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New mortgage rules will they change for 2016 and going forward??

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    #122
    April 73
    Registered Users Posts: 846 ✭✭✭April 73


    Is a year long enough in a dysfunctional market to really measure the impact of these rules?


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    #123
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    April 73 wrote: »
    Is a year long enough in a dysfunctional market to really measure the impact of these rules?

    No since we have anecdotal reports of people here waiting for the new year to get the benefit of the exemptions. People's attitudes haven't changed yet. They're still willing to get 5 times their income to outbid someone else with 5 times their income, without seeing the futility in the effort.


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    #124
    Cuddlesworth
    Registered Users Posts: 13,995 ✭✭✭✭Cuddlesworth


    brownbeard wrote: »
    Rules to be "Reviewed" in summer.
    http://www.irishtimes.com/business/economy/central-bank-to-review-mortgage-rules-says-governor-1.2488855
    "He stressed, however, that the rules could be tightened or loosened in either direction."

    I could see them re-assessing the exemptions, I worry that they might turn the housing market into a mess like the care market where the majority of sales are at the start of the year.


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    #125
    L1011
    Registered Users Posts: 68,910 ✭✭✭✭L1011


    Michael D Not Higgins wrote: »
    No since we have anecdotal reports of people here waiting for the new year to get the benefit of the exemptions.

    I've a feeling that if the system stays unchanged for a few years, we're going to get a statistically significant case of sales bunching towards the first half, and price rises being solely constrained to the first quarter.


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    #126
    jjwada
    Registered Users Posts: 26 ✭jjwada


    I think it will change, given the noise about it.
    No good for me though. Im out of the market til after the next crash :)


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    #127
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Or they might not change them at all.
    It's just the IT making a big deal out of what is really just an annual checkup.


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    #128
    SarahMollie
    Closed Accounts Posts: 2,843 ✭✭✭SarahMollie


    Unearthly wrote: »
    I got an exception approved in the 3.5 salary rule. The basis was that I had such a large amount of savings the ltv would be 63% and that I demonstrated over a 6 month period I could save the mortgage amount repayments

    I got 4.5 times my salary

    I got 4.1 times my salary but as with the above poster, I had a large lump sum and my LTV was in the region of 60%.

    I possibly could have gotten more, but thats just what I wanted to borrow.


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    #129
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Oh and
    The controversial Central Bank mortgage rules
    Hellllooooo agenda central!


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    #130
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    lbyrne121 wrote: »
    I was wondering if someone could give me advice if they were in the same poisiton as myself..
    I am looking to get a second mortgage of 240K. I have an apartment which is far too small, (mortgage 195K) approx 90K in negative equity. I currently rent out the property and covers the mortgage repayments, i dont want to sell the apartment. Myself and my fiance are on 40K per annum and have 100K in savings.. We save 2600 per month but could up this if needed.... No loans, no credit debt etc.

    My question is what would the chances be to get a second mortgage? Would a bank even look at us? Or would my fiance be better going by himself before we get married?

    I would appreciate any advice..

    Do you have a tracker or STV?


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    #131
    lbyrne121
    Registered Users Posts: 206 ✭✭lbyrne121


    gaius c wrote: »
    Do you have a tracker or STV?


    I have a tracker mortgage


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    #132
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Full interview here.
    http://www.centralbank.ie/press-area/speeches/Pages/TranscriptofInterviewwithGovernorPhilipLaneandtheIrishTimeson5January2016.aspx
    Very enlightening. He's basically saying very little and is extremely careful about his wording.
    I like him already.


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    #133
    SarahMollie
    Closed Accounts Posts: 2,843 ✭✭✭SarahMollie


    lbyrne121 wrote: »
    I was wondering if someone could give me advice if they were in the same poisiton as myself..
    I am looking to get a second mortgage of 240K. I have an apartment which is far too small, (mortgage 195K) approx 90K in negative equity. I currently rent out the property and covers the mortgage repayments, i dont want to sell the apartment. Myself and my fiance are on 40K per annum and have 100K in savings.. We save 2600 per month but could up this if needed.... No loans, no credit debt etc.

    My question is what would the chances be to get a second mortgage? Would a bank even look at us? Or would my fiance be better going by himself before we get married?

    I would appreciate any advice..

    Do you mind me asking where your apartment is? to still only be worth a little over half of what you paid seems pretty poor considering the market has bounced back considerably in most areas.

    If its still that deeply in negative equity, its likely that it will never (or at least not for a very long time) be worth what you owe on it, and if i was a lender, that would concern me.


