Fine Gael TD for Dublin Fingal, Alan Farrell has said it is positive that the new mortgage guidelines issued by the Central Bank do not apply fully to those who already own a house and are in negative equity and that at least some flexibility has been offered to first-time buyers.
“I have previously called on the Central Bank to ensure first-time buyers are not unfairly penalised for a problem they did not create in relation to its new mortgage rules and I am pleased that first-time buyers are not subject to a 20% deposit on mortgages up to the value of €220,000. In saying that, I do have reservations in relation to the fact that a first-time buyer will be hard pushed to find a home to buy in Dublin Fingal, particularly if they have a young family, for €220,000 or less. However, I understand the Central Bank’s rationale for doing this in order to ensure a balance is created to allow sufficient access to mortgages while also working to prevent the property disasters of the last decade from reoccurring.
“I am pleased that the mortgage guidelines provide an exemption for those who have bought their first home, but now find they are in negative equity, from the loan to value restrictions. Instead of being subject to these restrictions, homeowners in negative equity will be able to negotiate directly with the bank on their options for taking out a home loan. The new loan to income guidelines will still apply in these cases whereby the maximum mortgage available will be limited to 3.5 times a person’s gross salary.
“Many people in the North County, particularly young families who have already bought a starter home, find themselves in negative equity but want to move on or trade up. I am glad to see that the Central Bank has allowed a certain degree of flexibility for people who find themselves stuck in a house they never intended to stay in for more than a few years.”