Shared ownership - 99% mortgage 1% rent

B

Brooklyn

Registered User
Messages
417
I understand that DCC is now trying to encourage people on shared ownership to go to 99% mortgage 1% rent. I'm told that this would not require a revaluation or repaying the clawback.

The obvious advantage is that you own much more of the property and much less of your monthly payments will go into a black hole never to be seen (by you) again.

The obvious disadvantage is that you're taking on a much bigger mortgage and so your monthly payments will increase... especially when interest rates start going up again.

What are the other pros and cons?

(Mine is also affordable housing, if that makes any difference)
 
Hi Brooklyn

this would be a great new for people with shared ownership, there is no disadvantage really in this, because in SO besides mortgage you pay rent also that in case 60% to 40% is approximately 450 euto (mortgage) to 450 (rent, if you do not have any discounts), therefore in case when your mortgage is increased to 99% your mortgage will also increase but you rent automatically decrease to very low value,

do you know if similar solution is being proposed by Cork County Council ??
reg
skier
 
I'm hoping to go this route very soon.
I have an old form from DCC ( will be looking for more up to date info from them soon) which states a fee of 634.87 payable to DCC. This covers legal fees etc etc.

It then goes on to say we will need our own solicitor with a view to getting the title documents on accountable trust receipt.

What I need to know really is how much is this going to cost me ???
I'm hoping anyone out there who's done this successfully can advise me. Along with the afore mentioned DCC fee what added expense can I expect from my own solicitor.

Any advise appreciated, I'm truly sick of watching my hard earned money disappear. Knowing full well my monthly payments aren't even hitting the actual mortgage.
 
Determined said:
I'm hoping to go this route very soon.
I have an old form from DCC ( will be looking for more up to date info from them soon) which states a fee of 634.87 payable to DCC. This covers legal fees etc etc.
Click to expand...

Be careful about DCC forms They sent me an old one which I filled out only to be told "you filled out the wrong form", :rolleyes: then they sent me a different old one, so I ended up having to fill out three...

The solicitors' fees will vary widely, I was quoted anywhere from around €650 to around €1250. Haven't received my final bill yet because the re-registration at the Land Registry hasn't gone through (massive backlog there apparently).
 
OK, I've started the ball rolling and will update here for anyone elses benefit or indeed if I'm going wrong myself, someone may point it out.

I rang DCC and they told me yesterday that I can't just buy out the shared ownership as it was an affordable house and I have to also buy out the clawback.
They have now put in a request to the valuers office to contact me to make an appointment to come out and value the property and the relevant forms are being sent out also.
Much as I'd love to get rid of the claw back and buy out the shared ownership in one foul swoop I don't think I have the means nor the ability to pay back what I can only imagine to be a much higher monthly bill.
Guy in DCC told me a lot of people are doing this now but not necessarily being approved as credit checks are revealing loans, credit card bills etc. I don't fear a credit check too much but still can't see my being capable of increasing my monthly payment that much.
So I bought an affordable house via shared ownership, can I not just buy out the shared ownership and leave the clawback or this DCC's way of getting in more revenue.
I'll let ye know what happens.
 
I have to also buy out the clawback
Click to expand...
i don't understand that part. you're not selling the house so why would you have to buy out the clawback? did they explain this part?

i remember two years ago when i rang up to complain about the unjustified increase of the rent part, a girl explaining to me that if i do 99/1 i wouldn't have the rent hassle and i can switch over any time. i asked what's involved and she had said to me, "just changing the percentage" through the DCC contracts with the finance dept. at the time i didn't ask for more info as it wasn't applicable but now i wished i had asked. now im considering the 99/1 option, too.
 
That's what I thought Alaska. I will however let them proceed with the valuation etc (making sure first that there's no fee) just to find out, but until the forms come in the post for the 99/1 I won't know what they require.
Guy on the phone said that I needed the info from the valuation to put on the forms before they could be submitted.
Will let you know
 
The reason you have to pay back the clawback is because the way the legislation was drafted, the clawback kicks in when you sell or remortgage. The government has been promising forever to bring in new legislation to change this, and they actually did bring in that legislation last year, but due to errors in drafting (they actually admit this) it only applied to people who bought their property after the enactment of the legislation. They're still promising to bring in amending legislation for existing owners but we're still waiting for it. There's another thread on that topic in this forum.

With housing values being what they are at the moment, though, the likelihood is a lot of people won't have any clawback anyway. That's what happened in my case.

