Affordable Housing, a practical alternative…

Affordable housing is a term commonly thought to have been synonymous with ‘social housing’. It is possible that this common misconception is partially responsible for many people not availing of the scheme. Affordable housing, a scheme first introduced in 1999, was designed to help first time buyers (FTBs) buy into private developments at less than the full market value of the property. Initially, land owned by local authorities was developed and the housing then sold on under the scheme. In 2000 and 2002, reforms were introduced under Part V of the Planning and Development Acts, which required that up to 20% of each new residential development must be set aside for social and affordable housing. However, developers often offer money in lieu or sites elsewhere instead of 20% of every development. This situation is less than ideal since building the houses themselves is costly and time consuming for local authorities and results in a backlog of people waiting for housing units to become available. There is also a lack of consistency between the various local authorities involved, with criteria …

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Consumer Spending Fuels the Economy

Recent speculation in relation to the immediate future of the Irish economy has been largely pessimistic in content. This is mainly due to falling house prices, increasing interest rates and a slowdown in the construction sector, a pending property crash is often cited as well. Despite this lack of confidence however, latest figures show that the future may be looking brighter for the economy and the housing market. Central Statistics Office figures show that in 2002, GDP growth reached a peak of 6.4%. 2006 by comparison showed GDP growth levels at a 6 year low of 5.7%. At this present time, 6% is a healthy level of growth to achieve.

It is well known that consumption has a strong, direct correlation with GDP, as aggregate consumption is a major determinant of economic output. Many feared that with the maturation of SSIA’s this year, spending would increase rapidly. This sudden injection was also expected to be followed by a sharp fall in growth levels and an increase in borrowing to finance spending. This theory was in keeping with US and …

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Why buy an Investment Property?

Capital Appreciation Potential Property has always been an excellent long term investment and although there are no guarantees to future gains currently prices are still rising and rental income is strong for quality units in good locations

Rental Income Monthly income which meets the mortgage repayment and also generates a new income for the Investor

Costs to consider

Stamp Duty Legal Fees Structural Survey Fit out costs Letting fees and Management fees (if an apartment) Insurances

Choosing a good Investment property Location is vital, is the property close to where tenants might work? Good transport links? Good area?

Is the property in a good state of repair? Tenants have high expectations and strong rental income will only be achieved with a high spec property!

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Ways to cope with raising rates…

There have been eight consecutive interest rate hikes and that is making loans, to say the least, very damn expensive! However, that doesn’t mean you have to sit back and take it. Mortgages, like all debt are affected by movements in the European Central Bank base rate which is now 4%. Two years ago the rate was half this amount so the interest portion of loans has doubled!

The good news is that Mortgage Interest Relief, or ‘Tax relief at source’ has also doubled for first time buyers since the last budget, and its up by 20% for non-first time buyers. An important note is that you are a first time buyer for the first seven years, if you sold your first house and moved into another one within the first seven years you still qualify as a first time buyer.

So how do you hedge yourself against rising rates? The simplest means of doing it are as follows:

Refinance to a better deal – this means moving your present loan to get one at a cheaper …

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Stagnation in the Irish Property and Mortgage Market

As I write this news has just flashed saying that the Dollar has weakened on the basis of new woes in the sub-prime market in the USA and the other stories of the day are of property melt-downs, negative equity and other doom and gloom forecasts.

Firstly I’d like to say that people have been predicting a property bust for at least (well… this is how long I’ve given them any degree of attention) the last 8 years. And now it seems that because property didn’t miraculously rise in value that all of these tales of woe are in fact true. I don’t support this attitude though for several reasons. Quite frankly the first reason being that our firm Irish Mortgage Brokers is as busy as ever and if we are doing more mortgages than this time last year then it shows me that the market has not entered free fall, however, this is of course a micro-attitude, on the reverse side there are houses that are not selling and rates that are getting higher.

I just want to say …

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Sub Prime Mortgages and Repossession property

Recent figures are showing that the number of repossessions in Ireland have doubled in the last five years, this means that more and more people are being forced out of their homes, a good deal of these are people that have a ‘sub-prime’ mortgage, this means that they received the mortgage from a lender who was aware of their past credit issues. This doesn’t take into account the number of people who will simply sell their home in order to avoid a reposession this is not a forced sale by the lender, however it would certainly be monetary pressures that inspire most people to opt for this choice.

Residential mortgages can be either ‘Prime’ i.e. the kind you walk into any mortgage broker or bank branch and apply for, or ‘Sub-Prime’ which are normally distributed direct by the Sub Prime lender or via an intermediary such as a mortgage broker who may be able to offer several of them and therefore compare and contrast them to the client. You’ll know them because typically the advertisements for it are along the …

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mortgages | irish mortgages and ECB interest rate rises

Mortgage Interest Rates have taken another hike up to a new base rate of 4% as of two weeks ago. This will mean that all mortgages on a variable rate and all mortgages on a tracker rate will now cost more per month than they did previously. The difference will be about €21 per hundred thousand borrowed.

Given that the average house price in dublin is now over four hundred thousand that equates to mortgages being – for first time buyers in particular who would not have a low loan to value – about €80 more per month.

This is the eighth interest rate rise since december of 2005 so mortgages are getting more expensive almost every quarter. For some people this is adding up to an extra €650 per month compared to what they were paying for their mortgage this time two years ago.

Mortgages, much like any other form of credit such as personal loans or credit cards are affected every time the ECB (european base rate) goes up or down. Property purchases were much more affordable when …

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mortgages | irish mortgages and ECB interest rate rises

Mortgage Interest Rates have taken another hike up to a new base rate of 4% as of two weeks ago. This will mean that all mortgages on a variable rate and all mortgages on a tracker rate will now cost more per month than they did previously. The difference will be about €21 per hundred thousand borrowed.

Given that the average house price in dublin is now over four hundred thousand that equates to mortgages being – for first time buyers in particular who would not have a low loan to value – about €80 more per month.

This is the eighth interest rate rise since december of 2005 so mortgages are getting more expensive almost every quarter. For some people this is adding up to an extra €650 per month compared to what they were paying for their mortgage this time two years ago.

Mortgages, much like any other form of credit such as personal loans or credit cards are affected every time the ECB (european base rate) goes up or down. Property purchases were much more affordable when …

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Find out how much you can borrow

Your current income (which includes commission, bonuses, overtime – i.e. any additional money that is subject to tax) will determine how much you can borrow. Some lenders calculate borrowing ability by a straightforward multiple of your income while others will work out your net disposable income and then allow you borrow a percentage of that. There are many variables involved in calculating your approval amount, your best bet is to apply for Approval In Principle through your broker.

100% finance has recently been introduced by several leading mortgage lenders, which means therefore that a deposit is no longer required for First time buyers* and 100% of the entire purchase price can be arranged by Irish Mortgage Brokers.

(*) Subject to certain lending criteria, terms & conditions apply.

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