The Ultimate Guide to the Rebuilding Ireland Home Loan
With house prices as they are, many first-time homebuyers are availing of Government loans to secure the mortgage they need. The Rebuilding Ireland Home Loan (RBIHL) is one such scheme that rolled out in 2018.
But what exactly does it entail and who should apply? To get the full lowdown on all this RBIHL, read on!
It’s not exactly a ground-breaking scoop to say that stumping up for your first home in Ireland can be challenging.
According to a 2019 survey 65% of first-time buyers believes it’s harder than ever to shell out for an Irish home. And that was before COVID-19.
In the last few years, the Government has rolled out a number of affordable home loan schemes to help first-time buyers get their feet on the property ladder. The Help-to-Buy Scheme comes to a close in December 2021, but the Rebuilding Ireland Home Loan (RBIHL) continues to cough up the much-needed credit to folk feeling the pinch in the mortgage market.
But what exactly is on offer with the Rebuilding Ireland Home Loan and how do you know if you’re eligible?
The Rebuilding Ireland Home Loan (RBIHL) – What it Is
A Rebuilding Ireland Home Loan is a government-backed mortgage for first-time buyers. Available through local authorities, it was launched in January 2018 with funding of up to €200 million.
The primary aim of the RBIHL is to provide low-cost mortgages to those with their deposit covered and the capacity to repay what they borrow but who, for whatever reasons, have been unsuccessful in securing mortgages through traditional lenders.
Unlike the Help-to-Buy Scheme, which was focused on aiding first-time buyers to bag a new build, the RBIHL can be used to purchase a new or second-hand property or to build your own. And a further big draw? It offers up to 90% of the market value of the property.
The loan is a normal fixed-interest mortgage, which means that your monthly repayments remain the same for the term of the loan. There has been a little controversy, however, over the fact that the previous interest rate for a 25-year mortgage of 2% rose last year to 2.745% while the rate for a 30-year mortgage climbed from 2.25% to 2.995%.
As with most mortgages, its repaid by direct debit every month. Successful borrowers will also be obliged to sign up to the local authority collective Mortgage Protection Insurance (MPI) scheme and repay this monthly alongside their loan returns.
How Do I Know if I’m Eligible?
As with any Government affordable home loan scheme, there are certain criteria you need to meet to ensure you qualify for credit.
The boxes to tick include:
- Being a first-time buyer
- Aged between 18 and 70 years
- In continuous employment for a minimum of two years, as the primary applicant or be in continuous employment for a minimum of one year, as a secondary applicant.
That said, some secondary applicants who’ve been receiving long-term social welfare payments such as the State Pension, Widow/Widower/Surviving Civil Partner Pensions, Blind Pension, Invalidity Pension and Disability Allowance, may also be considered.
- Having a gross annual income of €50,000 or less as a single applicant. Joint applicants must have a total gross annual income of €75,000 or less.
- If you’re self-employed you’ll have to submit two years of certified accounts
- Being able to provide evidence of refusal or insufficient offers of mortgages from two banks or building societies.
- Having a clean credit record. As part of this, you’ll need to consent to a credit check with the Irish Credit Bureau and the courts before loan approval is granted.
- Having a deposit of at least 10% of the purchase price of the property. (If you are eligible for the Help-to-Buy Scheme, you can also use this towards your deposit.)
- Occupying the property as your normal place of residence.
How to Apply
If you fit the profile of the eligible applicant, you can apply for the Rebuilding Ireland Home Loan online or trek over to your local authority and pick up an application in person.
Figuring out the amount to apply for can be easily done using the Home Loan Calculator, which also shows you how much moola you’ll be expected to pay back each month.
After all the i’s have been dotted and the t’s crossed on the application form you’ll need to submit it along with a few other supporting documents.
Most of these relate to the section above and include:
- Letters from two traditional lending institutions confirming insufficient offers of finance
- A salary certificate
- Most recent P60 and four recent payslips
- Certified accounts if you’re self-employed
- The usual photo ID such as a copy of your current passport or drivers licence, and proof of address in the form of a utility bill or bank statement
- A completed HPL1 form stamped by Revenue
- Any forms to show you receive long term social welfare benefits.
- Photographic identification (for example, current passport or drivers licence)
- 12 months of original statements for all your bank accounts (for example, your current accounts, savings accounts, loan accounts, credit card accounts and credit union accounts)
- Proof of marital status if you are married (if divorced you must provide legal documents)
- Any other forms as requested on the application.
The Housing Agency, which works with local authorities on all things related to housing services will then assess applications. Following that, recommendations are made to the authorities to approve or refuse applications. All Housing Agency guidance is then given the once over by the credit committee of each local authority before full decisions are made.
Most decisions are made on a case-by-case basis and if your application is refused you can appeal it.
The Rebuilding Ireland Home Loan may not be accessible to everyone. And even those who do tick all the right boxes may find their request rejected. For that reason, it’s important to check the deets carefully to ensure you definitely qualify and, if you do, that you’ve properly filled out the application.
On the upside, it is one of the most affordable mortgages out there and a possible silver lining for those who’ve been finding the door firmly shut every time they approach more traditional mortgage lenders.
So, if you’ve collected the cash for your deposit, can claim to be credit-worthy and have your heart set on owning your own home-sweet-home this year, it’s surely a scheme to look into.
Still, looking for the perfect property? Why not check out some of the current great homes and land on sale around Ireland.