Brendan Burgess
Founder
- Messages
- 52,118
Banks and lobby groups will have a chance to comment on the plans, which center on introducing loan-to-value and loan-to-income restrictions.
The 3:1 ratio is a fairly safe ratio. Greater than that is not as safe. That's just my opinion of course.
The Central Bank has said formal limits should be considered on the amount of money people can borrow to buy houses.
In a research note, Central Bank economists say banks should not lend more than 80% of the value of a property, and that borrowers should not get a mortgage of more than four times their income.
This would makes both banks and households more resilient in market downturns, according to the research.
.................................Central Bank are a toothless bunch. They must assert themselves and take control and regulate. No point in engaging in consultations etc while the horse is bolting. They will walk us into it again just wait and see. They need to act and be seen to act.
In theory, the market should be left alone .
Bronte
Most of what you are saying is already in place.
- Most lenders look for 10% deposit.
- All interest rates are stress tested at +2%
- Underwriters look for savings. Getting the deposit from parents and showing no signs of savings won't impress and underwriter. They want to see that you are able to make repayments.
- All other loans are looked at too.
- You must demonstrate an ability to repayment the stress tested amount. This has to be shown through current rent, saving, paying off loans (if you pay it off early, make sure you save the money)
- Guarantors are not accepted anymore.
The problem now is that the demand is so much higher than supply and people can't save quick enough to get the deposit. This has lead to another housing bubble, in Dublin anyway.
I am also coming across a lot of cases where one of a couple has got into financial difficulty in the past and it is recorded in their ICB record. Even though they have got themselves back on an even keel, the banks won't look at them.
It is incredibly difficult to get a mortgage these days.
Steven
www.bluewaterfp.ie
How do you deal with buy-to-let investors in post Bacon world, albeit in 1998.
If we make it harder for buy-to-live to buy, then as noted earlier rents will go up, playing into the investors hands and further driving out the buy-to-live group
I wonder has Dublin always been a boom and bust city?
Is that the reasoning behind the Boomtown Rats name?
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