sleepless nights trying to make repayments. That’s the upside.

Downside is that A) I will never own the property, the approx 95k I’ve spent so far on repayments (over 70k) and the original deposit are now totally wasted.

In addition, because I’ve been on interest only so long, and due to the fact it’s 50/50 mortgage/rent, I’ve only paid off a few grand off the 250k I borrowed. So, taking that and the current value of my property, I will still owe them about 120-130k (ok granted they ask for very small amounts back per month and writer off the balance in 15 years) so if in 5 years time things improve I’ll still be trapped into this situation.

I asked them if there were other options, got a very definite no.

I also asked them how come my rent part actually has gone up very year even though the property value is < 50% of what I paid. Is there any way I could get them to write down some of the debt, or somehow restructure it where I pay an affordable amount and the current value is taken into account, plus the fact I’ve already paid them over 70k?

I really don’t want to hand over my home, having already spend 95k, and be in debt for 120-130k

Thank you.

ted1

carlandlenny wrote: »

Hello,

I did a search and found some older and dead similar topics. But I really need help with this so I hope this is not considered a duplicate topic.

Back in 2007 I bought a property for 270k on a shared ownership mortgage with DCC. Due to the recession and other reasons my income has been reduced to about 25% if what I had back then, I have been on interest only for the last 3 years.

I’ve been called in to see the DCC and that want me to do the Mortgage to Rent Scheme (cannot post link as new here, but easilly found with a search) , I have been approved and am about 6/8 weeks away from it being completed.

So basically they will “buy back” my property and I’ll rent it from them as a council tenant. The rent will be very inexpensive and I’ll be easily be able to afford it, and no more sleepless nights trying to make repayments. That’s the upside.

Downside is that A) I will never own the property, the approx 95k I’ve spent so far on repayments (over 70k) and the original deposit are now totally wasted.

In addition, because I’ve been on interest only so long, and due to the fact it’s 50/50 mortgage/rent, I’ve only paid off a few grand off the 250k I borrowed. So, taking that and the current value of my property, I will still owe them about 120-130k (ok granted they ask for very small amounts back per month and writer off the balance in 15 years) so if in 5 years time things improve I’ll still be trapped into this situation.

I asked them if there were other options, got a very definite no.

I also asked them how come my rent part actually has gone up very year even though the property value is < 50% of what I paid. Is there any way I could get them to write down some of the debt, or somehow restructure it where I pay an affordable amount and the current value is taken into account, plus the fact I’ve already paid them over 70k?

I really don’t want to hand over my home, having already spend 95k, and be in debt for 120-130k

Thank you.

In 8 years you have spent 90k.
If you wre renting you would have paid say 1200 a month which works out at about 115,000,

So you put the 90k down as getting cheap rent for 8 years

Tinkerbell4484

Hi,just completed the mortgage to rent scheme,also had a shared ownership, all in all we found the process very long, about 18 months altogether.
For us,it wasn't an option,we had to go for it. We are paying rentwhich is based on on our income,and we pay a differential rent,which is 25% off our rent per week back on our arrears which will be over 15years( so say our rent per week is €60,25% off €60=€15 so total rent per week is €75)
We had to move house,as our property didn't suit our needs so That maybe is what made our process longer

The_Conductor

carlandlenny wrote: »

Hello,

I did a search and found some older and dead similar topics. But I really need help with this so I hope this is not considered a duplicate topic.

Back in 2007 I bought a property for 270k on a shared ownership mortgage with DCC.

Unfortunately- you most probably bought at the very peak.

carlandlenny wrote: »

Due to the recession and other reasons my income has been reduced to about 25% if what I had back then, I have been on interest only for the last 3 years.

Aka- you haven't touched the principal in over 3 years- and your circumstances are such that you're on a quarter your income when you entered into this arrangement.

carlandlenny wrote: »

I’ve been called in to see the DCC and that want me to do the Mortgage to Rent Scheme (cannot post link as new here, but easilly found with a search) , I have been approved and am about 6/8 weeks away from it being completed.

It seems that they are acknowledging your straightened circumstances and are proactively stepping in to help.

carlandlenny wrote: »

So basically they will “buy back” my property and I’ll rent it from them as a council tenant. The rent will be very inexpensive and I’ll be easily be able to afford it, and no more sleepless nights trying to make repayments. That’s the upside.

Its a damn good upside.

carlandlenny wrote: »

Downside is that A) I will never own the property, the approx 95k I’ve spent so far on repayments (over 70k) and the original deposit are now totally wasted.

The original deposit and the repayments you've made- are significantly less that the gross rent you'd have had to pay were you renting privately. Ok- you won't own the property down the road- but killing yourself to own a property that you can't afford- really doesn't make any sense.

carlandlenny wrote: »

In addition, because I’ve been on interest only so long, and due to the fact it’s 50/50 mortgage/rent, I’ve only paid off a few grand off the 250k I borrowed. So, taking that and the current value of my property, I will still owe them about 120-130k (ok granted they ask for very small amounts back per month and writer off the balance in 15 years) so if in 5 years time things improve I’ll still be trapped into this situation.

I asked them if there were other options, got a very definite no.

If your circumstances improve dramatically in a few years- you could ask to make a lumpsum payment against the o/s mortgage amount. However- if its going to be written off in 15 years with minimal of fuss- and you'll have low levels of council rent to pay in the interim- they really are giving you an opportunity. Given, the opportunity does not include you owning the property at the end of the road- but it does clear the debt in as painless a manner- and leave you a free agent with no debts in 15 years time.

carlandlenny wrote: »

I also asked them how come my rent part actually has gone up very year even though the property value is < 50% of what I paid. Is there any way I could get them to write down some of the debt, or somehow restructure it where I pay an affordable amount and the current value is taken into account, plus the fact I’ve already paid them over 70k?

The rent part is partly determined by prevailing open market rents for comparable property in the area- and is not related solely to the value of the property.

carlandlenny wrote: »

I really don’t want to hand over my home, having already spend 95k, and be in debt for 120-130k

Thank you.

Would you rather the alternate- that you're sitting there without tuppence to rub off one another in penury for the next 40 years (or however long- keeping in mind, you're on interest only at the moment).

You have to live too. Owning a property is not for everyone. There is no shame in renting.

Desmonddoyle

You got good, actually great value for your 95k i.e cheap rent. You are looking at the situation all wrong if you don't think you have been a 'get out of jail free' card here.
Have no idea how someone who is skint feels they should be able to own a property they clearly can't afford. You have been very fortunate if you can get out of that level of debt and still get to stay in your house with cheap rent.

It's always a risk when you take out a loan, and a massive risk when you take out a massive loan like a mortgage. Things went pear, you got lucky - grab it and move on with your life.

carlandlenny

Thank you all for your replies (especially The_Conductor), and I do take on board and understand your views.

I just re-read my post and it seems I did not clearly ask a specific question.

Do I have any other options that I've overlooked, eith with the DCC, or some other means?