Confused - Banks 80% + My 20% deposit?

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Butterflygirl83

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I know this probably sounds like a ridiculous question but someone may be able to help clarify it for me!

So I want to borrow 135k mortgage from the bank. I am a second time buyer so I will need the 20% deposit requirement. Is the amount I am applying for (135k), the banks 80% and I need to provide 20% of 135k to make up the full 100%? This would amount to a €27k deposit on 135k. So my total going forward to purchase the new property would be €162k?

Or

I am I getting up the 20% deposit of 135k and subtracting that amount from the total the bank are giving me, leaving me to repay €108k of a mortgage?

Thanks.
 
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If the purchase price of the property is 162K then the bank will give you 80% of that, which is 129,600 and you have to come up with 20% of the 162K which is 32,400.

If the purchase price of the property is 168,750, then the bank will give you 80% of that, which is 135,000 (the amount you want to borrow) and you have to come up with 20% of 168,750 which is 33,750.

if the property cost is 135,000, the bank will give you 80% 108,000 and you need to put up 27K.

How much have you saved?
 
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if you wanted to borrow 135k as the 80% then your 20% would be 33750 giving you a total of €168750.00
 
No the new property is 205k but I'll have 70k coming from the sale of my current property after paying off the mortgage on that. I only need 135k mortgage from the bank plus my 70k to be able to buy the new property.
 
Yes I will be putting all the profit made on the current house into the new one but which of the above is correct?
 
Neither of your first statements is right: It is 20% of the Full House price the bank asks for. Then a mortgage (minus whatever other cash you have) for the remainder.

So if you have the 70k that will form your deposit and a part of the purchase, so you only need to apply for 135k for the mortgage.

If you didn't have the 70k, you would be needing 41k (the 20% of the house price) and then applying for 164k (80% of house price) of a mortgage.

You pay a refundable booking fee (a couple of k) to the estate agent when sale is agreed.
When you exchange contracts your solicitor usually gives 10% (minus the booking fee already paid) to the seller's solicitor. So you will need 10% cash of the house price at this point.
The bank gives you the mortgage cheque, you get the rest of your cash put it in your solicitors account. Then all that money is passed to the seller's solicitor at 'completion'.
 
Also, I have more than the 20% deposit but it's tied up in this property until it's sold and the bank isn't allowing me to use it against the new mortgage so I need to get the 20% deposit from somewhere else. Since they don't do bridging loans anymore, I'm in a bit of a dilemma. I don't have 27k to hand.
 
Oh I see, you have a different problem then. Can you sell your house as soon as possible, then rent until you buy your new place?
20% of a €205k house will be 47K deposit.
 
sadie said:
Oh I see, you have a different problem then. Can you sell your house as soon as possible, then rent until you buy your new place?
20% of a €205k house will be 47K deposit.
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See this is where I'm getting confused with all the figures... We were told by the mortgage adviser in BOI that the deposit we need on 135k is 27k? She was saying something along the lines of, we only need 65% of the value of the house from the bank since we are getting up the rest towards it. So is this not correct?!
 
If you asked for a mortgage for 137k in total, then yes your 20% would be 27k. Is the Bank aware of the fact that your other house isn't sold, and won't be sold when you buy the new house? Is your other mortgage with BOI?
You could go back and have another talk with the mortgage advisor and make it clear to her your situation.
You could ask her to email it to you so you have it in writing in front of you. It would wreck your head alright.

Once you have gone through the process of actually applying for the mortgage (supply P60's, payslips, savings and current account, details etc,) and then it will become clearer what you can afford based on your current ability to repay a mortgage. Then you will have the security of the actual figures they will lend you, and they will give you a guarantee on 3 or maybe 6 months it is now. If a few months have passed they will ask for recent payslip and bank statement again just before they give your solicitor the cheque.
 
Thanks for all your advice Sadie.

Yes the bank is fully aware of the situation with selling our house ect. Our current mortgage is with BOI too. We thought it would be easier going with them because of that but I didn't realise the whole thing would be so difficult! Im not good with this side of things unfortunately. I have emailed her, asking her to explain it in more detail as we are confused with the figures. Her reply was pretty vague and just went on about us needing 65% of the value of the new house. Should I approach another lender or am I just wasting my time?!
 
The 20% deposit in your case is irrelevant as you are actually putting more than 20% towards the purchase of the new house.

The problem is you don't actually have the amount you are putting towards the purchase until your own house is sold so you won't be able to complete the purchase of the new property without the 70k. If you are going ahead and signing contracts on the new house you will need to give the solicitor 10% of the purchase price i.e. €20.5 which in theory comes out of your 70k profit from sale of first house but if you haven't it sold then that is a problem.

If you had unconditional contracts for sale in place then there might be some chance of getting bridging of the 20k needed to pay solicitor on signing of contracts for new house but otherwise I don't know where you are going to get the extra. Even if you get it how will you complete the purchase as the balance of your own money 70k less 20k deposit = 50k will need to be paid over together with the bank drawdown of 135k to complete purchase price of 205k.

Your own house sale funds will have to be available to you before you complete the new purchase.

(As an aside are you going to have 70k left from sale after all costs etc are paid and taking into account legal costs etc for new house.
 
The only other way of doing this and it's not an option for several reasons but just to explain it anyway.

If you were not going to have the funds from your sale before you complete the new purchase then you would have to apply for a mortgage of 80% of the purchase price of the new house, 164k and come up with the 20%, 41k yourself outside of the sale of your existing property. This would allow you to buy the new house before selling the old one. However this would mean you would have to have access to 41k now and the bank would have to be satisfied income wise that you could pay both the new mortgage of 164k plus your old one on your income.

This would give you time to sell the old house while completing the purchase of the new one.

Obviously none of this is going to happen as you don't have the 41k lying around but I am just trying to explain the situation you find yourself in and why your existing house has to sold first so that you can use the profit from it for the new house.

Only other alternative is bridging finance which I am not sure is available even if you have unconditional contract for first house signed, ask you bank is this an option assuming you have the contract in place.
 
Separate post from Butterflygirl relates to the same issue. response from Monbretia above is good and clear advice in respect of both issues raised by the OP.
 
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