The Complete Guide to Rebuilding Ireland Home Loan Scheme
Owning a house in Ireland does not need to be expensive and strenuous at all. Thanks to Rebuilding Ireland Home Loan Scheme.
According to what is still available from local authorities, it is a government-backed mortgage scheme for first-time borrowers in Ireland.
You can use this scheme to buy a new or secondhand property. The plan allows all the Irish to borrow 90% of the value of the house they are looking to buy.
However, the maximum market value should not be over €320,000 in Dublin, Cork, Galway, Kildare, Louth, Meath, and Wicklow and over €250,000 in the rest of the country.
The purpose of this scheme was to make homeownership more affordable for first-time borrowers.
Eligibility criteria for the Rebuilding Home Loan Scheme
First off, this scheme is not applicable if you are not a first-time borrower. If you do not own a house anywhere in Ireland or outside the Republic of Ireland, you can apply for this scheme. However, you will have to meet the following conditions:
- It would help if you had come of age, and the maximum age should not be over 70-years-old.
- There should be no break in your employment history for the last two years if you are a primary earner, and you should have steady employment for one year if you are a secondary earner.
- Your gross annual income should not be over €50,000 in the case of a single applicant and €75,000 in the case of joint applicants.
- Self-employed are also welcome. However, you will have to submit certified accounts for two years.
- You can use the property only for residential purposes.
- The floor area must not be over 175 square meters, even if you want to build a house from the ground.
- The property value must not exceed the market value applicable in that particular country, even if you build the house from the ground.
- You will have to allow for Irish Credit Bureau Check.
What documents do you need to process the application?
Your application will be rejected if you miss submitting any of the following documents. Make sure that you have made all arrangements to have these documents ready:
- You will have to submit evidence of insufficient offers from banks and building societies.
- Current passport or driving license as an identity proof
- The latest utility bill or bank statement as a proof of address
- Original salary certificate, proof of income, and four recent payslips.
- Account statements of the previous 12 months
- Original saving statements of the last 12 months.
- Original loan statements, credit card statements, and credit union statements of the previous 12 months.
Note that these listed documents are compulsory to submit along with your application form. However, when you submit or dispatch the application to the local authority, you may be asked for additional documents wherever necessary.
Are these loans cheaper than standard mortgages?
There is no straightaway answer to tell whether these loans will cost you a fortune or save you some money because there are loads of factors that decide it.
Although the maximum property value, including self-built, should not be over €320,000 and €250,000 depending on the location you have chosen, you cannot borrow more than 90% of the market value that amounts to €288.000 and €225,000.
However, it depends on other factors too. Your current obligation will also be taken into account, along with your income source.
Note that current bad credit loans and other credit unions’ obligations can affect the maximum amount of the loan you can borrow. The lower the responsibilities, the more you will be able to borrow.
Use a home loan calculator to get a rough estimate.
These loans come with fixed interest rates. They are categorised into two types:
- 2.745% fixed for up to 25 years (APR 2.78%)
- 2.995% fixed for up to 30 years (APR 3.04%)
APR is subject to change because the rates will be decided based on your financial factors and the date you put in the application.
The interest rates will remain the same throughout the year, and so the monthly repayments. It is why the loan under this scheme will be much more affordable.
However, if you switch to a variable-rate mortgage, you will have to pay brokerage fees. It is also applicable when you pay off the whole or part of your mortgage early.
How can you apply for these loans?
If you think you are eligible and have all documents required, and can manage to pay off the debt on time, click here to get the application.
Make sure that you have filled in all particulars and information you submit are accurate. Any discrepancy in the form can lead to the rejection of your application.
Once you fill-up the entire application form, please take it to the local authority. It is advised to submit the application form in person.
The local authority will review your application and let you know of their decision in writing. For all queries related to the application, you will have to contact your local authority.
Will the age of the applicant determine the term of the loan?
Although the maximum term of the loan under this scheme is 30 years, it will go down if you are a senior applicant. For instance, if you are 35-years-old when applying for these loans, you can qualify for the maximum term. If you are 45-years-old, the duration of the loan will not be over 25 years.
The same goes in the case of joint applicants. If any of you is 45-years-old, you may be able to borrow only for 25 years.
What if there is a break in continuous employment due to Covid-19?
As you know, you need to be in continuous employment for two years as a primary earner and for one year as a secondary earner; it will not be deemed a break in your profession if you lost your job in the wake of Covid-19.
It is paramount to note that your employment needs to be continuous. It does not mean that it should be permanent employment. That is why you can be in the same career or more than one employment for that period where a break did not last more than one month.
However, your application will be disqualified if you have multiple casual employments. Suppose you are self-employed and fail to submit accounts for the whole two years to the local authorities.
If you are on a probation period, you will likely be requested to submit additional documents to support your application, and your local authority can demand its completion before making the final decision.
The bottom line
If you do not own a house, now is the time to apply for a mortgage under this scheme. It is undoubtedly more affordable than standard mortgages available from other financial institutions.
Since this is a government-backed home loan scheme, interest rates are much lower. Find if you are eligible, and then put in the application form.