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The Martin Shortt “HomeMaker Nestegg”
“The most innovative approach to helping property purchasers in an economic downturn”
You can purchase a property of your choice from Martin Shortt Auctioneers, take possession of the property NOW and close the deal in 2 years! That’s right, purchase a property now RENT AND MORTGAGE FREE FOR 2 YEARS allowing you to save a 10% deposit over that time.
The “HomeMaker Nestegg” was initially devised to help first-time buyers to get onto the property ladder: First-time buyers face a particularly difficult scenario – it can be extremely difficult to save a 10% deposit to buy a property, while paying rent at the same time. In the current economic climate, many sellers (particularly builders) are finding it very difficult to move property, but their interest costs remain and in some cases, these costs threaten to put the builder out of business. The property market has become a “buyers market”.
The Martin Shortt “HomeMaker Nestegg” has been carefully devised as a stepping-stone to help the first-time buyer take the first steps to becoming a homeowner. To find a helpful solution for first-time purchasers and one that builders could agree to, Martin Shortt Auctioneers have devised the “HomeMaker Nestegg” .
What’s the Catch?
“What if I buy now and in 2 years time the property is worth less than I initially agreed – where will that leave me?”
This is an important question. We wanted to make sure to protect buyers from falling property prices.
The Solution
If in 2 years, the price of the purchased property goes down in value, THE PURCHASER WILL PAY THE MARKET VALUE AT THE TIME OF CLOSING THE DEAL – that is the market value in 2 years time.
If on the other hand, the value of the property goes up, the purchaser will pay the currently agreed purchase price. This means that any increase in property prices will benefit the buyer and if the value goes down, the buyer will pay the lower price.
How it Works
Move into your new home now, save for your deposit on a monthly basis (in the form of monthly deposit payments to the vendor) and complete the sale in 24 months. The purchaser pays the remaining balance of less than 90% in two years via a mortgage. Buy at today’s prices and pay in two years.
A Purchase Contract is drawn up as normal, but the completion date shall be two years from the outset.
Paying the required deposit
An advance payment of €5,000 is required and is considered as part of the deposit.
A monthly payment, equating to 10% of the property value, is divided by 24 and is paid to the vendor each month for 24 months.
On closing the purchase, all deposits paid will be deducted from the price of the property.
For example
Property Price: €240,000
Deposit of 10% €24,000
Monthly payment to vendor is €1000 Per Calendar Month (i.e. €24,000/24 months)
Therefore after two years the buyer will have already paid in excess of 10% deposit to the vendor.
Lowest price Guarentee
Initially, when the purchaser wishes to buy the property, an independent valuation shall be carried out and the purchase price will be agreed. If the value of the property goes up after 2 years then the price agreed initially shall stand and this is the price that the purchaser will pay.
If in the other hand the value of the property has fallen in value, then this lower price is paid (Therefore the deposit paid will cover more than 10% of the property price).
Example 1 – Property Value Falls
Market Valuation in 2 years €230,000
Balance Due €230,000
Less Deposit Already Paid €29,000
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Mortgage Required €201,000 Property Value: €230,000, LTV 87.39%
Less Tax Relief at Source* 240.69
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Nett Monthly Repayment €872.85
Example 2 – Property Value Increases
Market Valuation in 2 years €250,000
Balance Due €240,000
Less Deposit Already Paid €29,000
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Mortgage Required €211,000 Property Value: €250,000, LTV 84.4%
Less Tax Relief at Source* 252.67
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Nett Monthly Repayment €916.27
Above monthly payments are based on a 5 year fixed rate** of 5.75% (6.0% APR) over a 35 year term.
Either way, THE BUYER TAKES FULL ADVANTAGE OF THE MARKET. Also, the mortgage payments will be less than the monthly deposit payments.
Completing the purchase
The maximum completion term under this is twenty four months although the purchaser has the right to complete at any time beforehand, all moneies paid shall be deducted from the purchase price at the time of completion and the balance will fall due.
Advantages
- Minimum 10% Deposit has already been paid within 24 months
- Saving on two years rental costs – this is a very substantial saving
- The purchaser builds a proven track record of ability to pay a mortgage which the banks shall look upon favourably
• Lowest price guarantee – You pay the lowest price, either
• (a) the agreed price or
• (b) the revised down Market Value at the time of purchase.
Disadvantage
In the event of the purchaser does not wish to proceed at any time, they are free to walk away from the contract. In this scenario, any money the buyer has paid will not be refundable (although the buyer would probably have been paying rent on another property anyway, so there is little material loss in this case).
If the buyer fails to make the montly deposit payment to the vendor, they will have forfeited their right to the contract and the contract becomes null and void. All prior deposit payments made by the purchaser will be lost.
Can I Buy Any Property I Want Under the “HomeMaker Nestegg” Option?
Please contact us regarding any property you want to purchase under the “HomeMaker Nestegg” . We have a list of interested vendors and can also approach a vendor on your behalf.
Act Now
“Take the opportunity of a lifetime in the lifetime of the opportunity”.
This particular “window of opportunity” will not be available indefinitely. Many buyers have already taken advantage of the “HomeMaker Nestegg” .
The “HomeMaker Nestegg” is time-limited depending on economic activity. When the property market improves, vendors will be less likely to agree to such a good deal for intending buyers.
If you feel that the “HomeMaker Nestegg” is right for you, then make sure to TAKE ACTION NOW. We will endeavour to help you find the home of your dreams, at a price you can afford.
Warning: You may have to pay charges if you pay off a fixed rate loan early.
Martin Shortt is regulated by the Financial Regulator.
*Tax relief at Source is based on a FTB (First Time Buyer) Couple for the first year of the mortgage.
** You may have to pay additional charges if you pay off a fixed-rate loan early.