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    #134
    lbyrne121
    Registered Users Posts: 206 ✭✭lbyrne121


    SarahMollie wrote: »
    Do you mind me asking where your apartment is? to still only be worth a little over half of what you paid seems pretty poor considering the market has bounced back considerably in most areas.

    If its still that deeply in negative equity, its likely that it will never (or at least not for a very long time) be worth what you owe on it, and if i was a lender, that would concern me.

    It is in Louth and a 2 bed room apartment.. it is in a well sought after estate and location.. The apartment was 250K, but I had a deposit of 45K and took a mortgage out for 205K paid that off it is approx 190-195K left on the mortgage now and they are going for approx 90-100K... I believe that in time it will improve and they will go for more money but currently not in the louth area..


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    #135
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    lbyrne121 wrote: »
    It is in Louth and a 2 bed room apartment.. it is in a well sought after estate and location.. The apartment was 250K, but I had a deposit of 45K and took a mortgage out for 205K paid that off it is approx 190-195K left on the mortgage now and they are going for approx 90-100K... I believe that in time it will improve and they will go for more money but currently not in the louth area..

    When did you buy? If it's worth less than half what you bought it for then I'm assuming at the top of the market in 07/08, which means it's about 8 years since you bought and you've only taken 10 grand off the principal but you've saved 100 grand? Are you one of these strategic non-payers we hear about in the news?


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    #136
    Black_Knight
    Moderators Posts: 12,375 ✭✭✭✭Black_Knight


    With 6 month mortgage approvals, surely the affects of the new rules only really started to hit house prices towards the middle of 2015.

    The 3.5 rule is probably limiting ourselves more than the 10+20% deposit. Though that rule will probably help normalise house prices in areas based on peoples earnings in those areas. Dublin wages used to define Dublin prices, and Limerick wages used to define Limerick house prices.


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    #137
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    Do you mind me asking where in Louth? I'm currently looking for an apartment in various parts of Meath / Louth.


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    #138
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    lbyrne121 wrote: »
    I have a tracker mortgage

    Urgh. That's both good and bad. With an STV, you've no reason to hold onto the place.
    Your problem is that you basically only have 10k equity to your name.

    Ask the bank will they do a deal with you on offloading the apartment in return for taking the tracker off their hands?

    Also, have you looked up negative equity mortgages?
    https://personalbanking.bankofireland.com/borrow/mortgages/information/Negative-Equity/


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    #139
    worded
    Registered Users Posts: 4,579 ✭✭✭worded


    I heard that's banks no longer accept a € gift from family being part of a deposit. They used to but that has changed


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    #140
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    worded wrote: »
    I heard that's banks no longer accept a € gift from family being part of a deposit. They used to but that has changed

    The wording is ambiguous. If you're scraping 10% and half of that is from your parents, you're not going to be at the top of the pile when it comes to exemptions.

    But if you have 20% of your own saved and parents chip in with another 5%, you can of course use that as part of your deposit.


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    #141
    lbyrne121
    Registered Users Posts: 206 ✭✭lbyrne121


    Michael D Not Higgins wrote: »
    When did you buy? If it's worth less than half what you bought it for then I'm assuming at the top of the market in 07/08, which means it's about 8 years since you bought and you've only taken 10 grand off the principal but you've saved 100 grand? Are you one of these strategic non-payers we hear about in the news?

    I dont know what you mean by strategic non-payers? I pay what my mortgage repayments are each month, as i dont live in the property i dont pay more towards the mortgage and just pay what the repayments are.. I bought in 2008 and then had the holiday period while the property was getting fitted for kitchens etc.. so i started paying mortgage in 2009. The mortgage was 209K and the last time i seen the breakdown of what was left it was 195K but that was last year when they send out the annual report.. so it will obviously be less than 195K

    I save 100K as i was saving long before i bought the apartment and bare in mind the aparment was 250K and I paid 41K off it myself.. I have been saving since i was 18, I am now 32...

    The property is in Dundalk...


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    #142
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Okay if I'm generous in my calculations, let's say it was 6 years of repayment for 14k off the principal, it would need to be around 5.5% interest on average (sounds more like variable than tracker rate) and a term of 35 years. It doesn't look right, and the amount of negative equity is unlikely to inspire confidence in any bank's underwriters.

    Louth's average prices have raised 13% last year (daft.ie report). If your apartment is not rebounding, then it's unlikely to get into positive equity soon. That's not going to give the underwriters confidence to lend you another 100k+.


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    #143
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    worded wrote: »
    I heard that's banks no longer accept a € gift from family being part of a deposit. They used to but that has changed
    Well of course they do, you don't give the deposit to the bank. So it doesn't matter where the 20% deposit came from provided that you have it.

