Advice on transferring AH to 100% mortgage with DCC

Star10

Frequent Poster
Messages
25
Like others, I too received a letter recently to transfer to 100% mortgage. I bought my AH in 2004. If I did transfer, my mortgage payments would be significantly reduced.

My query is what are the pitfalls of doing this please?
I'm just not clear on what they might be and if its in my interests to do so??

Any advice appreciated please.
 
Z

zen

Guest
See Brendan's post, put on some coffee and read it, its interesting but not gospel, I've read it and have reservations. Again, to his own admission, this is his own interpretation. He concluded that shared ownership is a misnomer, apparently you actually own the entire place, I disagree. I say there has been some legal linguistic gymnastics done here.

However, if you sign the "transfer to 100% Mortgage" (which aparantly you are already according to Brendan) then you will be liable for the LPT (Local Property Tax) on the % owned by the council (which they don't really own). Might as well throw out the English language at this stage.

As a matter of fact, All 50/50 shared ownership people here paid roughly 90eur. Since I'm annuity (100%) I paid 180..... you can do the math...

That's why they want you all to transfer to 100%, but be weary of those bearing gifts. The council are either paying this LPT and need to make this adjustment to get shared ownership into the LPT net. If you see no reason to switch then don't, if you do your LPT will increase, that is guaranteed.
 

Society

Frequent Poster
Messages
163
Also if you buy out the councils share you could be liable to pay the clawback. It might be a good idea to do that now whilst prices are semi-low. Instead of changing to a 100 per cent loan you could also enquire if you could remortgage with a private lender but the clawback will no doubt be triggered.
 

dingoxh

Registered User
Messages
21
However, if you sign the "transfer to 100% Mortgage" (which aparantly you are already according to Brendan) then you will be liable for the LPT (Local Property Tax) on the % owned by the council (which they don't really own). Might as well throw out the English language at this stage.

As a matter of fact, All 50/50 shared ownership people here paid roughly 90eur. Since I'm annuity (100%) I paid 180..... you can do the math...

That's why they want you all to transfer to 100%, but be weary of those bearing gifts. The council are either paying this LPT and need to make this adjustment to get shared ownership into the LPT net. If you see no reason to switch then don't, if you do your LPT will increase, that is guaranteed.
I don't agree. I have shared ownership loan and am fully liable for the LPT. - I don't think this is the motif.

As regards the pitfall of moving to 100%, I don't know. I really think it is a case of simplifying the loan.

I have read Brendan's post a couple of times and it strikes me that he is correct. I have a shared ownership loan for since 2007 and have never missed a payment. I am also €2500 in credit with DCC. I have never intentionally overpaid. I think the reason for the surplus in my account is because of the rent rising by 4.5% each year and it just "sits" there in your account. This surplus will grow larger and larger each year. In theory if you sit back and just pay each month, you will have loan paid off early by virtue of the surplus growing each month.

DCC have given me figures where by were I to move to a 100% mortgage, my monthly repayment will reduce by approx €40 per month but also more significantly the term of my loan would be reduced by 3 years. This supports Brendan's theory that the "rent" is really a loan- otherwise, there is no other way repayments can be reduced at the same time as the term be cut without a significant interest rate cut ( of which there is none)

Happy to hear from anyone who has a different take.
 
Last edited:

Skier

Frequent Poster
Messages
39
I don't agree. I have shared ownership loan and am fully liable for the LPT. - I don't think this is the motif.

As regards the pitfall of moving to 100%, I don't know. I really think it is a case of simplifying the loan.

I have read Brendan's post a couple of times and it strikes me that he is correct. I have a shared ownership loan for since 2007 and have never missed a payment. I am also €2500 in credit with DCC. I have never intentionally overpaid. I think the reason for the surplus in my account is because of the rent rising by 4.5% each year and it just "sits" there in your account. This surplus will grow larger and larger each year. In theory if you sit back and just pay each month, you will have loan paid off early by virtue of the surplus growing each month.

DCC have given me figures where by were I to move to a 100% mortgage, my monthly repayment will reduce by approx €40 per month but also more significantly the term of my loan would be reduced by 3 years. This supports Brendan's theory that the "rent" is really a loan- otherwise, there is no other way repayments can be reduced at the same time as the term be cut without a significant interest rate cut ( of which there is none)

Happy to hear from anyone who has a different take.

Hi dingoxh

You said DCC have given you an option to switch to 100% and that your loan term would reduce by 3 years? - do you mean here your full total loan would take less time i.e. 22 years, not as anticipated 25 years at the start of the shared ownership ?

Note that according to the Brendan's explanation - if you don't switch to 100% and you just continue to pay monthly mortgage + rent, your mortgage part will indeed be paid off after the 25 years but your rented part will not finish after the 25 years - it will take much longer to repay...as far as I understand the scheme.

Regards
Skier
 
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