Annuity Loans

Annunity Loan Form (966 Kb)

Applications cannot be considered for housing loans until they have made a Bona Fide Application to both a Bank and a Building Society and have been refused by both.  It will be necessary for the applicant to submit a letter from both the Bank and the Building Society that they applied to for a loan confirming the following:-

*  the applicants income.

*  amount of savings.

*  purchase price of the house they are seeking the loan in respect of

*  the amount of the loan they were refused.

WHO IS ELIGIBLE TO APPLY?

If you belong to one of the following categories you are eligible to apply for consideration for an Annuity Loan;

(a)    Tenants and Tenant Purchasers of local authority houses who intend to return their houses to the authority on providing a private house for their own occupation under the scheme.

(b)    Persons included by a local authority in its latest assessment of housing needs or accepted for inclusion in the next such assessment, i.e. on the housing waiting list.

(c)    Tenants of one year's standing of houses provided by approved housing bodies under the Rental Subsidy Scheme e.g. RESPOND who intend to return their houses to the housing body on providing a private house for their own occupation under the scheme.

(d)    Persons in need of housing whose household income in the preceding tax year, calculated in accordance with a formula, does not exceed €125,000.00.

 

Under the formula, income will be reckoned as follows;

-       in the case of a single income household, two and a half times the borrower's income in the preceding tax year,

-       in the case of a two income household, two and a half times the income of the principal earner, plus once the other income.

Examples of how the proposed formula and limit would work in different circumstances are shown below:-

Single Income

Household

Single income

Household

Two income

Household

Two income

Household

Principal

Income

    €50,000.00

€52,000.00

€40,000.00

€44,000.00

Subsidiary

     Nil

     Nil

€25,000.00

€27,000.00

Formula

€50,000.00

 X 2.5

 

= €125,000.00

€52,000.00

X 2.5

  = €130,000.00

€40,000.00

X 2.5

  + €25,000.00

= €125,000.00

€44,000.00

X 2.5

  + €27,000.00

  = €137,000.00

Eligible

     Yes

     No

     Yes

     No

WHAT IS THE MAXIMUM LOAN AVAILABLE?

The maximum loan available is €220,000.

Subject to this maximum, a loan can amount to 97% of the price/value of the house, net of the new house grant where applicable.

WHAT ARE THE REPAYMENTS?

The repayments are paid monthly and the amount payable is based on the amount borrowed and the interest rate applicable.

Repayments may vary from time to time depending on the interest rate changing.

The method of repayment is by way of Standing Order.

WHAT IS THE RATE OF INTEREST?

The variable interest rate is subject to change and repayments will go up and down, depending on the change in interest rates.

Fixed Interest Rate is also available subject to certain conditions.

WHAT IS THE REPAYMENT PERIOD?

New Houses                       -  30 years

Second-Hand Houses           -  20 years for a house built before 1950

                                        -  25 years for a house built after 1950

A reduction in the repayment period may also apply depending on the age of the applicant(s).

CAN I CLAIM TAX RELIEF?

Tax relief is deducted at source and your monthly repayments will include this deduction.

WILL I GET THE NEW HOUSE GRANT?

No.  The New House Grant was abolished by the Department of Environment and Local Government on the 13th November, 2002.

HOW LONG MUST APPLICANT(S) BE EMPLOYED?

The primary earner on the application must be in continuous employment for at least two years (this can be self employment) and the second applicant must have at least one year.  Certain exceptions can be considered.

WHAT AMOUNT OF SAVINGS IS REQUIRED?

The amount of savings required must cover:

*  your own legal expenses.

*  land registry fess and miscellaneous expenses.

*  percentage of Limerick City Council's legal expenses (i.e. 0.75% of the    purchase price plus VAT). 

*  3% of the net purchase price of the house.

NOTES:

(1)    Annuity House Purchase Loans are only advanced to first time owners.  In exceptional circumstances loan applications may be provided to enable existing home owners purchase a larger house for the purpose of relieving unfitness or overcrowding in the existing house and if failure to give a loan could cause hardship.

(2)    The selection of the house is your own choice but Limerick City Council must be satisfied that it is reasonably priced, of suitable size and standard to cater for the applicant’s needs and free from structural defects.

(3)    An existing house must have hot and cold water systems, a fixed shower or bath and an indoor toilet.

Jennifer Frahill
Tenant Purchase Section
Social Policy & Housing Section
Phone: (061) 407121
email: jfrahill@limerickcity.ie


Last update:20/09/2012

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