Mortgages In Ireland Are Getting Tougher To Get Approved For
We all saw it coming. The housing bubble in Ireland is about to get burst. In fact, it’s already being burst and is probably in it’s soft landing phase at the moment. Dead cat bounce anyone? It was silly for anyone to assume that their property investment could have gains of 20% year after year. Something had to give…
Why would a bank give a mortgage to a property investor at a 5% rate of interest when they could make their own property investments and make 20% ?
What is happening in the US is about to leak over to Europe, especially Ireland. With all the defaults and foreclosures, banks are probably going to tighten up credit. Here is our prediction:
- Banks tighten up credit to a realistic level
- People will only be able to get mortgages at half of what they can get now
- As a result, noone will be able to afford a house at current market value
- Property developers and property investors will have to drop prices to what people can afford.
- People can buy houses at a more reasonable rate
- Those who bought a shoebox in the “boom” will have a bad taste left in their mouths.
This also paves the way for a HUGE increase in rental properties as a result of FTBs (First time buyers) not being able to afford a home and investors not being able to rent out.
This is going to be an exciting few years for the Irish property market. Mortgage comparisons will have all but lost their appeal. In the coming years, those lucky enough to be awarded a mortgage will jump at the chance.