Possibility of Second Mortgage?

E

ELG

Registered User
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13
Hello everyone,

I purchased a 2 bedroom apartment in January 2009, I have missed no payments so far and have just over 27 years left on my mortgage. My mortgage is with Haven and I'm 28 years old, single with no kids.

In the past few months I've had my working week reduced to part time, 20 odd hours a week. My savings are almost depleted and soon I will struggle to cover the mortgage.

My plan is to rent out my apartment, by talking to others in the area and looking at rent rates online I should be able to cover the monthly mortgage completely and have already had some interest.

Second Mortgage: There are 1 bedroom apartments for sale beside my place of employment priced to sell at €79,000, I have roughly €5,000 left in savings. By using an online mortgage calculator my repayments will be approx under €400 monthly, this would be a huge saving for me monthly, but would involve taking on more debt, sounds crazy I know but this would leave me with about €400~€500 more in my pocket monthly.

My question is what are the chances of being granted a second mortgage? Is it even possible? Haven only deal through a Mortgage Broker, would it be worth my while explaining my situation to a Mortgage Broker or do you think
I would be wasting my time?

Any advice, help, input would be greatly appreciated.
 
Honestly I would say zero chance. Why not rent beside where you work. Buying another property and then if you get laid off you will be more in debt.

Your crazy to be even considering it.
 
Thanks for your reply. Currently I'm not in any debt. My mortgage is around €900 a month. If I rent it out I should get €1000~€1100. Renting an apartment near my job would be at least €600~€700. A 25 year mortgage on the same property would be €400 a month. In the event of being laid off I could afford €400 monthly. It's a complicated scenario, it makes sense to me but not anyone else.
 
I can't see a bank giving you a second mortgage given your existing mortgage and your part-time job. also I understand that several banks wont consider mortgages on one bed apts. you say you are not in any debt, what you really mean is that you are not in arrears as your mortgage is your debt. on paper your figures work ok, its just too risky for a bank to lend to you. unless you don't want more than 20hrs work per week, maybe try and get a better paid job , full time, or rent a room out as the issue is really your reduced income and depleted savings.
 
@EPG: Bank won't give you the funds anyways so it's an irrelevance (for right now at least). What's the rush to buy again? Your fortunate if you can rent out your current apartment and keep the mortgage covered. However, I would suggest you go and do that first. Rent rates advertised and what's actually achieved are 2 different things. Also, have you allowed for periods when it will be vacant - also tax payable? Will this have any implications for your own mortgage?

You've already seen how things can not go as planned on your first apartment/mortgage. Surely that should encourage you NOT to rush in to a second property?

You say your not in debt - but you are - it's just that you have not missed any payments (yet). However, you are 'in debt' for the capital sum borrowed - and your looking to add to this burden. Irish properties are not going anywhere anytime soon. Take your time and know exactly how things will work out by renting in the first instance - and building up your savings (to put towards second property). There will be no 'lift' in irish property for some time to come so it's not as if your missing out on anything.
 
In fairness to the OP they don't seem to be fearing missing out on a rise in property values, just noticing the benefit to their monthly outgoings of buying rather than renting. Having said that, there isn't a chance of a mortgage for the OP for another apartment, while it looks to you more affordable, the problem is you are using a monthly measure on a 25 year engagement. Things change and you have no cushion - it is just too risky.
 
No chance mate, I have a 2 bed house and am paying €630 a month on the mortgage, the wife and I are both working (46k & 32k) have no debts/ credit cards and we enquired about a mortgage for a family home.

We were told, two weeks ago, we would have a strong hand if we could prove regular savings and have a deposit of at least 15% of purchase price of new property, remain debt free, perm jobs and prove we could pay both mortgages as they don't count rental as income, which is fair enough.

If you do rent you apartment make sure you advise your insurance company, secondly could you move home for a while and rent your apt, this way you could save money or overpay your mortgage which would give you breathing space until you get your hours back up.
 
ELG said:
Hello everyone,

I purchased a 2 bedroom apartment in January 2009, I have missed no payments so far and have just over 27 years left on my mortgage. My mortgage is with Haven and I'm 28 years old, single with no kids.

In the past few months I've had my working week reduced to part time, 20 odd hours a week. My savings are almost depleted and soon I will struggle to cover the mortgage.

My plan is to rent out my apartment, by talking to others in the area and looking at rent rates online I should be able to cover the monthly mortgage completely and have already had some interest.

Second Mortgage: There are 1 bedroom apartments for sale beside my place of employment priced to sell at €79,000, I have roughly €5,000 left in savings. By using an online mortgage calculator my repayments will be approx under €400 monthly, this would be a huge saving for me monthly, but would involve taking on more debt, sounds crazy I know but this would leave me with about €400~€500 more in my pocket monthly.

My question is what are the chances of being granted a second mortgage? Is it even possible? Haven only deal through a Mortgage Broker, would it be worth my while explaining my situation to a Mortgage Broker or do you think
I would be wasting my time?

Any advice, help, input would be greatly appreciated.
Click to expand...

As is the standard remark, you ignore tax on your rental income. Assuming you'll max out your tax credits and standard rate band at a later date, you could have to pay 52% tax on that rental income (after deductions).

Revenue are hunting down anyone with let property now, with NPPR and so on it's never been easier for them to identify the non-compliant landlord, possible interest and penalties are huge.
 
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