Skip to main content

How the NAMA scheme works...

HOME buyers get mortgage approval from either Bank of Ireland, Permanent TSB or EBS.

The buyers then find a property they want that is part of the NAMA scheme.

They will need a deposit of at least 10pc of the value of the property.

If they are buying a €200,000 house, this means the buyer will need a deposit of €20,000.

So the house hunter borrows €180,000 from the bank and repays the mortgage based on this amount for five years.

The scheme works by NAMA deferring 20pc of the value of the property, which works out at €40,000 in this case.

But for the first five years the homeowner makes payments on the full €180,000 they have borrowed.

If, after five years, when the property is revalued under the scheme, the property value has fallen, then the homeowner will end up not having to pay the full amount of the mortgage. This is because NAMA has deferred up to 20pc of the property purchase price.

If the property falls in value by 20pc, then the €40,000 will be written off by NAMA.

If it falls by 10pc in value, then €20,000 of the deferred amount will not have to be paid.

What this means is that after five years if the property has collapsed in value by 20pc, then the mortgage will fall from the original €180,000 borrowed to €160,000.

In fact, what the buyer owes will be even lower than this as they will have already made repayments on the €180,000.

Report - Irish Independent
Labels:

Popular posts from this blog

Property Crash Homes For Sale...

Hundreds of repossessed homes in Ireland to be sold by auction... UK property consultancy Allsop to hold auction in April at Dublin's Shelbourne hotel: Flats in Ireland that could have fetched €150,000 in the Celtic Tiger years are to be put on the market for as little as €25,000 (£21,000) in the country's first ever mass auction of repossessed homes. And, in a sign of how wide the property crash is, the latest item to turn up in liquidation sales in Dublin is a job lot of 15 cranes, including a pair towering over Anglo Irish Bank's half-built headquarters in the city's docklands. "Tower cranes were among the most sought-after heavy plant and machinery 10 years ago," Ricky Wilson of Wilsons Auctions says. "You couldn't buy them quick enough. Now they are left idle for two or three years on sites." He has 15 cranes worth €500,000 going on sale on 26 March, with German, Dutch and Polish buyers expressing interest. But it is the auction ...
Read more

Young, Irish And Out Of Here...

As the government continues to pump billions into our much discredited banking system, many Irish people unable to find work here are facing into a future outside of this country. John Downes, News Investigations Correspondent, spoke to some of the new Irish diaspora about their recent experiences of emigration... By any stretch of the imagination, they were a startling set of figures, prompting echoes of a past which we thought we had left behind. According to ESRI data released last week, we can expect net emigration of 60,000 in the year to this April – and a further 40,000 by April 2011. That's almost 1,000 of our best and brightest leaving every week. Yet the ESRI's predictions are simply the latest – if most stark – indications of a return to mass emigration among Ireland's unemployed, as the downturn has continued to take its toll. In September, for example, the Central Statistics Office revealed that Ireland witnessed a return to net emigration for the first time si...
Read more

More Allsop Fire Sales...

Allsop plans five fire sales a year... THE UK auction house Allsop and its Irish affiliate Space plans to hold up to five distressed property auctions a year following the success of its first auction last Friday when 81 out of 82 lots were sold for a total of €15 million. The next auction is scheduled for July 7th, when 200 lots will be auctioned, including apartments, tenanted shops, farms and houses. According to Space director Stephen McCarthy, his company is being inundated with requests from receivers, banks and individuals who want to sell their property fast. Many of the properties in Friday’s auction were sold by Bank of Scotland Ireland and it’s believe there is plenty more of this stock to sell. These include apartments in the Castleforbes development in the Dublin docklands, as well as units in Dublin 8 and in Castleknock. However, the agency is also considering taking on more agricultural land. One lot, a 55 acre farm in Co Wickow sold particularly well, making €42...
Read more