Building a Home and Finance - Advice Appreciated

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Nikki N

Registered User
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Hi there,

Myself and my boyfriend are looking at building our home in Co. Galway on a site given to him by his Father. We have no savings to speak off, how do we fair out with a mortgage?? Some friends told me that the site can be usued as collateral on the mortgage, therefore we wouldn't need a deposit, has anyone had any experience of this??
 
Going through this atm. As far as I know you have two options:
1, Your bf looks for planning and a mortgage on his own therefore getting the site as a gift from his father with no inheritance tax implications. The only downside here is that although you will be involved in the building of the house and the paying of the mortgage, you wont actually own the house until you get married and the bank may only approve so much money based on one single income.

2, Your bf's father transfers the site to both of you. I think that at this stage you will be liable for tax as you arent related his father. I think that this can be a significant percentage of the site value. If you decide to go 50/50 on the build the bank will assess both your incomes and decide how much you are able to pay back before pre-approving you for a mortgage amount.

I'm open to correction on this and if anyone has gone through this they might shed more light on it! Oh yeah, all the above depends on you getting planning permission from the council for the house!!!!

Best of Luck!
 
Thanks for that Salmon!!
So you're advice is get married then!!!??? Don't know how i could break this to my bf....maybe i should print off your words and see what he has to say for himself!! :) Cheers for your thoughts anyway though!
Does anyone else know of using the site as collateral though and not needing a cash deposit!??? All thoughts appreciated!
 
Nikki,

Dont run off and get married straight away!!! Wait till you get some more input from other people ;->. As far as using the site as collateral just go to a broker or a bank they will advise you how the whole thing works! When I went about 3 months ago i was told that I could borrow 6 times my earnings for a mortgage over 35yrs. I know this is a lot but you have to start somewhere. It doesnt really matter how much the site is worth they usually work it on so many times your yearly earnings. Thats why I mentioned that it will be important whether your bf goes on his own for the mortgage, or you both combine your earnings and get joint ownership of the site! So for example if you both earn 30k and apply together then you could get approved for as much as 360k, whereas if your bf goes alone he might only get 180k. It all depends on your earnings and how much you are looking to borrow!!! Oh yeah, you wont need a deposit if you are building a house!!!
 
Hi,

As far as I am aware you can go for what is know as a "Joint Mortgage Sole Title" - this basically means that you are on the mortgage, but not on the hosue deeds - when you get married (or after about 3 years, whichever is longer) - you can get yout name put on the title with gift tax coming into play - ask you solicitor about this. It is not that uncommon.

Broswer
 
Jez,

Ya learn something new on this site everyday!! Oh just a question browser, if I went for this option would my gf be able to get planning in her own name on her dads land. I am looking around for a mortgage at the moment and am afraid if we get one together she wont be able to get planning on her dads land. We hope to build on my site first and then on hers in a couple of years. Sorry for hi-jacking your thread for a mo Nikki!!
 
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