Re-mortgaging an affordable house

Re: Re-mortagaging an affordable house

Thanks to all for feedback. 'shanegl' is correct, the clawback is based on the current market price of the property at time of sale or re-mortgage. The only thing that is agreed and set in stone is the %; mine was 17.05% discount so I have to repay 17.05% on the current value of the property. I have already submitted a request for redemption and the figure received was inclusive of a 17.05% clawback based on a valuation submitted with my request. My clawback is definitely for 20 years with reduction of a certain % after 10 years. Vanilla, I wish your point was true in my case that (for clients you are working with now) "It then decreases each year by 10%, so if you hold on to it for 10 years there is no clawback". Were any of your clients with Dublin City Council? I was of the impression that all local authorities were bound by the same rules but I may be wrong. I'm not sure of your point 'Abbeykiller' but I am not trying to pay the debt off to avoid paying the clawback as this is simply not possible; no matter what route I choose, the clawback is and will remain payable until the 20 years are expired. I know some a lot of you think it is a bit crazy to repay the clawback just to remortgage but unfortunately I have no option. I did not do SSIA so I need to do this in order to release equity on my home for home improvement purposes. Furthermore, I will have a lot more flexibility if I move from the council to a bank in terms of future equity release etc etc. I was of the impression that I could move my mortgage from DCC to certain banks, BOI, IIB and EBS, (with the clawback moving to the bank) but apparently this is not the case. See BOI's website for example under the 'Mortgages' section - search for 'affordable'. They say that they will not accept a transfer of an affordable housing mortgages that are already being paid to a local authority; I am going to check with EBS tho. I did my deal over three years ago now so it seems that the rules have changed since then; lot more flexibility with the scheme now. I could wait for a while and see if these legal issues between the lenders and the local authorities are resolved but who knows, it could take years! Where does that leave me and so many others in the meantime?! I would love to keep the property as is for the 20 years and not repay the clawback but that's not going to happen. I for sure am not going to stay in a 2 bed apt for the next 20 years so I am bound to sell it before then in order to upgrade to a bigger house at which point the clawback would be payable anyway (and a lot more considering it will be based on the current value of the property at the time of sale!!). The local authorities and the govt have this whole scheme wrapped up so whatever you do, you will get hit somehow whilst they make a huge profit.
 
Re: Re-mortagaging an affordable house

 
Re: Re-mortagaging an affordable house

Then it differs from Council to Council- because the amount is set in stone for my clients- it does not increase with the value of the house.
 
Re: Re-mortagaging an affordable house

vanilla, what council area are you representing ?
 
Re: Re-mortagaging an affordable house

Hi RitaC- I have dealt with Kerry County Council.
 
Re: Re-mortagaging an affordable house

According to Fingal you must pay back the clawback to remortgage. I find this very annoying because my contract clearly states that the clawback is only to be paid if I sell.

I wrote to the Ombudsman's office last June to see whether this is correct but they have been very slow to answer even though I have been in regular contact. The person I was speaking to was Barry Mescall of the Office of the Ombudsman, 18 Lower Leeson Street, D2 phone 01 639 5600/fax 01 639 5674. Perhaps if more people queried this matter they might hurry up with an answer for us. On the 1st of November 2006 I was told that they had received a report from Fingal County Council and that it would take them a while to review it. If I hear anything I will keep you all posted.
 
Re: Re-mortagaging an affordable house

Vanilla said:
........ clawback is set when the property is purchased. It then decreases each year by 10%, so if you hold on to it for 10 years there is no clawback..
Click to expand...

Are you sure this information is correct? doesn't the clawback stay the same up to 10 years and then starts to decrease at a certain % each year until 20 years has been reached???
 
Re: Re-mortagaging an affordable house

Yes that's true (for Fingal coco anyway) I bought 18 mths ago and the clawback is x% if you sell it up to the 10 year mark, after which it decreases by 10% (of clawback %) each year until 20 years, after which no clawback applies.
 
an affordable house

Hi all,

Im just new to this site i am apply for the affordible housing and just want to know do i have to get a mortage with the bank or can i do through county council and are they strict on loans i have a bit of bad credit would they check this out i really want a house to start a family can any one help me please,
 
Re: Re-mortagaging an affordable house

There are two different schemes. With the affordable housing scheme the mortgage is from the council. With the affordable housing initiative the lender is a financial instutition, as far as I know there are only three that currently deal with affordable housing. (BOI, EBS and IIB) but I am not sure of this.

I dont think that getting it from the council is really any easier than getting it from the bank they are just as strict on credit rating etc. They may have a little more leeway. Its a while since I got my house on affordable housing with the loan from the county council. I had to provide lots of documentation and prove that I was capable of paying the mortgage. My understanding is that they have become a lot stricter now as there are more and more people applying but I am open to correction there!

