'A lot of people my age got sucked in by the hype'
“You can’t carry your negative equity to a new house, even if you can afford one.”
Why does that line hurt my brain?
I tried to make it make sense but then I realise that houses in Dublin would have to cost the same as houses in Navan for it to work.
I suppose if you wanted to live in Finglas or Darndale the idea might work - sell Navan for 200K, buy Dublin for 200K - still have same negative equity - what’s the difference - but I would probably still choose Navan over Finglas.
In a way though, all these people believing in the hype kept my rent down. I shouldn’t moan I guess.
“At the time rents were going up so quickly that it didn’t make sense to rent.”
“Andrea was working in a local authority at the time and, on a whim, decided to see if she and her boyfriend would get a mortgage.”
“He had just come home after living abroad and had not found a steady job at the time”
I couldn’t find the line:
“We did nuttin’ wrong”
If your existing loan = 100K NE + 200K E
AND you can afford repayments on loan of 400K
THEN you can “afford” to buy a house for €300K and service NE of €100K
I take it that is the logic, i.e., that one’s income is enough to service a bigger loan but no bank wil lend where the security is worth less than the loan.
Thanks NE, I just find it hard to understand how people feel they can afford a more expensive place when they are already exposed 100k on their existing place! I’d be more keen to pay off the unsecured 100k than buy a more expensive place.
Also, in this example, the bank will be giving you 400k to buy a 300k house which doesn’t feel like it makes sense to them. Especially at a time when they would be trying to reduce their exposure. Why should they move from standing to lose 300k to standing to lose 400k!?
If it were the States what you could do is shortsale the existing house and the bank would attach a separate promissory note for the additional NE and then perhaps a different lender on the new mortgage…
We want to get back to Dublin where the good schools and good jobs are …sort of vibe.
Well, they are going from 66% VTL to 75% VTL…
Another economist (think it was Martin Wolf) previously proposed that the State might lend the NE to the vendor on short sale to allow the Vendor clear the bank debt and to deal with the NE as a contractual debt.
There is a slight injustice in the current scenario in that a bank’s position is not materially worsened whether you have NE of €100K on a €300K house or a €400K house if you can afford it. The bank’s lending policy of not lending for redemption of NE, possibly owed to that same bank, freezes up the market and causes more damage. In fact, it stops the market reaching the bottom as people in NE would bring liquidity and prudence with them as they lumped their NE from house to house. The states and the banks unwillingness to let the market find a bottom is drawing out the pain for everyone.
I said this long ago. It is likely that some people will spend the next 20 years carting 100k of NE around when they buy 90k worth of house to live in …once the debt becomes portable in some ‘nama for the people’ arrangement or other.
It will have to be dealt with sooner or later and that is for sure.
But Do’h, why didnt they release equity from their home to purchase a new home and rent out the first property as an investment and conveniently forget to tell the taxman like a lot of people did.
I mean like it was “so the done thing” unfortunately its also breaking the law as far as I know “but we’re worth it”.
Thanks for that. They did buy in 2006 and it was their first property so although a nice little rant, not really applicable…
That shows what you know, they would have gotten it and there were enough sub prime lenders out there to ensure they got it. Have you not heard of self certifying?
I have but I’ve also heard of sympathy. These kids were stretched, in fear and buying in Navan.
And interesting point is what exactly is the boyfriend liable for? They seem to have done it all on one salary at the time so is the mortgage actually in his name aswell?
They were probably more of a mind to release equity for the white wedding in due course but that didn’t really work out, perhaps I should send them to the spqr64 school of Canny McSavvy equity withdrawal and non notification of the revenue, they’re probably not only worth it but good for it!
That is still completely irrelevant, they have a PPR only and that is all they ever had . Any scheme to cart NE around will only ever apply to a PPR .
Unless it’s NAMA, tis a mighty big yoke so we can cart alot of shit!
Sorry I dont do CannyMcSavvy I leave that to public sector employees to load up on debt what with their borrowing power and secure employment an all an the banks lining up to encourage them. Because these are part of the reason property prices were driven up in Dublin and elsewhere P.S. Landlords among others trying to make a killing.
Eh yeah, still not getting the point are ya?
They bought a PPR in Navan as a step on the ladder, all your “points” are off topic.