The National Treasury Management Agency (NAMA) is introducing a deferred payment scheme for mortgages. This scheme is expected to be financially beneficial not only to homebuyers but also the government because of the VAT it will get from property or apartment purchases using this payment scheme.
This scheme will initially be introduced on a pilot basis but if it proved to be successful, it will be extended. This is according to NAMA’s chief executive, Brendan McDonagh. NAMA is expected to sell hundreds of apartments this coming October under this new financing plan. The payment scheme will be offered to first time homebuyers. NAMA will be working hand in hand with banks like AIB and Bank of Ireland.
This payment scheme is deemed to be helpful to homebuyers in avoiding negative equity. NAMA takes into consideration the financial dilemma of homebuyers in case of property value decline. So what NAMA will do is to waive the NAMA repayment requirement that homebuyers need to pay as part of the loan. Bank payments will have to be paid as normal. However, if there is an increase in the price of the property, the homebuyer will still need to repay NAMA and the partner bank.
NAMA’s proposed mortgage financing plan is yet to be signed off by the Department of Finance and the Department of the Environment according to Frank Daly, NAMA’s chairman. But hopes are high that first time homebuyers will already be able to take advantage of this payment scheme by October.
