Home Choice Loan - summary

As requested:

What is a home choice loan?

• Home Choice Loan is a mortgage for First Time Buyers and is provided by designated Local Authorities.
• First time buyers can apply for a Home Choice Loan to purchase a new or second hand property or build their own home (fixed price contracts only)
• Home Choice Loan provides up to 92% of the market value of a property purchased
• The loan is a normal Capital and interest bearing mortgage which is repaid on a monthly basis.
• Home Choice Loan offers one variable interest rate. The rate is currently set at 2.90% variable. APR 2.94%.

Who can apply?

• First time buyers earning over €35k single or €45k joint.
• Applicants must be in continuous employment for at least 1 year.
• You must prove refusal by two banks or building societies.
• Applicant must become owner occupier.
• 92% max LTV (only 3% of deposit can be gifted, savings must account for 5%)
• Max loan of €285,000
• Max term 30 years
• New or second hand properties up to 175 sq m internally
• All applicants will be credit checked
• Repayment capacity must be proven

How do I apply:

• Home Choice Loan is now available through authorised mortgage brokers.
• Complete an application form with your broker. Your broker will submit the application form for assessment.
• Your application will be assessed by the Home choice Loan central process unit and your broker will be advised of the decision.

This has been tried before and failed, is this not flogging a dead horse?


More than likely.


The broker association PIBA has asked for it to be reformed or abandoned as it has cost around €500m for a handful of successful applicants. The problem is that the loans are being underwritten in a similar way to the underwriting methods used by the banks. As you need two refusals from the banks, it is almost impossible to get approval from the home choice loan board thereafter. On the other hand if the government underwrites them in a looser way than the banks there will be considerable outcry from certain sources. It looks like a no win situation.



www.moneybackmortgages.ie

NorfBank said:

On the other hand if the government underwrites them in a looser way than the banks there will be considerable outcry from certain sources.

Click to expand...

Should that not read from anyone with any sense?

As a taxpayer I already own 1 bad bank, 1 good bank and a couple of ugly ones. The last thing I was on my hands is a sub-prime lender.

Home Choice Loan was set up, exlicitly, as a sop to the CIF. The state has no place becoming an active part of the housing market. In EVERY instance where it, or arms of the state, has become involved they've made a complete mess of it and have ultimately cost the exchequer hundreds of millions (billions?). The DDDA, The Affordable Housing Scheme. The list just goes on and on.

As a consumer, if you've been refused twice - STOP. You have no place buying a property until you resolve the issues that resulted in your refused applications.

NorfBank

Thanks for this excellent summary and assessment.

Brendan

Any update on this?

Given that the banks seem slow to lend, I was wondering why there is not more takeup of this scheme?

Do mortgage brokers advise their clients about it?

Has the DoE made a presentation on it to the Mortgage Brokers' Associations?

Brendan