While there are disadvantages to doing it this way I have never looked back! I have approx 100000 equity in my house (after the clawback is paid) and I would never have saved that in the four years since I got the house so its been mostly positive for me. I want to do some home improvements now but can only remortgage if I pay back the clawback at the same time eventhough I wont be selling! This seems to me to be a bit on the unfair side! But I guess they did not think of these things when they were designing the scheme. I am waiting on word from the council to see if they can facilitate a home improvement loan or something similar added to the mortgage so maybe!!!!!

Anyway best of luck with your decision!

D
 
Re: Re-mortagaging an affordable house


There are a few different schemes under the umberella of affordable housing and rules differ for each of the Councils.

Affordable housing with DCC you can either go shared ownership OR private lender (BOI, EBS and IIB) OR a mortgage from the coucil.

check out the site:
[broken link removed]
 
Re: Re-mortagaging an affordable house

I have tried to remortgage my affordable house (to consolidate my loans - I have huge debts) also and IIB have just come back saying that they will only remortgage if I pay the council their clawback which works out to be €130,000. I got consent from the council last year to remortgage and the council's solicitors did up a legal document for the mortgage company stating the amount that they consent for me to borrow. But this still did not matter. I'm also in 2 minds whether to try and buy them out because I'm finding it really frustrating that I can't release any equity on my house. I too cannot see myself owning my 2 bedroomed house for the next 18 years. Apparently the banks are more flexible if you've had you house for longtime, I bought my house 2 and half years ago and Solicitor reckons if I had it over 5 years they might have overlooked the clawback. But thats all hear say. Either way for the foreseeable future its a no win situation for me. Can anyone that has toped up there mortgage to pay off the clawback let me know how they went about it and what difference it made to their repayments each month. Thx
 
Re: Re-mortagaging an affordable house

Can you go to one of the other leders and see if they can do it for you...ie BOI or EBS...??
 
Re: Re-mortagaging an affordable house

I purchased an affordable house with Waterford City council. Recently enquired about remortgaging to do an extension and unfortunately to remortgage it means paying back the clawback clause.
 
Re: Re-mortagaging an affordable house

Hello All,

Just thought I would let you all know some information in relation to the above topic. I have an affordable house with Fingal County Council which I bought 4 years ago. The kitchen in the house was never very substantial and I always wanted to update it but couldnt really afford to. In the last couple of months I have been in touch with Fingal to try and ascertain what my options were and find out if there was a top up facilty or something similar. I have just received a definitive reply which I waited almost 6 weeks for which said that there is absolutely no facility for topping up other than to buyout which means remortgaging including the payback of the clawback!

I have sent an email to the Council stating the unfairness of this system as it means that people will be precluded from improving/upgrading their dwelling due to the restricitve cost. I have also stated that I will be discussing this with my local representatives in the lead up to the general election. I feel this is an area of the affordable housing that was completly ignored when they were designing the scheme. Many people have expanded their families since purchasing their houses and are caught in a catch 22 whereby they cannot extend or top their mortgage without paying back clawback and they cannot afford a bigger house!

Anyway just thought I would spread the news!

D
 
Re: Re-mortagaging an affordable house

I think that you should report this to the Ombudsman (Emily O'Reilly) contact details are available on www.ombudsman.ie and to

John O'Connor, Affordable Homes Partnership, Floor 2, Cumberland House, Fenian Street, Dublin 2. Phone: 01- 656 4113
Fax: 01- 656 4101
Email: john.oconnor@affordablehomespartnership.ie
Website: www.affordablehomespartnership.ie

I received the above contact details from IFSRA with whom I have been in contact regarding this issue, but they have directed me to deal with the above. The more people who contact them the better for all involved in affordable housing.


 
Re: Re-mortagaging an affordable house

Thanks Vanilla!

I will certainly be writing letter to both of these and I will copy the letters to the Council. I think it is unfair and now is the perfect time to raise it as an issue!

I will let you know whether or not I get a reply!

D
 
Re: Re-mortagaging an affordable house

sorry for bumping this thread up but have heard that EBS are allowing people with affordable housing mortgages to remortgage with them without paying the clawback. Saw this on another website, going to ring them to see if it's true has anyone heard this??
 
Re: Re-mortagaging an affordable house

I thought property rights were enshrined in our constitution.

For example , if you are renting a council/corporation house for 30 years and then opt to purchase it from them and then pay off the mortgage early in say 5 years. You are the owner of 100% so who can stop you from selling and cashing in the 33% discount ? what if you want to trade up to a larger house? or emigrate ?
Or does someone in such a situation not have their name properly on the deeds of ownership ?
 
Re: Re-mortagaging an affordable house


hi rex, I would be very interested to hear if this was the case. Just looked at EBS website and there wasn't anything about it there... can you post what they told you in your call?

thanks

S
 
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