First Time Buyer - Negative Equity Concerns

S

Stsinc

Registered User
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Hi there,
I'm currently a first time buyer awaiting acceptance on a bid on a property in Tallaght area, my bid 435k which is currently 75k over the asking price and probably the general prices in the area @ 360k or below commonly. The draw of this property is due to its size and potential as this is 5 bed (which is rare, commonly 3 beds or some include attic conversation), it also has a self contained granny flat for additional rental income potential and is a corner house, so subject to pp may allow for a second property to be added to side of the house. The concern is due to the inflated price, firstly will I get a mortgage, based on a banks valuation of the property? Secondly due to the high cost price, this may mean I have little to no equity to renovate. And not sure if rental potential and side garden development is a viable option to out weigh the initial property costs? I am a firm believer a good property will always sell at a good price but concerned all areas have a cap and with renovations to the property if stand to get myself into negative equity if I let my heart over rule my head
 
It sounds to me as if you are judging buying your family home primarily on investment criteria. That is not a good idea.

Your primary objective should be to buy a home in which you want to live and which you can afford.

If you can afford to buy a house for €435k and you can meet the repayments and you like the house, go right ahead.

It's obviously worth more than €360k. Is it worth 20% more? Probably.

If you don't like the house and plan to tolerate it for a couple of years before trading up, then buy a cheaper house.

Brendan
 
No, I love the house, the location is near family and friends and great for work, my wife can walk, I am 5 minutes to M50 for commute to sandyford and wifes parents live around the corner who are our child minder, good schools and Tallaght hospital only down the road. My concern is we are buying it at strong price because it ticks alot of boxes but is subject to further modernisation which could make it a 500k house and concerned that's a very strong price for area. But on the flip side is this irrelevant if we plan to live there for next 30 years and confident we can pay mortgage repayments unless interest go crazy plus 3%. So just wondering is there any considerations I should mindful of if I write of the potential lack of equity due to being a long term investment?
 
If you are happy to live there for 30 years and you can afford the mortgage, thats a great start.
 
If you love the house and you can afford it, just buy it.

At the end of the day, can you buy a house you love more for €435k? Or can you buy a house you love as much for less?

You could buy a 3 bed and then feel the need to move to a bigger house after a few years. Buying a house which is bigger than you need now, is a good idea if you can afford it.

Don't worry about negative equity. If it's not worth €435k to you don't buy it. If it is, then do so.

Brendan
 
I am not sure a separate dwelling (granny flat) falls under the rent a room tax-free allowance bracket. so you should factor that in... I would factor in the additional cost of putting the house right,, if there is work that needs doing.. on the face of it 500k sounds like a lot for the area, but then we are in the middle of a serious housing crisis. Personally, I would also be attracted to a home that has space to build another house (a corner house).

You will get a mortgage if the bank thinks you can afford to pay it back.. the next valuation will be in excess of 360k,, they are very loose and fast with valuations these days.
 
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