# Are Mortgages and Banks the best model for house purchase?



## RichInSpirit (28 Nov 2014)

Are Mortgages and Banks the best model for house purchase? 
I'm thinking here something like the Amish people do in the USA where a community gets together and build each others houses. Or similar ideas.
Should we be thinking more outside the box in Ireland about house purchase than mortgages?


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## RichInSpirit (27 May 2015)

Saving for a house and purchasing a house without need for a mortgage would be another way to do it.


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## RichInSpirit (27 May 2015)

Pay as you go house purchase is another idea that went through my mind. Like the pay as you go mobile phones.


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## jim (27 May 2015)

pay as you go would be renting would it not?

saving for a house without a mortgage is the default, i would have thought, in the same way that one purchases anything. Problem is due to the cost of a house so one generally needs finance.

Perhaps alternative sources of finance would be a way forward such as borrowing from a communit pool of funds at a low rate...the credit union!..problem here is i dont think CU's give out mortgages and their interest rate is similar to banks anyway.

Maybe CU's need an overhaul or an alternative to them should beset up.....i dunno.....great question though.


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## Sarenco (27 May 2015)

Vendor financing is increasingly common in the US and Australia as a way of financing real estate transactions.  Essentially the party selling the property fulfils the role of the bank and accepts deferred payments plus interest over an agreed term.


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## Brendan Burgess (27 May 2015)

jim said:


> Perhaps alternative sources of finance would be a way forward



Agreed. Check out this: 

*The Mortgage System in Denmark*

Small problem for the Irish is that they have an enforcement court to make sure that if someone does not pay their mortgage, they are out of the house within 6 months.  This keeps the risk of the underlying bonds high and so the rates are low.


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## WizardDr (30 Jun 2015)

Simple scheme (no chance therefore that it will ever happen here unless Goldman Sachs flog it)
1. Mortgage Bonds with indefinite duration issues to individual investors for Residential Mortgages
2. No taxation on Bond interest
3. Low cost structures built with replication
4. Bonds mature randomly in line with capital payback
5. Gap between interest paid and interest received could be such that structure is 'variable' with fixed gap
6. Incredibly enough could fix rate paid; fix rate being received with defined margin
7. Bonds retain same share of property until paid off.

In this country, nothing simple is ever done. Ever.


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