Building house - keeping old house until finished.

[Dace]

We're going to be building a house over the next year but are wondering if & how we could keep our existing house until it's finished. Our current house is worth around €230,000 & our ourstanding mortgage is €100,000, 14 years remaining. We would probably need €300,000 to buy the site & build the other house. Our combined earnings are €95,000. Our Bank are recommending we take a bridging loan to pay for the site. Not sure if we would need to take a bridging loan for the €300,000 in order to keep our own house til the end or if there is a better option.Would consider keeping our current house to rent also, if it didn't put us under too much pressure.

Advice much appreciate.

 

[Bro]

Hey,

I am hoping to do the same thing and am actively trying to get the documentation ready for the mortgage. My partner and I own our own houses and we have been advised to hold onto the houses for as long as we can. In case the house prices continue to increase.

I don't know what to do first - apply for mortgage, put a deposit on a site, get an architect to draw up plans. I am also afraid that I will end up paying mortgages on all three houses.

Have you had anymore thoughts?

 

[Sarah W]

Dace - based on your incomes you should be able to retain your house whilst the new one is built and then either let or sell it. You could remortgage it to release equity and/or you could borrow up to 90% of the site and build costs on the new house. Bridging (whilst no more expensive than mortgage rates) might put you under pressure to sell when you might not want to.

Bro - you can apply for a mortgage at any time and the approval is normally valid for up to 6 months. You'd really need to find a site before getting plans drawn up but I'd guess there would be no harm in chatting to a few to get a feel for costs and the myriad of questions you'll probably have!

Sarah

www.rea.ie