Friday, 6 September 2019

Questions (1950)

Michael McGrath

Question:

1950. Deputy Michael McGrath asked the Minister for Housing, Planning and Local Government if there is an exception to the rule that 3% of the 10% required as a deposit must come from regular savings in the context of the Rebuilding Ireland home loan scheme in cases in which the applicant has proven an ability to pay through paying rent and can meet the deposit requirement as a result of receiving a lump sum; and if he will make a statement on the matter. [35363/19]

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Written answers (Question to Housing)

The Rebuilding Ireland Home Loan Scheme is designed to enable credit worthy first-time buyers to access sustainable mortgage lending to purchase new or second-hand properties. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first-time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate.

To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% applies to the Rebuilding Ireland Home Loan as per the Central Bank's prudential lending guidelines. Therefore, in order to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property.

Applicants must provide bank or similar statements (such as post office, credit union etc.) for a 12-month period immediately prior to making an application, clearly showing a credible and consistent track record of savings. The cash savings should be no less than 3% of the market value of the property. Gifts are permissible up to 7% of the market value of the property, where their source is verified.

Exceptions to the above can be made where an applicant/applicants can clearly demonstrate a consistent and credible record of savings or rent payment through their bank account, which at a minimum is equal to the proposed monthly loan repayment.

For prospective purchasers of newly-built properties, the availability, through the Revenue Commissioners, of the Help to Buy Initiative for first-time buyers may provide additional assistance to prospective applicants for the Rebuilding Ireland Home Loan.

Further information, including a Frequently Asked Questions section, is available on the Rebuilding Ireland Home Loan website at http://rebuildingirelandhomeloan.ie.