Can someone on €20k get a mortgage?

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Woodsman

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A friend owns a small farm (10a plus house) in the BMW region. She has three small children, no debts and an income of 20k pa plus the the usual dogs, chickens and goats. She needs to purchase somewhere for her mother to live and would like to buy a nearby 12 acre holding plus house which is on offer for 150k. She cannot get finance anywhere. The 12 acres could produce app 2.5k pa. Mother can put 30k in to the kitty. Is there any way she can finance this purchase? Or should she be even considering it?
 
Re: what to do with mother?

Woodsman said:
A friend owns a small farm (10a plus house) in the BMW region. She has three small children, no debts and an income of 20k pa plus the the usual dogs, chickens and goats. She needs to purchase somewhere for her mother to live and would like to buy a nearby 12 acre holding plus house which is on offer for 150k. She cannot get finance anywhere. The 12 acres could produce app 2.5k pa. Mother can put 30k in to the kitty. Is there any way she can finance this purchase? Or should she be even considering it?
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I'm surprised she cannot get finance. According to the FA website, someone who takes in a net monthly income of €1,875 and has no loan committments is entitled to borrow €130k. Your friend only needs to borrow €120k.
 
I must say that I would be slow to lend €120k to someone on €20k per annum. The security might be there, but the repayment capacity is not.

Could they consider splitting it in two and buying just the house for the mother? They might be able to find someone else who wants the 10 acres but not the house.

They should contact a mortgage broker for a difficult case like this.

Brendan
 
Good Morning,

Can someone on €20k get a mortgage?

Yes!


How old is the Daughter?
What is the value of the property she owns?
Is she self employed or PAYE?
Does she receive any allowances ?
How will the 12acres produce 2.5K per year Rental, farming etc?
 
With 3 children I think €20k would only cover her living costs. Also she won't get a mortgage on 12 acres - the max. for a homeloan is normally 1 acre and in this situation the title would need to be split; house on one acre and 11 acres on the other. You might try ACC.

Sarah

www.rea.ie
 
Woodsman said:
A friend owns a small farm (10a plus house) in the BMW region. She has three small children, no debts and an income of 20k pa plus the the usual dogs, chickens and goats. She needs to purchase somewhere for her mother to live and would like to buy a nearby 12 acre holding plus house which is on offer for 150k. She cannot get finance anywhere. The 12 acres could produce app 2.5k pa. Mother can put 30k in to the kitty. Is there any way she can finance this purchase? Or should she be even considering it?
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Has the daughter considered building the mother her own living quarters ( subject to pp ) ie an extension to existing building but with separate entrance? A 500 sq ft ( size of a one bed. apartment ) extension would cost a fraction of the 150k outlay you are talking about.
 
How old is the Daughter? 30
What is the value of the property she owns? 120k
Is she self employed or PAYE? PAYE

Does she receive any allowances ?
Yes but I have no idea what. Presumably she gets the standard for a person with three kids under 10

How will the 12acres produce 2.5K per year Rental, farming etc?
A mix of rent plus forestry. Possible sale of a site would help lessen the debt.
 
demoivre said:
Has the daughter considered building the mother her own living quarters ( subject to pp ) ie an extension to existing building but with separate entrance? A 500 sq ft ( size of a one bed. apartment ) extension would cost a fraction of the 150k outlay you are talking about.
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Would you want to live with your mother?? I know it sounds unkind but sometimes love survives best when seperation is assured. I think in this case mother and daughter would be both happier near each other but not in each others hair so to build on her own holding is not an option. To purchase a site would cost 70k and this makes the purchase of the house plus 12 acres look attractive.
 
Woodsman said:
Would you want to live with your mother?? I know it sounds unkind but sometimes love survives best when seperation is assured. I think in this case mother and daughter would be both happier near each other but not in each others hair so to build on her own holding is not an option. To purchase a site would cost 70k and this makes the purchase of the house plus 12 acres look attractive.
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I know what you are saying but on an income of 20k you also have to be realistic and imo an outlay of 150k on an income of 20k is not an option. The daughter has ten acres - can she not build a small one bedroomed house for her mother at the opposite end to where her place is ? There would be a decent space between them and with the mothers 30k the daughters outlay would be something similar ( on say a 500 sq. ft house. )
 
20k assuming she's not liable for tax (which she might be) gives a max of 1667 euros per month to live on.

If she borrows 120k over 35 years at 4.2% her repayments are 673 per month which is 41% and well above the 33% recommended limit for borrowing. I'm not surprised she's been turned down.
 
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