Bank Refusal to Loan to First Time Buyers

Current issues with mortgage regulations are preventing many first time buyers who qualify for many exemptions from the harsh Central Bank mortgage rules. Data form Central Bank shows that only 17% of mortgages issued last year included mortgage exemptions. Lenders are entitled to issue exemptions for 20% of the value of the loans they issue to first time buyers. This gap in issuance of exemptions has left first time buyers are left desperate and frustrated by the difficult restrictions placed qualifying for mortgage exemptions. Exemptions are needed but people are not receiving them because of the scope for banks to lend more.

The requirements to qualify for the exemptions are extremely complex. This complexity of the rules of exemption is the reason why banks are unable to understand how many exemptions can be used, which in turn makes banks reluctant to approve exemptions. Qualifying for exemptions allow a minority of higher earning home buyers to borrow more than is allowed.

According to the Independent, it is estimated that banks have only issued income exemptions to 11% of first time …

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RTE Primetime featurs Irish Mortgage Brokers

We were asked to take part in an interview on Primetime about house prices and whether or not they were starting to show signs of falling. Our view is that they will fall in time (probably in a damaging way) but that it won’t be soon because supply is still above demand and price indicators like rents are still rising. This is damaging for first time buyers and those stuck paying high rents.

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Affordable Home Schemes

With the current housing crisis in the midst of the country, many plans have been developed to get the country out of its current slump. Some merely get laughed at, while others are well on their way to implementation within the housing market. It is likely that before long these effects will take a toll in the market and we will begin to see some upward movement in home buyer confidence.

The government has been quick to release multiple initiatives set out with the goal to turn the crisis around and allow the market to begin looking up. The Home Loan Scheme recently announced by the government is designed with the strategic plan to provide low-cost mortgages to first time home buyers.

With the first announcement of such a plan, many home buyers are thinking; is this too good to be true? As they have been waiting for an extended period of time for some light to be shed on the crisis that allows them to finally move into the homeowner sector.

The Rebuilding Ireland Home Loan …

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The Solution to the U.S Down Payment Dilemma

Those looking to buy a home in the States are all currently saying the same thing is holding them back….They can’t seem to afford the down payment.

Down payments on houses can be burdensome and oftentimes weigh on the ability to buy a home. In some cases, it calls for years of disciplined saving. Something that can be difficult for someone who wants a home and wants it now.

That’s where the start-up company Loftium comes in with a solution. This is a business started by 29-year-old Yifan Zhang of Seattle.

As someone who has personally heard her friends talk for years about the down payment dilemma, she finally decided to do something about it.

Zhang started as any other Airbnb business owner. Renting out one room in her townhouse to generate extra cash. Little did she know just how much cash she could actually generate.

Quickly into her business, she was earning enough to completely pay for her mortgage and then have some left over!

That’s when the idea dawned.

Zhang decided to eliminate …

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An increase of housing demand for millennials in the US

Real estate is on millennials to do list despite the stalled wage growth and housing market fears in the United States.

The National Association of Realtors show that the amount of first-time home buyers increased 3 percent year-over-year. They made up of 33 percent of the home mortgage market in May.

First-time home buyers can be categorized as someone who has not owned a home in the past three years.

Fannie Mae statistics shows that first-time home buyers make up of 42 percent of all home mortgages from January to April which is up 2 percent from 2016.

As interest amongst the millennials is rising in home buying, whether or not that will be a good idea is at question. The Federal Reserve just raised their interest rates which will affect the millennials in search for a …

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Cash back deals: are banks manipulating borrowers?

The Competition and Consumer Protection Commission (CCPC) warned lenders last month about their use of cashback deals and loyalty discounts. The commission believes that such incentives may be detrimental to consumers and may reflect unhealthy competition in the mortgage market.

 

Cash back deals have become more and more common in the market in recent years. These deals work by giving borrowers a certain percentage of their total mortgage amount back at the start of their loan, and they mostly target first time buyers who may need the extra money on hand to furnish their homes or to tide them through a tough transitional time in life.

 

A quick look around the market reveals that major lenders, such as AIB, Ulster Bank, Bank of Ireland, EBS and KBC, all have similar cash back deals, mostly ranging from 2-3% or €1500-€2000. The catch on these loans however, is that interest rates on them are often higher than the average on traditional loans. This means that over the term of the loan, extra interest paid  may turn out to be much …

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Mortgage approvals

Analysing figures released by the Banking and Payments Federation, the article sends a somewhat contradictory message. On the one hand, first time buyer mortgage approval volumes increased 19% this April compared to April of 2016. However, this volume also represents a 8.4% drop from the number of mortgages approved last month in March.

The decrease in the number of first time buyer mortgages this month is not indicative of the generally increasing annual trend, and may be due to the lack of buyer discounts offered in the month of April, when there isn’t many major holidays or events. April is generally the worst time of the year to finance a house (Business Insider).

On a larger scale, the trend in approval volumes for all mortgages follows that of first time buyer mortgages, but to a less exaggerated extent. The number in April represents an increase of 11.7% compared to April of 2016, and a decrease of 11.6% compared to March of this year.

The greater increase in first time buyer mortgages as compared to all mortgages could indicate that more …

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Today FM, Irish Mortgage Brokers feature on ‘The Last Word’ with Matt Cooper

We were pleased to be part of a discussion with Matt Cooper (Today FM) and Kevin Doyle (political editor at The Independent) on the topic of housing on The Last Word.

The analysis we provided was to make the point that help to buy cannot possibly be behind house price increases across the nation. We also made the point that prices would have risen even without it and that you need to look at the secular trend not just the short term ones.

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Generation Rent? Try generation Broke

It bothers me when people promote long-term renting as a better choice than home ownership because it belies some basic facts.

When I was studying accounting, I was taught to be accurate. When I was learning about financial advice, I was taught to be prudent. Yet both of these concerns are often cast aside when debating the benefits of buying versus renting.

Nationally we are at an important juncture. It’s acknowledged that huge numbers of people won’t be able to afford to buy a home. If this proves to be true, many will also be locked out of one of life’s most wealth-creating activities.

The first problem is the nature of the comparison. If rent is €1,300 a month and a mortgage costs €1,500, then it’s cheaper to rent, right? Well . . . no it isn’t. The outlay is less, but the actual cost of the provision of occupancy is the rent versus the interest portion of the mortgage, not the entire payment. I will explain that point.

People often say rent is dead money. To be fair, so …

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Irish Independent: Quote Irish Mortgage Brokers on Central Bank limits

Mark Keenan quoted Irish Mortgage Brokers on the topic of how the Central Bank regulations were affecting prospective property buyers.

Meanwhile, Karl Deeter of Irish Mortgage Brokers described Mr Frisell’s comment as “effectively engaged in social engineering”.

“If they know that shifting people from ownership and into rental is the outcome of their policy, and they keep on doing it, then we have to assume that this is the outcome they have been pursuing,” he said.

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