How does the bank lending rules help the working class?

Rock77

ELM327 wrote: »

Ah bip off :D




If everyone gets an exemption then everyone can pay more and then, rocket science, prices go up.
Hello, 2006 called!

I wasn’t suggesting everyone should get an exemption.. and I have stated numerous times on this thread that I now know there is no quick fix here, the issue is not the loan to income rule.....

ELM327

Rock77 wrote: »

I wasn’t suggesting everyone should get an exemption.. and I have stated numerous times on this thread that I now know there is no quick fix here, the issue is not the loan to income rule.....

But the only solutions are either earn more or change the LTI rules.
I'm not in favor of changing the LTI as it's working.

Eric Cartman

ELM327 wrote: »

But the only solutions are either earn more or change the LTI rules.
I'm not in favor of changing the LTI as it's working.

Im amazed at how many people are though. There are people on this forum regularly begging to get into a debt too large for them. Theres a lot that could and should be tackled but that central bank cap is the greatest piece of financial regulation that we have implemented in my lifetime and I hope it holds rock solid.

Salary Negotiator

Eric Cartman wrote: »

Im amazed at how many people are though. There are people on this forum regularly begging to get into a debt too large for them. Theres a lot that could and should be tackled but that central bank cap is the greatest piece of financial regulation that we have implemented in my lifetime and I hope it holds rock solid.

Me too, it’s bizarre. I borrowed 3.5 times my salary, so the max that I could borrow, but if the rules were relaxed and all other things being equal I’d probably have had to borrow more money to buy the same house.

I’d now be paying more each month to live in the exact same house, good for the banks not so good for me.

Rock77

ELM327 wrote: »

But the only solutions are either earn more or change the LTI rules.
I'm not in favor of changing the LTI as it's working.

Doesn’t matter if the LTI is changed though, as many people here have told me, if the LTI is changed then everybody can afford to borrow more so the house I want gets the price pushed up and I still can’t afford it. So it’s not a solution..

ELM327

Rock77 wrote: »

Doesn’t matter if the LTI is changed though, as many people here have told me, if the LTI is changed then everybody can afford to borrow more so the house I want gets the price pushed up and I still can’t afford it. So it’s not a solution..

So... that just leaves...

TheBoyConor

Op is more typical modern day sense of entitlement claptrap.

Never before have people been able to buy houses in th area they came from with ease, it was usually through good fortune or inheritance. A very large percentage of people for many many generations went and emigrated when they could not get a reasonable life here and they came back when they had their money made abroad. And they didn't have cars or anything like that while here.
Yet the irish today seem to think that they are entitled to it all straight off and that they should not have to emigrate and work in England or America.
OP talks about having 2 cars and jobs and all these other things he has and then implies that he is somehow disadvantaged or marginalised...… OP is actually living an extremely privileged existence here in Ireland and he doesn't even realise it.

Rock77

ELM327 wrote: »

So... that just leaves...

How many times would you like me to say it, I now realise the LTI rule is not the only issue. I stated this long before today. Some people here educated me on the subject days ago.

So you are wrong, changing the LTI rule is not a solution.

So we are back to; only people that earn well over the average wage can afford to buy a 3 bed semi. That’s a lot of people on decent wages very capable of paying back a mortgage unable to access the credit required.

I do not accept that a couple that pays 2k per month rent and saves €500 per month cannot afford repayments of €1200 per month..

TheBoyConor

Another thig people don't realise is that the limits basically but a soft limit on property prices. If the limits were removed the property prices would skyrocket as credit became available to match any property price. And that too would put property beyond the reach of many people. So things basically stay the same with affordability. And property prices would spiral because of the availability of limitless credit available to people to buy houses. The whole thing would be a vicous cycle that would rapidly spiral out of control. Before you know it, it is 2008 again and banks are offering 120% mortgages and throwing in a car too to get people to take it out.

Eric Cartman

Rock77 wrote: »

How many times would you like me to say it, I now realise the LTI rule is not the only issue. I stated this long before today. Some people here educated me on the subject days ago.

So you are wrong, changing the LTI rule is not a solution.

