Second time buyer advice

[Detoxkid]

Hi there. I am looking for advice on our situation - apologies if im giving too much info!

I'm 36 and earn around 68000. I've been in my permanent, pensionable job for nine years. Im married and my husband is a full time student, due to graduate in may. He starts into a work placement then for six months (minimum wage). He will have great prospects for employment after that but will likely not have a permanent job for at least another year. We have two children under two years, I'm currently on maternity leave. I'm planning on taking extended unpaid leave and will return to work at the beginning of October. I have separate savings which will cover expenses up to then. When I go back to work our childcare expenses will be around 1100 a month. I bought a house before I met my husband at the height of the boom but have paid off 60k of the mortgage, there's around 150k left on it. I have it rented out and have good tenents. We had to move counties a few years back and have been renting for four years. If I was lucky enough to sell the house the sale would cover the mortgage but I'd like to sit tight on it to try and claw back some of the money I've lost on it.

I'd love to buy a house where we live now. We have around 40k savings and no other loans. The fact that I'll be taking unpaid leave will show a four month halt to my savings. I want to apply for a new mortgage of around 200k six months after I go back to work.

What are my chances? Is there anything I can do to improve them? My timeline is limited enough, I cant really wait until my husband has a secure job to apply for the new mortgage.

Any advice very much appreciated!

 

[Dave_Curry_IMC]

Hi,

A few important questions:

• How old is your husband?
• What rental income are you receiving for that property?
• Regarding your mortgage: what are your monthly repayments, what is the rate, how long is left?

To be honest, I think it will be extremely difficult to get approval now, no matter how positive the answers to the above questions are. Here are the main challenges/issues:

• The minimum disposable income for a household with 2 adults and 2 children is around €2,600 per month. Only income above that amount can be considered for mortgage repayments. When you take your child care costs into account, and a possible deficit caused by your rental property, there may be very little left over for a mortgage. This is why your husband's income - no matter how small - could easily make the difference between getting approved and not.
• As a non-first time buyer, your chances of getting a mortgage of more than 80% are low.
• Based on the circumstances you describe (single income, unclear child care expenses), I don't think the banks will approve you until you are back from maternity leave.

Once you are back in work, and your husband has an income, the situation could be transformed and it may be quite straightforward to get approved at that stage.

Best Regards,
Dave Curry, Irish Mortgage Corporation
https://ie.linkedin.com/in/davecurryirl