First time buyer - Interest Only?

M

mhiggs

Guest
Is it possible for a first time buyer to get an interest only mortgage? I know its possible for RIP(Res. Inv. Prop) but not sure if its allowed for first time buyers?

Is there a certain value or % allowable before it can be interest only? e.g. less than 85%
 
Hi,

IIB allow interest only payments for up to 36 months of the mortgage - normally borrowers take this for the first three years but you can take them at any time and split the 36 months into segments. Bank of Scotland also do interest only for the full term of the mortgage if required however their maximum advance is 85%.

Kind regards,

Sarah

www.rea.ie
 
would it still be possible to get an interest only mortgage if i had a personal loan? Things is I may need to get a loan for the deposit so just wondering how approachable the bank would be to this idea? Mortgage would only be for about 170K so at interest only i could still afford to repay a personal loan of about 15K over 3 years.
 
It will depend on your income and the repayments on the personal loan. Lenders work on the basis that your total outgoings (with the mortgage stress tested at 1-2% over current rates) not exceding 35-45% of your net disposable income. Mortgages are always underwritten on an annuity basis so taking an initial interest only period will not increase the amount you can borrow.

Sarah

www.rea.ie
 
Agreed. I spoke to the bank and they said i could get mort. approval for 200k. If i choose to borrow only 170K then surely they would not be adverse to me borrowing another 15K on a personal loan to make up the deposit? I would still be below my max borrowing limit of 200K.

170K interest only would be approx. 390 pm. for 3 years. a personal loan of 15000 would work out at about 480 pm over 3 years. combined it would still be similar to a full mortgage payment based on 200K taking mortgage interest relief into consideration. just wondering if its a viable option as our current landlady is selling our house so we're trying to come up with the cash to buy our own. Would a mortgage lender be convinced by this idea.
 
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