Would like to move home but clueless about mortgages

[colin79ie]

Current mortgage 70k remaining tracker with boi. House probably worth 140k. We would like to upgrade but my knowledge of mortgages is limited.

Income of 80k and wife 25k. Both paye.

I'm hoping to use the profit from the sale as deposit.

Could anyone indicate a rough amount we could potentially borrowed?

No real debts 8k car loan ,1 year left and no credit cards. Not much in savings maybe 6k as we funded wife's university which drained most and just building it up again.

 

[Gordon Gekko]

Applying the Central Bank Loan/Income rule, you can borrow €368k. After selling your current home and paying off your loan, you'll have €68k in cash. Applying the Central Bank Loan/Value rule, you can borrow €272k to buy a home for €340k.

In your case, there is the possibility of applying for an exemption to the Loan/Value rule.

You will need to demonstrate an ability to handle the proposed repayments at stress tested levels for a 3 to 6 month period depending on the bank. You will need to manage your accounts prudently and have clean credit records. You will also need money for stamp duty (1%) and legals.

What level are you hoping to buy at?

 

[Steven Barrett]

It's all about ability to repay. While the Central Bank rules say you can borrow €368k, you need to be able to show the bank that you can meet the repayments if interest rates increase by 2%. The current mortgage that you have can be used as part proof. Discontinued car loan too.

Open a savings account and transfer money on a monthly basis. Do not take anything out. Article on what you need to show the bank here

Steven
www.bluewaterfp.ie

 

[colin79ie]

We don't have a level or property in mind. It's very much at the idea stage. However, looking around the area a lot of houses for sale were built during the boom and I don't want to buy a cold house or a house that needs work to make it comfortable or energy efficient. Certainly detached . We may also consider building but that's another ballgame .

Ill talk to a few lenders to see what the options might be. Can anyone recommend a particular lender? I see ebs get reasonably positive comments on here at the moment.
I'd like to take my tracker if possible for a while

 

[Brendan Burgess]

Current mortgage 70k remaining tracker with boi.I'd like to take my tracker if possible for a while

I'd like to take my tracker if possible for a while

This should not be a significant factor in your decision. A lot of people just assume that as they have a tracker, they must keep it. But you need to crunch the numbers.

If you are paying 0.8% at the moment, you will be paying 1.8% on the tracker element for the next five years. This compares with rates of 3.7% with EBS. So the savings from moving your tracker are 1.% of €70k or €1,300 in the first year.

You will be borrowing an additional €200k. EBS is probably 0.8% cheaper than BoI, so that is €1,600 year saved on the main loan.

 

[colin79ie]

Is it any more complex from a mortgage point of view if buying a site and building rather than straight purchase of a house?

 

[Dave_Curry_IMC]

Is it any more complex from a mortgage point of view if buying a site and building rather than straight purchase of a house?

Yes.

• At the very least, you need to provide detailed cost estimates that include 10% to 20% contingency (depending on the lender), so you need to be able to fund cost over-runs.
• Some banks will lend up to 80% of the site cost and 100% of the construction, assuming the final LTV is within criteria.
• Some lenders have minimum guidelines for the cost per square foot for construction. If they think your costs are too low, they will not accept them.

I would add a word of caution: cost over-runs are extremely common for self-builds. Personally, I don't think a self-build is suitable for anyone who doesn't have at least €50k in cash to fall back on, over and above the planned costs, plus contingency.

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