Determined said:
Much as I'd love to get rid of the claw back and buy out the shared ownership in one foul swoop I don't think I have the means nor the ability to pay back what I can only imagine to be a much higher monthly bill.
Click to expand...

If there's no clawback, the monthly bill will probably be much lower because they'll extend the term of the mortgage. Again this is what happened in my case.
 
My understanding of a "remortgage" is that it is a process of moving your mortgage loan from one company and/ or product to another.

As this is not the case here i.e. loan stays with the same company, why would the clawback kick in? it's still the same mortgage, same lender, same person paying the mortgage, just with a larger input (money paid in).

I probably have to read my contract again....:eek:
 
alaskaonline said:
My understanding of a "remortgage" is that it is a process of moving your mortgage loan from one company and/ or product to another.

As this is not the case here i.e. loan stays with the same company, why would the clawback kick in? it's still the same mortgage, same lender, same person paying the mortgage, just with a larger input (money paid in).
Click to expand...

I don't have the text of the original legislation but it didn't specify that this happens when you "sell or remortgage". My understanding is that it wasn't technically meant to cover any situation other than selling, but the way it was written it ended up covering remortgaging as well. (There seems to be a real problem with drafting legislation in the Dept of Environment.) Presumably then it also ended up covering situations where you go from shared to full ownership. But someone who actually has the text could maybe clarify.
 
Ok still to get any forms in the post but DCC rang and are coming out to value the house next week. Someone suggested I should also have my own independent valuation done. Anyone done this ? good idea but would DCC pay any attention to it....
 
DCC's valuation is the one that matters, although if you're unhappy with it, an independent valuation with a wide discrepancy would be a good bargaining chip for you. You could use it to argue with DCC for a re-revaluation or in a complaint to the Ombudsman.

No point shelling out the money for it until you see what DCC's valuation says, though.
 
Ok the valuation came in today and it's lower than both the original market value and also the original sale price. So clawback is wiped out which is good but technically I'm now in negative equity, this however doesn't bother me as it the family home and we have no plans to sell or move.
Next step DCC tell me today is to process the new 100% mortgage which will increase my monthly payments only slightly (though we don't any of us know what the coming months will bring).
I have a lot of paperwork to gather now over the next few weeks and don't have to pay the 650 Euro which covers the DCC cost of transferring the land registry till the signing day so it hasn't cost me a penny yet. Lisa in DCC reckons that my own solicitor costs shouldn't exceed 600 Euro either so fingers crossed it all goes through.
 
Hi Determined,

How did you get on? are you on full 100% mortgage repayments to DCC?
Have you removed the clawback?

I am in same situation as you were. had the valuer out the other day so we'll take it from there...

Any tips?
 
Hi all,

Very interested to hear how you are all getting on. I bought my home with DCC under the shared ownership scheme (not affordable home) almost two years ago. I had hoped to go down the route of securing a mortgage with a bank and buying the council out but with the way things are these days that isnt possible. Very interested to hear about the 99%mortgage 1% rent idea though. My house would be in negative equity, albeit probably not that much. How would I go about changing from 50/50 to 99/1?
Also can anyone who has actually done it tell me was there much difference on your monthly repayments? It is just really annoying me paying half rent every month knowing that it could be coming off the overall mortgage.

Thanks in advance,
Ericsson :)
 
ericsson said:
Very interested to hear about the 99%mortgage 1% rent idea though. My house would be in negative equity, albeit probably not that much. How would I go about changing from 50/50 to 99/1?
Click to expand...

DCC is no longer doing 99/1. They will transfer you to a full mortgage. Contact them for information.

Also can anyone who has actually done it tell me was there much difference on your monthly repayments?
Click to expand...
Mine went down because they also extended the term of the loan. I didn't ask them to do this, they just did.
 
Thanks for the reply Brooklyn. Will definately ring them during the week. How much roughly would the cost of changing over to a full mortgage do you know offhand?

Thanks in advance,
Ericsson :)
 
ericsson said:
Thanks for the reply Brooklyn. Will definately ring them during the week. How much roughly would the cost of changing over to a full mortgage do you know offhand?
Click to expand...

It came to about €1150 between DCC and solicitors' fees. Shop around because some of the quotes I got from solicitors were ludicrous.
 
Thanks a million for that Brooklyn. Just out of curiosity roughly how long did it take for it all to go through from when you first inquired? I know how lax DCC can be with anything like this!!! ;)

Thanks again,
Ericsson :)
 
You must log in or register to reply here.
Back
Top