How to meet mortgage criteria?

Hi,

Hopefully you can help me. My fiance and I are hoping to start building a home soon and that is where the problems begin.. We would be building on a site that has been gifted to my fiance by his parents. All going well planning permission will be granted in a couple of weeks and at that point he will add my name to the title deeds for the site.

My fiance is self-employed and currently his income is non-existent, with a business loan for @ 12K. I earn @ 51K per annum and have savings of @ 33K. Neither of us own our own homes at present.

We have just been refused a mortgage for 220K by AIB as our 'joint' income does not satisfy their stress test criteria..

I would like to know what are our options? Would any bank give me a mortgage while the site is in both our names? I feel as if we have hit a stone wall..

Hi p

It's probably a good idea to listen to the bank.

The banks have been criticized for reckless lending. They are now being responsible and have concluded that you can't afford a mortgage of €220k.

I don't know about house building costs. But could you not scale down your ambitions dramatically and get a house built for around €100k?

Then later extend it when you have the money.

Brendan

selfbuildp said:

... at that point he will add my name to the title deeds for the sitel...

Click to expand...

+1 what Brendan said. As well as that, by gifting you half the site outside of marriage, you may be digging a tax hole (CAT) for yourselves that will make starting your project doubly difficult.

mathepac said:

+1 what Brendan said. As well as that, by gifting you half the site outside of marriage, you may be digging a tax hole (CAT) for yourselves that will make starting your project doubly difficult.

Click to expand...

+2 wait til the building costs come down more too the bank are doing you a favour by not letting you put yourselves on such financial pressure imo.

Thanks for the feedback folks. We dont necessarily need a mortgage for 220K, based on some outline costs we have gathered and a per sq., ft price given to us by a builing contractor plus contingency that is top end mortgage we could need..

However, we are planning to go direct labour and my fiance is in the trade so savings can definitely be made.

Right now we do not know what mortgage we can get i.e., based on current criteria what mortgage would we qualify for.. Based on this we could see if it is possible to move forward at this time..