What to do about financing home purchase?
For First Time Buyers, buying a first home is a daunting task!
Where do you start?
Probably scanning estate agents websites, a big improvement on 40 years ago, when buyers had to go from estate agent to estate agent on foot, hail, rain or snow and collect a bunch of sales brochures and take then home or back to a flat and try to pick the best, before making an appointment to view a property, thankfully things have moved on. Now you can scan digital files on your computer and get a bird’s eye view of a property inside and out as estate agents have embraced the digital age.
However, starting with property websites is probably jumping ahead a little….
The first place to start is with the lender, sadly there are few lenders available in the Irish market, all the Building Societies, the dedicated home lenders for over a hundred years have been gobbled up by Banks, on the face of it, why should this be a problem?
The answer lies in the title, ‘Banks’ you see banks have a duty to maximise the profits from their activities for their shareholders.
Sadly in an effort to grow and generate even more profits, Bank Boards and their management teams seem to have forgotten about balancing their duty to generate profits with a duty of care to innocent borrowers and created a perfect property and finance storm, which resulted in a property and finance crisis this country ever faced.
Sadly, the bad practices of less than 10 years ago, appear to be rearing their heads again, Government controls through the good work of the Central Bank must be continued and even go one better, lets draw a distinction between bank lending and home loan lending.
If we are to lay a solid foundation for a stable housing market, the government should consider the establishment of Financial Companies dedicated to financing house purchase on a ‘Not for Profit’ basis.