    However in assessing affordability your deposit will be basically useless unless you've saved it up yourself. That is, the bank won't consider cash gifts as part of your income. Even if you have a 50% deposit, if you can't afford the repayments on the other 50% mortgage, you won't get it.

    In the bad old days they used to be a lot more flexible about it and made a lot more assumptions.


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    #144
    Alkers
    Registered Users Posts: 6,834 ✭✭✭Alkers


    I think the 3.5*salary is restricting a lot of people in Dublin but this can only be good and prices will have to start to fall in line over time. I can see the re-visit reducing the 20% deposit requirement for people who already own a house but not much more.


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    #145
    newcar2016
    Closed Accounts Posts: 96 ✭✭newcar2016


    Simona1986 wrote: »
    I think the 3.5*salary is restricting a lot of people in Dublin but this can only be good and prices will have to start to fall in line over time. I can see the re-visit reducing the 20% deposit requirement for people who already own a house but not much more.

    Aren't investors piling in due to attractive rental returns therefore prices will be propped up?


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    #146
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    Simona1986 wrote: »
    I think the 3.5*salary is restricting a lot of people in Dublin but this can only be good and prices will have to start to fall in line over time. I can see the re-visit reducing the 20% deposit requirement for people who already own a house but not much more.

    The problem is as prices come down, less people who were affected by the downturn will get into positive equity and thus not be able to sell, thus reducing stock levels.

    Maybe supply and demand will push these prices up again though.

    So much to consider.


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    #147
    SarahMollie
    Closed Accounts Posts: 2,843 ✭✭✭SarahMollie


    lbyrne121 wrote: »
    It is in Louth and a 2 bed room apartment.. it is in a well sought after estate and location.. The apartment was 250K, but I had a deposit of 45K and took a mortgage out for 205K paid that off it is approx 190-195K left on the mortgage now and they are going for approx 90-100K... I believe that in time it will improve and they will go for more money but currently not in the louth area..

    Wow thats quite a hit - for it now to only be worth 40% of what you paid even after a decent recovery in the market. How much value must it have lost at the bottom of the market?

    My understanding is that most homes lost 50-60% off 2007ish prices, but have rebounded by about half of that deficit.

    I hate to say something so negative, but your apartment seems to be so behind the curve, that I'm not sure I can ever see it rebounding, even in nominal terms, let alone in real terms.

    I can't imagine how the banks wouldn't look on this as a problem.

    Although, you're best off talking to them/broker as there is a limit to the advice you can get on Boards!


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    #148
    SarahMollie
    Closed Accounts Posts: 2,843 ✭✭✭SarahMollie


    newcar2016 wrote: »
    Aren't investors piling in due to attractive rental returns therefore prices will be propped up?

    I think thats already happened, back in 2010-2012 approx. No CGT combined with rock bottom prices attracted small and large investers alike. You saw big property multinationals coming in and buying entire developments from nama and achieving strong rents.

    However the buying costs are now higher, the CGT relief is now gone, and taxes on rental income are quite prohibitive.


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    #149
    REFLINE1
    Registered Users Posts: 396 ✭✭REFLINE1


    seamus wrote: »
    Well of course they do, you don't give the deposit to the bank. So it doesn't matter where the 20% deposit came from provided that you have it.

    However in assessing affordability your deposit will be basically useless unless you've saved it up yourself. That is, the bank won't consider cash gifts as part of your income. Even if you have a 50% deposit, if you can't afford the repayments on the other 50% mortgage, you won't get it.

    In the bad old days they used to be a lot more flexible about it and made a lot more assumptions.

    that doesn't make sense. Surely if youre saving for example 1200/month, have 30k saved over time with regular saving and were gifted 20K, then clearly you have demonstrated the ability to save on top of your outgoings and that would be credited in any assessment of affordability?


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    #150
    SarahMollie
    Closed Accounts Posts: 2,843 ✭✭✭SarahMollie


    REFLINE1 wrote: »
    that doesn't make sense. Surely if youre saving for example 1200/month, have 30k saved over time with regular saving and were gifted 20K, then clearly you have demonstrated the ability to save on top of your outgoings and that would be credited in any assessment of affordability?

    I'm sure that would be fine, I think the point people are making is that if your entire deposit is Gift then it doesn't demonstrate anything about your own financial management skills, just that you're parents have some spare cash.


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    #151
    REFLINE1
    Registered Users Posts: 396 ✭✭REFLINE1


    SarahMollie wrote: »
    I'm sure that would be fine, I think the point people are making is that if your entire deposit is Gift then it doesn't demonstrate anything about your own financial management skills, just that you're parents have some spare cash.

    i understand that but the post i quoted stated "even if you have half the deposit..", i read that to mean, even if you have half saved ...


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