Mortgage Advice

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phoenix_n

Guest
Wonder if someone could give me some advice on the following:

Details : Salary approx 55,000
Cash 130,000 (proceeds on sale of house)
No debts

My offer was accepted on a property down the country (home town) for 335,000(+stamp 20,000) and i have a mortagage approved for 280,000. The rest i can make up. Sale should go thru in about a months time.

But here is where it gets complicated. I got wind of a new development yesterday and put down a deposit of 5,000 on a dublin city centre 2 bedroom flat. 400,000. This will become my primary residency.


Now for my questions:
How should i best approach getting a second mortgage:
I can afford to pay the 10% deposit on contracts in 21 days in cash so that i would not need for the moment to go to the bank to look for a 2nd mortgage. Since completion would be probably feb/march i dont need to scare the bank yet. Could i lose my deposit and indeed is it possible to sign contracts without mortgage approval.

Otherwise go to the bank and get an investment mortgage on the place down the country ( can't you get more if it is investment ) and get a primary mortgage for the place in dublin when it gets built.

Would even the bank give the desired money ?

Any ideas ?
Cheers....
 
Which property will be let? And what rent would you expect to get?

Your solicitor will (very) strongly recommend you have a mortgage offer in place to sign contracts on the flat as you will risk losing your deposit if you are unable to complete. Based on your income total indebtedness of €640,000 (€280,0000 + €360,000) is way outside lending criteria.

Sarah

www.rea.ie
 
But surely if the place down the country is rented and the rent is covering most if not all of the mortgage, the financial institution will take this into account and the fact that his income will fall well below the lending criteria will be irrelevant??
 
Sarah W said:
Which property will be let? And what rent would you expect to get?

Your solicitor will (very) strongly recommend you have a mortgage offer in place to sign contracts on the flat as you will risk losing your deposit if you are unable to complete. Based on your income total indebtedness of €640,000 (€280,0000 + €360,000) is way outside lending criteria.

Sarah

www.rea.ie
Click to expand...

Thanks Sarah for the dose of reality.

Yeah i thought i might be outside lending criteria.

I would rent the place down in the country. Its a good investment as can be converted to flats in the future. But for now i can get rent of about 1,000.

So..:( ..Can i assume that the chances are zero for the 2nd mortgage.

Anyone guess what i could probably get........(have ssia maturing next year)
 
'Fraid so. Based on €280,000 x 25 years (max term for investment mortgage) stress tested at 2% over current rates your repayment would be €1850*. Lenders take up to 80% of the rent hence €800 leaving you with a shortfall of €1000 per month. Even taking room rental into account your max. additional mortgage is going to be no more than €150,000. Could you bring in a joint borrower on either property?

* I know that you'd probably go interest only on the investment mortgage but lenders underwrite on annuity.

Sarah

www.rea.ie

P.S. The max from your SSIA is going to be no more than €20,000 which is a good sum but not really relevant to these figures.
 
Didnt know about the 25 years. Phoned up the bank and they will get back to me. I did understand that i would be stretching myself but like the old adage 'you have to speculate to accumulate'.

I'll let the bank give me the bank news later.

Just that i have 21 days to sign the contract on the new development. Would have liked to have longer in case the property down the country fell foul for some reason. ( '60s 3 story town terrace )

Can i delay the contract on the development ?

Yeah seeing if i can get another person to invest with me.


Sarah W said:
'Fraid so. Based on €280,000 x 25 years (max term for investment mortgage) stress tested at 2% over current rates your repayment would be €1850*. Lenders take up to 80% of the rent hence €800 leaving you with a shortfall of €1000 per month. Even taking room rental into account your max. additional mortgage is going to be no more than €150,000. Could you bring in a joint borrower on either property?

* I know that you'd probably go interest only on the investment mortgage but lenders underwrite on annuity.

Sarah

www.rea.ie

P.S. The max from your SSIA is going to be no more than €20,000 which is a good sum but not really relevant to these figures.
Click to expand...
 
well phoned up the bank.

have asked for approval to be increased from 280 to 300 and for it to be changed to an investment mortgage and have asked for 300 for the new build in dublin. will be 20 short but can get my SSIA money in advance.

he didnt laugh at me (which is a start) when i asked for 2 mortgages but said he would have to look thru the figures and it may need to go to 'retail'.

heres hoping......
 
phoenix_n said:
well phoned up the bank.

have asked for approval to be increased from 280 to 300 and for it to be changed to an investment mortgage and have asked for 300 for the new build in dublin. will be 20 short but can get my SSIA money in advance.
Click to expand...

How can you get your SSIA in advance? Thats a neat trick!!
 
ClubMan said:
By taking a 23% tax hit on the full amount withdrawn. Not so neat... :(
Click to expand...

Cash advance from Dad.....After saving for nearly 5 years i would not dream of withdrawing earlier......
 
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