Wicklow County Council provide a House Purchase Loan (Annuity Loan) to persons wishing to purchase a house (new or previously occupied), or build a house. This loan is for those who cannot get a loan from a building society or bank etc. Applicants must prove that they have sought a mortgage from two lenders and have been refused funding. If you are applying for an Incremental Purchase Scheme you do not need proof of Loan Refusal from two outside Lending Agencies.
In order to qualify the applicant must meet an income eligibility test which takes into account the incomes of the principal earner and the subsidiary earner in the household.
The maximum loan amount payable and eligibility criteria are set by the Department of the Environment, Heritage and Local Government and may be altered by Regulation. The same limits apply to local authorities.
The maximum amount of this loan is currently €200,000 or 97% of value of house to be purchased.
The maximum term of loan is 30 years, repaid by annuity of principal and interest. All payments at monthly intervals.
Repayments cannot exceed 35% of disposal after tax income.
Applicant’s income must be less than €50,000 for a single income household and less than €75,000 for a double income household. Loan approval is based on the applicant’s ability to repay.
Applicants must have a good credit standing with satisfactory credit record.
Applicants must have a strong saving record.
Primary earner must have two years continuous permanent employment/ self employment. Second applicant must have one year continuous employment.
Applicants must be a first time buyer being persons who either individually or jointly have never purchased or built a house. (There are certain exceptions in relation to Divorced or Separated Applicants).
Preparing to apply for a House Purchase Loan:
Where a prospective applicant intends to fund their purchase using a House Purchase Loan your chances of success are increased if you:
- Have your wages mandated into your bank account or at least lodge their salary cheque every week.
- Demonstrate you a credible and consistent savings record.
- Demonstrated you have a good financial management by paying their credit cards on time and keeping their bank accounts clear of unpaid or returned items and overdrawn balances.
- Other borrowings will significantly reduce their House Purchase Loan borrowing capacity so no other borrowings at this time is their best case.
- Where you have had borrowings previously or now, a satisfactory credit history for the last five years is essential.
Without this, we will automatically decline the application. Without this preparation, a recommendation to decline is more likely.
Main Reasons for Decline:
To date, the most usual reasons for refusing a loan application have been:
- Net income ratios is too high – that is to say that the borrower would not be able to repay the loan each month in addition to meeting their day to day living expenses.
- Bad credit history – the ICB report has been revealed a previous borrowing which was unpaid or in arrears.
- Unsatisfactory savings or rent record.
- Unverified income – lodgement which cannot be explained or are out of sequence with salary certified documentation.
- Insufficient employment income to borrow at the level required to secure purchase.