House Build, Buy or do nothing?

T

TheSphinx

Registered User
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94
Hi all

For starters I will display my financial status
  • Earnings are 40k, rising every year in Janruary
  • Have government pension from age of 21
  • Have €10,285 in a deposit account in AIB only earning 1% interest
  • Have an SSIA maturing May 2007, putting away the max
  • Have €3,000 savings in the Credit Union
  • Have €301.16 in a PSP account in AIB
  • Have €5000 in my current account
  • I Have a Hire Purchase agreement with Bank of Scotland, balance is €15,700 - no penalities to clear balance at any time.
  • No other loans or no credit card balances
With my Car loan, the max I can get for a mortgage is 195k, if I cleared the loan i would get more, but don't know by how much. But then I would have to apply for a 100% mortgage. I am still not sure where to live personally, whether to build or buy in monaghan with parents,( where i currently live) or buy in Dundalk where I work. What should I do, my head is in mush

Should I
  1. Build a house in Monaghan
  2. Buy a house in Monaghan
  3. Clear off Hire Purchase agreement
  4. Do nothing and save, and hope house prices will stabilise or go down
  5. Get a seperate pension.
All comments are gretly received...
 
I don't know too much about this (there's the disclaimer out of the way!) but I know that one of the conditions of my partner and I getting a 100% mortgage was that he cleared his credit union car loan before drawing down the mortgage cheque. While this wipes out most of his savings, we no longer needed them for the deposit because of the 100% mortgage.

Even a small monthly repayment on a loan reduces your ability to make repayments on a mortgage so I think it's better to clear it. Can't give any advice on which savings to use to clear it though!
 
Building a house would be the way to go if your parents own land and they are willing to gift a site to you. You can build a fine house for 195k and it would also be a good investment as its market value, on completion, will be a lot more than 195k. In addition, a mortgage deposit is not required when you already own a site.

Of course all of the above is irrelevant, if your are not in a position to get the gift of a site!
 
I don't have the gift of the site, I would have to purchase the site, but I may get the site at a reasonable rate, as it is an elderly neighbour with no dependants. I actually just rang my bank where I have had an account with since I was born, and they are only giving me 174k based on my earnings only, that is not taking into consideration any loans at all, this is also not a 100% mortgage - I certainly can't get anything for 174k no way. It looks as if I have to rent or buy with someones else... I would have thought with my status that I would have got something better, it's a bit unfair :mad:
 
Single buyers do have a harder time of it because they only have one income. Obviously I don't know your personal circumstances, but maybe you have a partner or relative you'd consider buying with in the future? There's also the rent-a-room scheme which can boost your income. Or perhaps a parent can guarantee your mortgage to add a little extra stretch to the amount you can get.

Just because your own bank aren't much help to you doesn't mean much. I've been with the one bank exclusively for my whole life (as my dad worked with them!) but I'm getting my mortgage from another institution. Shop around. We used a broker because of our slightly odd circumstances, but you could easily be your own broker and just apply to a lot of different places and see who'll give you the most!

If you can get c. €180k, you should still have enough in your savings for a deposit on a €200k mortgage. You might not be able to get exactly what you want now, but you can trade up to it later. We're starting out with a three-bed semi in an estate because we figure that we could stick there for 5-7 years if we had to - basically into the toddler-years! But perhaps a decent sized 2-bed townhouse or apartment would suit you for the time being.

There are three-bed semi-ds available for around €200k in Monaghan. Dundalk is dearer. Maybe somewhere like Inniskeen or Carlingford would suit you, commuting-wise?

Shop around the various mortgage providers. Find out if there's anything you can do to make yourself a better mortgage candidate (paying off your loan, planning to take in a lodger, getting a parent to guarantee your mortgage etc.) Have a look at your commute and the towns and villages that would be within acceptable commuting area for you (decent bus routes, low-traffic roads, time taken to do the commute).

It sounds completely possible to me. Good luck!
 
Most of the developments in monaghan that have house for 200K, are what is considered a bad estae - Wylie's Hill e.g in Ballybay Monagha, the house yes rose in value, but there is hardly no owner occupiers in the development, and they are all rented out to foreign national, I have nothing agaisnt that, but I have heard stories of different people who did live there and couldn't wait to move out. Another development in the Alders are going for €195, but they are not seeling too well as they are close to the lake and "under the road" - they are suspectable to flooding. You can good house in ares such as clones, etc - but the commute would end up being too far.
You will not get anthing decent in Monaghan Town, Castleblayney or Carrickmacroos for aroun the 200K mark, definately, a 2 bed apartment in castleblayney was going in castleblayney fro over 200k, which i consider a bad investment as far as castleblayney is concerned, bearing in mind i would still have to commute a long enough distance to work, I would like to be getting a 200k apartment in Dundalk for that.
Overall I think my max i will be able to afford on my own and live comfortably is 200k, I have thought about buying with a friend also in Dundalk, but I don't know if that is a good idea or not...
 
On €40,000 and with no loan you'd qualify for €195,000 as 100% or €220,000 as a 92% mortgage. Why don't you clear your loan with your savings and look to buy/build using your SSIA and accrued savings next year?

Sarah

www.rea.ie
 
I have a site in Monaghan town on which I recently got quotations of 200k for building a house just under 1,300 sq ft. While this allows me to build the house that would I like and I know about the quality of the materials and workmanship I will be unlikely to have a house that would have a resale value of much more than the costs of site and build. I am now wondering if its worth all the hassle ! So while I would have thought self build was definitely the way to go now I'm not so sure. Builders are so busy at the moment that I they are able to inflate their prices as they are not concerned whether they secure the business or not. Although some of the builders had quoted prices varying from 80 to 110 sq ft when the quotes came in the prices were way off the mark. I would advise if you do go down the site route get a firm of idea of costs before proceeding.
 
In reflection do you think at this stage just for to rent in dundalk, I know personally I won't be having kids so a big house is not as imprtant to me but i don't want a shoebox either, it seems a waste for me to buy anthing bigger then what I need, and people are saying not to buy 1 beds or even 2 bed apartments just in case there is a down fall...
 
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