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100% Mortgage Anyone
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13-07-2005 2:51pm#1
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First Active offers 100% to first-time buyers
July 13, 2005 12:54
First Active is to offer first-time buyers a mortgage covering 100% of the value of a home.
The bank says that, based on a 92% mortgage, a first-time buyer would be left €20,000 short of the purchase price for a home valued at €245,000.
First Active's head of marketing Brendan O'Hora said many first-time buyers could afford to repay a mortgage on the full value of their home, but were unable to get a 100% mortgage.
First Active says customers may initially be required to fund items such as a booking fee or a deposit. But, on closing the sale, the mortgage cheque drawn down will cover 100% of the value of a home.
The lender says the 100% mortgage will be available across its suite of mortgage products.
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Not sure if that really is a good idea. Does that not just increase the house prices in the end meaning less people can afford houses? I'd like for the US fixed interst rates work. You borrow at one rate and that's it a better rate comes along you refinance and then have the new rate and you can stick with it. So if there is a low rate during you mortgage life you can get it and then stay with it.
Imagine never worring about intrest rates. THis would benifit all instead of causing more problem. 0 -
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jhegarty wrote:don't forget , its not just spend 2 years saving €20k , but its two years saving €20 while paying rent (which is someone elses mortgage)
Actually rent is payment for a service it doesn't really mater what your landlord does with the money he gets from the risk he is taking.
Where did 2 years come into it?
I think more radical approach to housing needs to be made. The government seem to be parralised between the current homeowners, FTB and the building industry. The FTB are the easiest to ignore because they don't use/have political sway. You need something that doesn't devalue current owners, promotes building and provide affordable housing to FTB. I think the best way is to give incentives to retired people to move out to purpose built intergrated communities. This will get the property stock moving about and hopefully better utalised. THere are a lot of largish 3-5 bed houses near me with only 1 and 2 people living in them. A lot of these people could do with a cash bonus for pensions. The incentives could include a policy to sell to FTB or if too expensive a FTB has to be in the chain.
I really think this a plan that should be considered but I don't know how to get TDs behind it.0 -
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BEcause if you devalue property prices nobody wins. People won't sell property, trade or built it. IN other words there would be no where for FTB to buy. A price crash does not help anybody except the rich who can afford to buy the cheap property. If you think FTB will be able to swoop in and get all the bargins I think it is unlikely. THe banks won't give them the money if they find a property and people will be too scared to buy. THe collapse of the property market will never be a good think and would have devastating results on all walks of life. Most importantly in the governments eyes the people it would effect the most have a lot of political power.Imposter wrote:Why? If something is overpriced why should we try to keep it that way?
The view that property is overpriced is also quite relative. There is a lack of housing so supply is out striped by demand that means they aren't over priced in economic terms. Somepeople have been saying there is property bubble for the last 7-10 years. SO if there is a price drop where do you think it will go back 10 years, just 1?Imposter wrote:That makes no sense. First time buyers, i would imagine, predominantly don't have families (yet). They don't need a 3-5 bed place either. PLus moving people out of their communities is never a good plan imo.
What we are currently getting is a donnut effect where older areas are literally dying off. THere are no children for the schools or other services so they are closing down while further out there are no schools. FTB might not all actually have children but they are more likely than a retired couple
The houses that are too big etc... would need to have a FTB involved in a chain to get incentive (making FTB a sought after commodity) . Currently people who want to upsize ca't due to tha lack of housing stock and price by inclusing a FTB in the deal they get the smaller house. THe concern of the communities is a valid point but the idea is that the newly built houses are intergrated communities where there is housing for elderly to young alike to increase community bonds. THe older areas will also get a mix as not all would take the incentive deal. THere would have to be a few rules to prevent abuse and make sure the desired effect happens but the ideas is to use services currently there and create services that we will need in the future.The whole of Ireland is getting older we need retirement facilities to be built
The current housing stock is under used we need to change that along with building new houses0 -
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This is turning into a more interesting thread than I thought it might.
Re: the '50foot pole' comment of mine who precisely wrote the rule that stated you must purchase where you live?? There is plenty of rental property available with the various advantages that brings (yes advantages, people get too excited in this country with the notion they are 'paying someone elses mortgage')
I know of no-one in the last few years who has managed to buy either on their own or without some form of fraud involved (that includeds raising your deposit through the credit union since the bank won't know).
For what it's worth I bought a house 6 years ago which had already almost doubled in value the previous 18 months. I was convinced I'd missed the boom but really liked both the property and the location (seemingly irrelivant factors today) so went ahead with it. It's tripled in value since and I've just sold. I'm renting now and forsee renting for a few years until buying again or emmigrating. I'm very relieved to be out with a profit.
I'll happily go into more detail later but the simple fact is far too many things have to go just right for the market here to continue rising; interest rates, economy (which itself relies on construction), ftbs, net inflow of migrants, world economy etc. etc... Just one problem and the whole deck of cards can come down.
I laugh at the notion that ftb would save a falling property market since houses would become more affordable :rolleyes: , think about it for a minute. You're a ftb, the house you want but couldn't afford at 300k came down in the first 3 months of the year to 280k, 3 months later its 265k, 4 or 5 months later you're told they will take 255k. Would you buy the now 'affordable' house or wait and see how much more it comes down? A falling market falls for a long time because everyone plays the waiting game, look at Japan for an example.
I'm already seeing anecdotale evidence of the above happening, with a friend in Donabate getting 275k for selling his house when next door sold for 285k last year. I'm also hearing complaints from people that their apartment/starter home 'hasn't gone up in value since last year'. As far as I'm concerned the fall is already on our doorstep and measures like 100% mortgages for ftb and no stamp-duty for ftb on second-hand homes are attempting to hold off the inevitable.
But like every market there's always plenty of suckers left until the very end. Don't be one of them.0 -
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