Mortgage advice - so different, not comparable?

L

lizabeth

Registered User
Messages
57
Hi

gone to different lenders & brokers and find cannot compare like with like!! Boggled and need to act soon. Situation is as follows:

Current house value: 250k
Bought site (1 acre rural) sub to pp: 70K
Esimated build 2500sq ft (dir lab) cost 250K (include finish etc).
Total Loan amt needed: 300K.To start Jan 07, hopefully!
Outstanding morgage: 26K
Joint incomes allow for 280, 290K stretched borrowings
Savings accounted for: to cover stamp duty, cash on top of 70K to site seller

Want to complete build before selling up current house

From reading all articles and posts: this is what im thinking -
1. go for investment mortgage to get 300K, my new build considered residential, current house to let (even though I'll prob sell)
2. Interest only mortgage for first 12 mths over 30yrs. Am used to only paying 400 pm on repayments now.
3. Follow ECB rate or fxd for 1 yr?
4. LTV: should i do 300/400=75% to be safe or should I aim for lower LTV by 300/400 plus value of current house to be <60%

Is it that I ought to find cheapest way of funding like disc variable rate, and disregard what rate would be after that as house should be sold to go against loan within 18mths anywhere, thereby reducing mortgage. I cannot make up my mind and am confused with all the various mortgage lenders advice.

Lizzy
 
First of all you'll need to have full planning permission on the house to raise any mortgage finance against it (First Active will lend with outline planning - all the rest require full).

I wouldn't recommend cross-charging (borrowing against the combined security of both properties) simply because it will result in more legal costs to set up and subsequently disentangle.

I take it you'll be looking for stage payment to build the new house? In that case a tracker mortgage will be more flexible than a fixed rate and you'll have no penalties for early redemption. A number of lenders will do interest only so that shouldn't be an issue - also most don't differentiate between homeloan and investment mortgage rates so again, this won't be a problem.

When do you expect to get your planning approved?

Sarah

www.rea.ie
 
Hi sarah

planning shd be approved by december - yeah, i realise need fpp, but am pretty confident re: same. Only reason had considered 1yr fxd, as timescale for build would prob take that anyway. More legal costs with investment prop? didnt realise - thought if borrowing 300k would be same either way?

L
 
Mortgage strategy?

I think I'll go for the cheapest discounted variable mortgage, interest free, for 12mths, while I build (dir labour) on site just bought.

Id hope that in 12-18mths my house will sell (250K) and go against new mortgage (300K).

I know often that once 12mths is up the variable rate you move to can be higher perhaps, but at least my mortgage will be small at this stage

Any comments -??
 
Re: Mortgage strategy?

Oh heck, yeah I did!!!! Im laughing at it - wow imagine interest free mortgage, in my dreams. thanks for pointing out!!
 
I merged the new thread that you started into the original one. Please reply to existing threads rather than starting a new one on the same topic of your original query.
 
Sorry, Ive obviously not adhered to guidelines - so if replies to my query arent there, (and Ive read many postings, articles) before I posted, and still unsure what to do - I cant redirect same query in shorter version so that perhaps viewers may be encouraged to read???

L
 
lizabeth said:
Sorry, Ive obviously not adhered to guidelines - so if replies to my query arent there, (and Ive read many postings, articles) before I posted, and still unsure what to do - I cant redirect same query in shorter version so that perhaps viewers may be encouraged to read???

L
Click to expand...
Sorry - I don't know what you're trying to say here.
 
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