Mortgage for a Temporarily Poor Student?

B

BadBoy

Guest
Hi all,

I'm a long-time reader/first-time poster and would like some advice. This is yet another of those "how much can I get for a mortgage" questions, but with a twist, I think/hope.

I am a research PhD student in receipt of a fixed stipend of €1058.33 per month. Between us, my girlfriend and I are the proud earners of roughly 40K per year. My salary position (it adds up to a wholesome €12,700 in case you were wondering) is temporary and I imagine that I would be starting out on at least €35K when I finish (in about 2 years). At the moment, we both live at home so our costs are relatively low and we are both 25.

Our plan/dream is to buy a new 2-bed apartment off-plans in North Dublin and move in to one room and rent the other under RAR. For this, we guesstimate that we will need in the region of 380K-390K.

She has no savings, my SSIA is currently maxed and will mature to circa. 7K next April. We will probably get some help from parents for the initial deposit. We tightened up our (her ;)) budget within reason, and set out an achievable plan for the next 3 years. From that plan, we estimate in about 12 months time, we could comfortably(-ish) afford monthly repayments of circa. €1800, plus whatever we get for renting the extra room. We came to this figure by adding up everything that we currently spend out on loans etc., ie. money that we currently live without, which still leaves almost €1000 between us to survive for the month, which we have been used to doing for years now.....

What are the chances that a lender will take this bottom-up approach to determining how much we can borrow? We are looking for almost 10 times our combined salary so I realise that we are more than likely living in fantasy land, but we'll be able to afford repayments so I'm pretty frustrated by the whole thing. We havn't asked anywhere yet for fear of being deafened by laughter so maybe someone on AAM can save us the embarrassment! :eek:



Thanks for listening,
BadBoy......
 
Hi Badboy,

Sorry to be the bearer of bad news but you'll need those €35k p.a. salaries before you'll be able to realise your dreams unless one/both parents are willing and able to guarantee the mortgage in the meantime. Lenders have to be seen to be lending responsibly and within their criteria and 10 times income falls into neither camp. Sorry.

Sarah

www.rea.ie
 
Well not all bad news but you MUST be aware that it may take you a while to get your foot on the ladder. My DH has a PhD and we found only one lender (FA) would give us a mortgage as he had a contract job for his first (i was permanent). In his line the money is the same initially €35 to start and hopefully when made permanent it will get much better. We got a family loan of €20k and a 100% mortgage and purchased our dream home - we hope not to move for a long time.
So you see i want to stress the picture is bright for you but right now i doubt anyone will touch you as you are "risky".
Quite apart from this (and this is my own personal advice) you are finishing up 7+years of college - don' t put so much pressure on yourself. Enjoy your lives, travel ? use your first few months blowing a few quid on yourself because when mortgage and car loan etc etc comes along you might wish you had. DH says that seeing most of his friends going traveling / signing up to the dream car etc after the PhD does not bother him now that we are paying back on loans and I hope its true as i had the year of enjoying mysef and the next to saving copping mysef on financially adn i feel i enjoyed those three years probably more than he did on no cash working away at his PhD.
Food for thought?
 
Thanks a million guys,

Its certainly painful to have the truth brought home but I think we knew this all along and were reluctant to admit it. We are more than ready to fledge the nest but aren't too keen on paying some1 elses mortgage. I suppose we'll have to put up with our situation for a while longer. At least by seriously discussing this we have set ourselves a budget and some savings targets so it's not all bad news. But I still cant help but imagine ourselves in years to come looking back fondly at a time where we could have bought an apartment for only €400K!

Thanks again Sarah W and nelly, for another lesson in the school of hard knocks
 
I would imagine that the chances of you getting somebody to rent an room would be very slim.Very few people would want to share with a couple, especially when it is their home. Not worth the agro.
 
fill out the affordable housing scheme application and forget about it.
I got a provisional offer 3 months after i got married and I month after we bought the house. The offer was of a 2 bed house in a not too bad at all area, but of course "dems de breaks".

I have to agree that birdy speaks the truth - me and de hubbie had awful trouble trying to find a house with people that wanted to share with a couple while we were house hunting.
 
A few things to consider:
1.You don't know where your first job will be so maybe buying now would not be a good idea anyhow.
2. Is it worth being miserable now (no social life) to get a foot on the property ladder. You'll have good career prospects so buying should not be a problem in 2 years time.
3. On a positive note banks do look favourably on young profs on lower incomes in the early stages of their careers so in 2 years you may be buying your dream home and not just settling for what you can afford.
 
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