How Much Would Bank Let me Borrow

Hi,

Situation is as follows: Own a apartment Current Value 390K
Outstanding Mortgage 265K

I have acquired a site in the country and have thus far built a house to roof level. To get this far has cost €50K excluding site cost. This house is now worth 140K

To fund building I have got a personal loan of 25K but now I wish to get a mortgage to fund the competion of this house. I hopoe to rent out this property. I am thinking around 90K.

I hope that I will use this to pay off 25K loan and use the rest to fund the house.

I earn 55K and also earn €850 pm rent. Would any bank fund this? I also have a car loan of 9K for a 30K car. I also have SSIA worth approx 15K

Sky Blue

How much will house be worth upon completion?

Bank will probably lend you 85% of LTV.
If you wish to cross-charge your PDH then you might get 100%.

Use SSIA to clear car loan - or if you leverage more off your PDH use the surplus there to clear it.

House would be worth 240K when complete. SSIA does not mature until march?

How much are you paying back on your car loan each month? It is the monthly repayment on all loans that is used when calculating how much you can afford to borrow, not the balance outstanding.

Car loan over two years 465 per month. Other laon is 400 per month.

Your situation seems quite favourable and the overall LTV will be good. Could you remortgage your apartment to achieve the balance required to finish the house, then you would have the house mortgage free and would not have the valuation costs of stage payments on a self build

Outstanding loans €9k + €25k = €34k

Say another €66k to build house.

Total requirement = €100k.


There is sufficient equity in your apartment (just) to raise it by topping up that mortgage.

Alternatively a €100k mortgage on a house worth €240k is a runner.

Main thing from bank's perspective is repayment capacity. Eliminating those two outgoings of €865 per month should give you ample surplus to service the mortgage debt.

Existing Mortgage bal and short term loans 265 + 25 + 9 = 299K

Taking into consideration your income and the LTV you could probably remortgage for approx 260K

Need to clear 299-260 = 39K ?


"I earn 55K and also earn €850 pm rent"

Where is this 850 rental income coming from? A room rental, another apartment or are you assuming this is what you will be making from the new property??

ontour said:

Could you remortgage your apartment to achieve the balance required to finish the house, then you would have the house mortgage free and would not have the valuation costs of stage payments on a self build

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As this is a once off build as opposed to a new development a stage payment cert from your supervising architect/engineer should be enough to request stage payment

Are you currently receiving rental income of 850 pm or is this projected? If you are currently recieving it will you also have a rental income from your new property?

Based on the figures you supplied above you would be a bit stretched if you were to borrow an additional 90k while still keeping your car loan of 465 pm. It may be worthwhile considering borrowing a little extra to clear your car loan and then repay it when your SSIA matures next March.

I would agree with posters above in saying that should remortgage your apartment to release the extra 100k. That way you'll have only one monthly repayment and if you switch to a company paying legal fees, you will save yourself the expense of a solicitor. You will also have all the money you need to complete the property upfront, saving you having to request stage payments each time.