1. How do I know if Mortgage to Rent is the right housing solution for me?
Reaching the decision to give up ownership of your home is not an easy decision and care must be taken to ensure that it is the right decision for you and your family. You must take independent legal and financial advice in order to make an informed decision.
The Money Advice and Budgeting Service (MABS) will assist you in obtaining relevant independent advice through the Abhaile service. MABS may be contacted by telephoning 0818 07 2000 from 9am to 8pm Monday-Friday.
Alternatively, your lender is obliged to pay up to €500 for legal advice. If you wish, your lender will also pay €250 for you to get financial advice from an accountant on the Mortgage Arrears Information and Advice Service panel.
2. What are the steps in the Process?
3. What role do local authorities play in the scheme?
4. Can I choose who will buy my home?
5. Who will value my property to determine the price?
6. What is the purchase price of my house likely to be?
7. Is my outstanding mortgage debt (i.e. residual debt) written off under the Mortgage to Rent Scheme?
8. What happens if the property price goes above the limits allowable under the scheme during the process?
9. How is the rent calculated?
You as a social housing tenant will be charged a rent based on your income. This is calculated by the local authority using the differential rent system. It is based on your ability to pay, i.e. the lower your income the lower the rent. Under MTR, whether your landlord is the local authority or an Approved Housing Body you will be charged the same differential rent.
10. Who will maintain and repair the property once it’s sold under the Mortgage to Rent Scheme?
11. Could my house be sold during the term of the lease?
12. What if I change my mind during the application process?
13. What are my options if my Mortgage to Rent Application is not successful or if I am ineligible for Mortgage to Rent?
There are other housing support options available immediately through the local authority for borrowers who lose their homes such as the Housing Assistance Payment (HAP) programme whereby the prospective HAP tenant (you) can source a HAP property to rent, within certain rent limits.
14. I am a joint borrower. Can I avail of Mortgage to Rent if the other borrower is no longer living in the property?
15. If I cannot get in contact with the other party to the loan, can I avail of Mortgage to Rent?
16. If my circumstances improve, can I remain a social housing tenant?
17. Can Mortgage to Rent form part of an insolvency arrangement?
A list of PIPs can be located on backontrack.ie/PIA
18. Can I apply for an insolvency arrangement if I complete the Mortgage to Rent process?
More information on debt solutions can be found on backontrack.ie
19. I am bankrupt. Can I avail of a Mortgage to Rent solution for my home?
20. Can I buy my property back if my circumstances improve?
Not Discounted Purchase Price
(Property Owner purchases the property at Open Market Value, less repairs)
Buyback – Option A Only
• You have the option to buy back your home after 5 years (or earlier if agreed but, only at the discretion of the Property Owner) at the Open Market Value (OMV) on the date of the buyback. The property cannot cost less than the price that the Property Owner paid for the property.
Discounted Purchase Price
(Property Owner negotiates a discount with the Lender and purchases the property at a discounted price i.e. below Open Market Value)
Buyback- Option A
You have the option to buy back your home after 5 years (or earlier if agreed but, only at the discretion of the Property Owner) at the Open Market Value (OMV) on the date of the buyback. The property cannot cost less than the price that the Property Owner paid for the property.
Buyback – Option B
You have the option to buy back your home after 5 years (or earlier if agreed but, only at the discretion of the Property Owner).
You will pay:
• Price (discounted) that the Property Owner paid for it;
• Cost of repairs incurred by the Property Owner in bringing the property up to private rental standards during the period of the tenancy;
• Cost of finance by the Property Owner on the property transaction and ongoing during the period of the tenancy
• Legal costs incurred by the Property Owner.
• If you sell the property within 20 years you will have to pay the Property Owner a percentage of the proceeds of the sale – known as a clawback. The percentage is the percentage difference between the sale price and the Open Market Value of the house. This amount will be reduced by 5% each year after you have bought back the property.
• If you sell you sell your home after 20 years, you will not have to pay any clawback to the Property Owner.
• The Open Market Value at the time you sell your home is used to calculate the amount of clawback due. If the gap between the original sale price and the Open Market Value has narrowed, the amount of clawback will also reduce. If the proceeds of the sale of your home are below the initial price paid, you will not be liable to pay the Property Owner a percentage of the proceeds of the sale.
The buyback (Option A or B) will need to be specified in a separate legal agreement between you and the Property Owner