Current Realities in Mortgage Financing...

Obviously the “availability of credit and its terms” are a predominant determinant of house prices in this country and obviously the dynamic has changed alot over the last few years.

I am just curious what peoples thoughts are on this matter based on personal or anecdotal experience?

It seems to me that the banks will happily lend when it suits their agenda, but in other cases they walk away from good borrowers willing to put down large deposits.

Some examples…
Seems banks are still very willing to lend to FTBs with minimal deposits required, especially if its in a dev’t that they currently have exposure to. This makes sense and wins political brownie points
In other cases, the stories I hear are very random…

ie 2 people, similar incomes /age / job security etc, both buying homes of similar value. One gets 75% financing despite having 2 current investment properties already in neg equity. The other could only get 50%, despite having no other investment properties (in fact was astute enough to have sold 2 inv properties in 07-09 area that he picked up from 2000 to 2004).

It seems very random to me!

Just thought a thread of peoples experiences would highlight the realities out there and help everyone in the price discovery process!!

I believe first time buyers are being prioritised because they give a net reduction in number of properties for sale.
Trader uppers finding it practically impossible. Would need to have primary residence sale agreed at least.

Investors in commercial properties I have heard need 50 percent and the overall deal must still stand up to have a chance.

Holiday home buyers. Cash Market?

International property. Cash only?

Auction property. Cash only?

Equity release. Does it happen any more?

Edit. Did I forget anything?

Interesting observations.

Keep us posted.

According to this article- a lot of people think market is at bottom. I have my doubts

independent.ie/national-news … 23663.html

Wow, the Sindo calling the bottom in the property market. They’ve only been doing that every week since mid 2006.

Below bottom. God thats funny. Well done that Sindo hack - new depths of stupidity are being revealed. I suppose these are the same experts who were telling everyone to buy property in 2006. Of course they are. They are still ‘experts’ after all.

Jayz the market is picking up, better get on de ladder now children. Does Mr McNerney have any vested interest in the property market to declare I wonder.

Dear God will this ever end.

I can’t read past the first loaded sentence: “A RECOVERY in the property market is being stopped dead in its tracks by the banks…”

re·cov·er
verb \ri-ˈkə-vər
transitive verb
1: to get back : regain
2: to bring back to normal position or condition

Funny enough I have the best record of any commentator when it comes to predicting reality in advance :smiley:

I explained the latest reality HERE last week, previous realities are covered earlier in that thread and elsewhere. The only metareality is that reality gets smaller Q on Q an will continue thus for many many years.

In 2010 redemptions and new issue were broadly in balance for the first time in eons in 2011 redemptions will exceed new lending for the first time since 1931 or 1945 …that from memory of a private PM exchange some years back.

Banks have to shrink their overall mortgage books by up to €7-10bn a year over the next 5 years at a time when net redemptions are running at €3-5bn and that with no lending in effect…so where will they find the other €2-4bn up to €7bn absent writeoffs then …eh ???

‘De Ladder’ is sooooo 2006. it implies that some effort is required to climb the rungs. That would never sell in the 2011 market. So… I give you ‘The Escalator’! No effort required*.

*Your Escalator can go up as well as down.

In memory of ‘De Ladder’ and in view of it’s trajectory then you should really name it:

De-Escalator.

Well I have direct evidence of mortgage financing. I was approved just pre bubble burst for €500k. Both myself and my wife have private sector jobs which have just far survived but like everyone else , who knows.

Last March in advance of the Allsop auction , we decided to get reapporved. Mortgage advisor looked for old and new paperwork. We have reasonably substantial savings to the point we could nearly buy cash , down the country. Roll forward to present. We have been pre approved by KBC up to €400k but only @ 80% LTV. , no investments , no foreign properties , no holiday homes. The primary lender AIB have yet to finalise. So thats 4 months and counting. It’s gone on so long that the original paperwork is starting to go stale (bank statements need to be renewed etc). The mortgage advisor is doing his very best and in his own words , no news is good news in so far as they haven’t said no.

My own thoughts is that considering we haven’t yet found a suitable home , interest rates are rising , we still are in no rush.

Having closely monitored the property market for the last 10 years I think that given the banks unwillingness to lend , rising interest rates and at least some residual intelligence with the buying public , that house prices will drop at least another 30% until prices align themselves to 2.5 times 1st income and 1.5 time 2nd income.

Wow! Another 30%… drop? :open_mouth:

I don’t mind personally, I’m in the same position as yourself, but do any other pinsters think this is the case Bottler? (2Pack?) It’d be great for me if that was true though (self interest… it’s a common problem in society :smiling_imp: … sorry for young families in really bad negative equity though)

I think that prices will halve from here.

Certainly another 25% from market leading prices wouldn’t be a surprise. The fact that Comical Austin wants a 20% deposit down before giving out a mortgage suggests that even he accepts the ‘new paradigm’

i cant believe this tripe is still being printed

everybody seems to be foregtting the unilateral default thats around the corner. Only then will you see a big indershooting of property values say 10% (in euros) of peak prices, maybe 15-20% for super quality properties in good locations. What people should be doing is putting their savings in gold, wait for the the inevitable default under kenny7 noonan washing machine brigade, the odd riot or 2 and only then think of converting your gold back into punts to buy their dream property 100% upfront. Of course you have to factor in all services will have been privatised or run down by then so living in ireland mightnt be so appealing to people especially to those with kids.

Activity in the market appears to have increased in recent months. It would appear from the level of new mortgages that the majority of these sales are being done with cash.

When calling a market never underestimate the decision making ability of people with large wads of cash. These people have either been very lucky or called the market successfully over the past few years.

My industry sources would confirm waht landlrod said, activity has defn picked up in the last 2-3 months substantially…
Same Industry sources would have told me that the demand wasnt coming in as much as before towards end of boom…
My own Field analysis would confirm that demand has picked up in the last few months, but only in high demand areas or where price is sub 200k (Galway)…
Number of places I have being following are Sale agreed or Sold… FACT !!!

HOWEVER my industry sources tell me that this in their honest opinion is only short term…
The do not see this demand after Oct…
That is Micro Picture for me…

Big Picture… just cannot see it bottoming in any area for obvious reasons…

Activity may have increased , I wouldn’t call landlord and FAUGH45568 out on that.

However the mortgage market 2010-2011 will shrink 60% year on year so that means it must be cash only or else largely cash with a small ‘topup’ mortgage on the primary residence in some casees.

Quite a lot of money, as much as €20bn in my opinion, has been lying around for the last 3 - 5 years waiting for the right property class investment.

But the banks are out of the game and so is anyone who has not sold the gaff and banked the cash by now. A notable blip has been caused by early retiring civil and public servants who are afraid of losing their lump sums in a bank crash. An awful lot more of these people are anticipating retiring between now and March 2012 so that may cause more blippage.

I know 2 recently retired teachers who religiously attend the O Donnellan and Joyce auctions in Galway !! I also note that these auctions do not try to sell property in Tuam or Lougrea where there is no demand. They stick to a limit of around 10-12 miles from Eyre Square.

Got approved for a modest mortgage (4.5 * earnings) a month and half ago, though am in unusual situation as LTV would be 60% approx so fairly risk free for the bank - BOI.

Over here in the UK, I have enquired about a mortgage. Basically if you cant get 25-40% deposit you get nailed for a high interest rate so its not really clever to be taking out a mortage with 10% deposit. Whats it like at home?

What’s ‘modest’ about a mortgage 4.5 times your income? I remember the early 90s when the limit was 2.5 times income.