So we are back to; only people that earn well over the average wage can afford to buy a 3 bed semi. That’s a lot of people on decent wages very capable of paying back a mortgage unable to access the credit required.

I do not accept that a couple that pays 2k per month rent and saves €500 per month cannot afford repayments of €1200 per month..

It was never an issue at all, its like you almost had it then reverted. The LTI thing is not an issue at all, it helps you, its the best thing to help you. So acknowledging it as your friend, the only two possible issues could be your income or the price of the house you want, solve from there

LuckyLloyd

I wouldn’t be overly harsh on the other side of the argument here. It’s hard for people to get beyond ‘monthly repayment for a mortgage at 5x my salary would be less than my monthly rent’. We also have a strange relationship with property in this country where we have it drilled in as accepted wisdom that negative equity doesn’t matter ‘if you intend to live in it for years’. Additionally, nobody ever plans for the possibility they might lose their job or have to change career or something else. Finally, our own Taoiseach was out in the media late last year lobbying for a relaxation of the lending limits.

So people are getting a lot of messaging from various places of authority telling them that borrowing multiples more than the central bank limits is a good idea. And it also seems intuitive to them that another 1x their salary would make a house they like attainable on repayments they can immediately afford.

Dylan94

Rock77 wrote: »

I do not accept that a couple that pays 2k per month rent and saves €500 per month cannot afford repayments of €1200 per month..

Of course they can afford repayments of €1200 per month, right now. But what if interest rates were to rise 3 percentage points and suddenly you are paying €1900. You then have all of the additional costs of home ownership that you don't have with renting such as repairs, insurance, furniture etc.

What if one of you becomes quite ill and so one of you becomes unemployed and can't afford to pay it.

If that happens in rented accommodation you have to move out and find something cheaper, if you have a mortgage it costs the bank money if you can't pay.

You might be able to afford it right now. But you don't know how things will play out over the next 35 years. The banks don't want to take that risk unless you can still afford to pay it if things go tits up

ELM327

Rock77 wrote: »

How many times would you like me to say it, I now realise the LTI rule is not the only issue. I stated this long before today. Some people here educated me on the subject days ago.

So you are wrong, changing the LTI rule is not a solution.

So we are back to; only people that earn well over the average wage can afford to buy a 3 bed semi. That’s a lot of people on decent wages very capable of paying back a mortgage unable to access the credit required.

I do not accept that a couple that pays 2k per month rent and saves €500 per month cannot afford repayments of €1200 per month..

You were so close. So so close.

beauf

Dylan94 wrote: »

...

You might be able to afford it right now. But you don't know how things will play out over the next 35 years. The banks don't want to take that risk unless you can still afford to pay it if things go tits up

That's always a risk even in good times.

runawaybishop

Rock77 wrote: »

How many times would you like me to say it, I now realise the LTI rule is not the only issue. I stated this long before today. Some people here educated me on the subject days ago.

So you are wrong, changing the LTI rule is not a solution.

So we are back to; only people that earn well over the average wage can afford to buy a 3 bed semi. That’s a lot of people on decent wages very capable of paying back a mortgage unable to access the credit required.

I do not accept that a couple that pays 2k per month rent and saves €500 per month cannot afford repayments of €1200 per month..

The whole thread is based on a flawed premise, that there are only 2 options. Obviously there are far more, earn more money or save a bigger deposit being the obvious two that spring to mind. A question could also be asked as to why a 3 bed house in the capital is required.

ELM327

runawaybishop wrote: »

The whole thread is based on a flawed premise, that there are only 2 options. Obviously there are far more, earn more money or save a bigger deposit being the obvious two that spring to mind. A question could also be asked as to why a 3 bed house in the capital is required.

That is the same option, more money.

runawaybishop

ELM327 wrote: »

That is the same option, more money.

They are not the same option, but thanks for trying to nitpick.

Dylan94

ELM327 wrote: »

That is the same option, more money.

Not really. One is to earn more money and so get a higher amount of credit from the bank. The other is stay on your same pay, but save a greater amount each month or for longer so that you will have more of your own money to pay upfront.

Rock77

ELM327 wrote: »

You were so close. So so close.

Thanks very much for your feedback, your constructive criticism and your advice. I hope you gained as much from our conversation as I did........