Downpayment from equity

rjjd

Registered User
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Hi

We’re moving house and need to make a 10% (€46k) downpayment on the new house. We used savings for the first €5k and, while we could fund the remainder of the downpayment from savings, we’d prefer not to as they are locked into long term arrangements.

The remainder of downpayment needs to be made in the next month. The house won’t be available to move into until April 2019 and we don’t plan to put our own place on the market until the new year. There is c.€130k equity in the current house which we will use to part-fund the new house.

I’m assuming this isn’t too unusual a situation and was wondering if banks (in our case PTSB) will fund the remainder of the downpayment? If so, does anyone have any idea of what costs PTSB charge.

Thanks in advance


Richard
 
A very interesting question.

I doubt that ptsb will do that. But, of course, they should.

The only way to know is to ask them.

we could fund the remainder of the downpayment from savings, we’d prefer not to as they are locked into long term arrangements.

Time and again, people are advised not to tie up their money in case they need it. If you were vaguely thinking of moving, then having your money tied up is worse again.

What products are your savings tied up in?

If it's the likes of State Savings, then it will probably be better for you to cash them early instead of borrowing from ptsb at 3.5%.

If you provide the details, we can do the arithmetic.

Brendan
 
Have you signed contracts on the new property? That's pretty risky if you have. The biggest risk being Brexit and how that might affect the Irish economy.

How much would it cost you to break your savings out?
 
Thanks Brendan, Bronte for responses.

@Brendan, as you suggested, PTSB laughed when I asked about what is effectively bridging finance.

Current status:
We’ve 25k in cash (regular bank savings account); 21k in An Post savings (ten year national solidarity - been in there for five years, accessible with seven days notice); 7k in Credit Union; 10k in Zurich unit monthly savings product. The two that I don’t want to touch are the national solidarity bond and the Zurich account as there are losses/costs associated with ending both.

We had been keeping a lot of savings in easily accessible forms as we knew for a while that the move was on the cards.

In order to make up the 41k downpayment (on top of the 5k we’ve already paid from savings) we’re thinking about using the 20k of the 25k cash (bank savings accounts) which is generating zero interest and borrowing 21k from the credit union which we can then repay when we’ve sold our own house. We can borrow this at 7.5% / c.300 euro per month.

In terms of other requirements related to moving costs until we’ve sold our current home, we’ve got the remaining 5k plus we’re saving 1300euro per month.
 
Another option to explore is if you can pay a lower deposit.
10% is standard, but I've heard of lower being negotiated
 
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