First Active launches 100pc mortgage

Hi,

The 100pc mortgage has become a reality for Irish first time buyers, thanks to First Active.

See below link.

[broken link removed]


Regards

What do people think of this? I can't imagine people who struggled for ages to get a deposit and have finally got their house will be too impressed. I'm saving at the moment so it's definitely heartening. I'm curious but cautious I suppose.

However, do people think that this could be too good to be true or do you believe its about time this facility was available? Do you foresee any pitfalls? Do you reckon other banks will follow with competing products? It's a step change in the market I think.

Jake

What is the reason not to lend 100% mortgages? Surely if you have a good, regular income, and can afford the repayments there's no problem.
Is the only issue if the value of you house falls and you cant afford the repayments, that the bank will take a loss if the repossess the house?
KK

I think its a great idea, but am also one of those people who have struggled to get the deposit together....ended up having to borrow part of the deposit from a family member and am now trying to pay it back...

I havent yet drawn down my mortgage, am due to do so end of Aug. Im wondering can I apply to First Active for a 100% mortgage now?? and if Im approved, would that mean that I would get my deposit back on day of closing???

Tonash said:

I havent yet drawn down my mortgage, am due to do so end of Aug. Im wondering can I apply to First Active for a 100% mortgage now?? and if Im approved, would that mean that I would get my deposit back on day of closing???

Click to expand...

Yes you can, a colleagues of mine is filling the forms in as we speak!

Sarah

www.rea.ie

OMG! Well its a worth a try I suppose! Thanks for the prompt reply! Dont suppose you know what the criteria is???

Not sure if I am reading this right, you get 100% only when you draw down the mortgage, right?

Will First Active release the deposit to you?

Or

By borrowing the deposit you need, with the intention of paying it back once the mortgage is drawn down, will this affect the amount you can borrow?

No lender can/will allow you to drawdown part of the mortgage until you legally own the house so whatever deposit the vendor/builder/selling agent is looking for will need to be either from savings, a loan or a gift but this will be returned to you on completion when the 100% of the price is released. If it's a stage payment new build the maximum number of stage payments allowed is three.

And Tonash - the mortgage must fall within 40% of your net disposable income over a maximum term of 30 years; the repayment is stress tested at 2% over current rates. If you don't qualify for the full 100% you can take 94/95/96% or whatever you do qualify for.

Sarah

www.rea.ie

Citizen Jake said:

What do people think of this? I can't imagine people who struggled for ages to get a deposit and have finally got their house will be too impressed. I'm saving at the moment so it's definitely heartening. I'm curious but cautious I suppose.


Jake

Click to expand...

This should not bother anyone who has had to slog to get the deposit. Anyone who has their own cash in the house has the advantage of having equity in it - ie, 390k for a house, person puts in 39k = lower mortgagae repayments than if you were on 100% mortgage, plus if / when you sell, you get the cash you put in back, plus any increase in price.
100% mortgages are long overdue, but i would rather be in the situation described above. Plus, this and SSIA maturity next year is going to drive property prices through the roof.

Hate to rain on anyone's parade, but is this entirely a good thing? Is it not a good thing that a potential house purchaser should be able to show some capacity to save some kind of a deposit or have other assests equivalent to same, not necessarily 10% or the house price?

I know a couple, mid/ late twenties who have dreams of building/ buying a house. Not just any old house, they want a big house with all the trimmings...but they haven't a bean! Not because they don't earn decent salaries but more because they have no idea what it's like to save for the things you want/ need in life. They eat out regularly, weekends start on Thursday night and finish on Sunday night, lifes one long party and they don't want it to stop. I'm 33 married, one child and have been a "homeowner" for 6 years, but it wasn't easy, both my wife and I were low to average earners at the start of the boom so it wasn't easy to pull the money together to buy a home. And when we did bite the bullet it took a couple of years to feel comfortable with the level of debt/ repayments etc. Maybe I'm just getting old but I think this might fuel further inflation in the house market. At the end of the day people are quite happy to tell their bank/ broker whatever they want to hear when it comes to securing credit. Just because you earn a certain salary doesn't of itself indicate a capacity to repay.....Maybe this should be in LOS. What do you think?

So if I were to sell for 400k, buy for 500k I would need a deposit of 50k , then I borrow the 100k shortfall I should get the full deposit back on closing ? Correct ?

Is this the case now with all lenders ? In the example, the mortgage is for 100k for a 500k valued house.

Redstar - the product is only available for first time buyers.

Sarah

www.rea.ie

Do you really think house prices are going to go up because of this?

God it's very exciting isn't it?

Hi Sarah,

Is it not possible to do what I outlined then ?

If a property is 500k and I borrow 100k is this not a LTV of only 20% anyway ?

I would not be borrowing anywhere near 90/92% of the house value, so why could I not get the deposit back if the loan + my house sale proceeds = 500k

Thanks Sarah!

Hi,
I signed the contracts , will it be possible to change the lender now (I mean to First active)?

Thanks
Joel

"Is the only issue if the value of you house falls and you cant afford the repayments, that the bank will take a loss if the repossess the house?"

A common misconception. If there is a shortfall when they sell, the bank will pursue you for it. Eventually, they will get some or all of it back from you, unless you declare bankruptcy.

does anyone know if u have to already be a first active account holder and have savings in account ?

also, if someone can help me out with this query....

was approved by irish mortgage corporation for mortgage of 197,000 but was told could get around 205,000. yet ebs and boi offered much less mortgages. why was this ? anyone dealt with imc before ?

if 100% mortgage is approved to me by first active, and looking at houses around 220,000 in wexford, what extra costs would i expect to pay?

any help would be greatly appreciated. thanks

FA is not the first with 100%. These are largely available to 'professional' groups for some time.

Dont know how it will advance the real issue. Ireland has the lowest number of houses per 1000 and has held this great record since 1991. Developers have no need to pass brown envelopes with the great assistance of the Planning debacles.

Hi,
I signed the contracts , will it be possible to change the lender now (I mean to First active)?


Thanks
Joel