They asked what we save and the inheritance was mentioned - they only wanted to hear about 'regular savings'; the lump sum didn't seem to register.
This is incorrect.There is a very good chance you are paying Local Property Tax on your present house at 2013 rates but you will be paying Local Property Tax on full 660K when you move,
The OP stated that their current mortgage is with BOI. They have a mover mortgage that adds 1% to the rate for remainder of original term, so they are looking at ECB + 1.75%.The issue is that you need a new mortgage, and no bank will give you ECB+0.75pp today. You are looking at 3.0% or so,
On 75k a year, he has to support 2 adults and 3 children.He earns 75k p.a
I can't imagine there's much left over at the end of each month with 3 little ones.are you able to save on a monthly basis or are you just about getting by each month
It's been around for a long time, but until this year they restricted the tracker term to 5 years.This is long overdue.
This is not entirely the banks choice. It's a requirement of the consumer protection code issued by CBI.The OP is sadly reflective of the one-size-fits-all approach to underwriting taken by the Irish banks these days:
You understand the repossession process in Ireland?if something goes wrong the bank will be able to call in the loan in full eventually
You understand the repossession process in Ireland?
Yes. I was. I was earning slightly more than my husband with share options etc. We had a combined income of circa 120k. I still have the shares etc. I'm frugal these days. The time with my kids and helping them with their homework is worth much more to us.When you applied for the the mortgage 7 years ago, were you working? What was your income?
How did you answer this, in your current situation are you able to save on a monthly basis or are you just about getting by each month
First thing you need to do before if you have to give up the tracker is work out the repayments on new mortgage over its life time and how you will structure paying it back , when I hear the words only give us a mortgage of 220 K on a household earnings of 75K supporting 2 adults and 3 children I would say they are all offering max unless the want to get into trouble again ,
safe job only works well if you get good health and still together by the time mortgage is paid off,
I would say good health in your working life is more important you can find and follow work once you have health to do so,
You need to be careful you are not risking all of the money you inherited from your father on the soaring value of the house you are looking at increasing the risk to both yourself and the lender which may mean higher interest rates in the future,
This is incorrect.
If it's 2nd hand, the 2013 valuation will continue to be used until end of 2019. If it's a new build, there is no property tax until end of 2019.
The OP stated that their current mortgage is with BOI. They have a mover mortgage that adds 1% to the rate for remainder of original term, so they are looking at ECB + 1.75%.
On 75k a year, he has to support 2 adults and 3 children.
His take home is about 4480, assuming no pension contribution.
Mortgage over 22 years, stressed at 3.75% is 1450, leaving just over 3k. That looks to meet the criteria - although just. I suspect the bank might have stressed at 2% above new lending rates rather than your rate. I don't have the exact amounts that BOI use for dependents.
Really all you can do is talk properly to the bank, and make a formal application. Make sure it's a mortgage advisor you are speaking to in the branch.
The key question is as Cervelo posted:
I can't imagine there's much left over at the end of each month with 3 little ones.
You need to demonstrate that you are not already stretched. It doesn't matter that you only want to borrow the same as your current balance - the bank has to satisfy that you can afford it.
Apart from all the above, I agree with @RETIRED2017 sentiment. Do you really need a house worth 200k more? You're in a position to make a serious dent in your current mortgage, maybe aim to repay the balance within 7 years without too much stress, and be debt free before second level school starts.
Having moved house myself, with children, it's extremely stressful. It always takes longer than planned, and costs more to do renovations than you think it will.
Best of luck.
Thanks RedOnion. I wasn't aware that BoI were allowing people to keep their tracker. This is long overdue.
The OP is sadly reflective of the one-size-fits-all approach to underwriting taken by the Irish banks these days:
From the bank's perspective, there is really very little risk involved. There is a solid income and a track record of repayments. There is so much equity that if something goes wrong the bank will be able to call in the loan in full eventually.
- No allowance for the fact that the wife has a history of earning and the potential to earn in future.
- No recognition that they have not missed a mortgage payment.
- No benefit given for the fact that they will have a very low LTV.
From the borrower's perspective, if financial circumstances change for the worse there is room to sell up, pay off the mortgage in full and buy a house outright in a cheaper location.
It's been around for a long time, but until this year they restricted the tracker term to 5 years.
This is not entirely the banks choice. It's a requirement of the consumer protection code issued by CBI.
You understand the repossession process in Ireland?
But, from banks perspective, you are correct - they would love to be lending to people like this.
Yes, set up a regular saver account and put in a few hundred a month to show you can afford it if you need to.is there anything else I could consider doing in advance of an application?
You have other, non pension, assets apart from the 200k? Have you considered liquidating some of them and reducing the amount you need to borrow anyhow?However, we have a lot of assets.
Yes, set up a regular saver account and put in a few hundred a month to show you can afford it if you need to.
Check if your previous contact is still working in mortgages. Most of the underwriting in centralised, but if you have a contact they might be able to present your case for you.
You have other, non pension, assets apart from the 200k? Have you considered liquidating some of them and reducing the amount you need to borrow anyhow?
When a man retires, his wife gets twice the Husband but only half the income,I joke with him that if he retired early, I would definitely go back to work full time! Although by then, nobody would have me. I'd only extend the term slightly to keep the repayment the same as existing - primarily to keep the bank happy. If he did decide to retire early, there would be the option of his retirement lump sum, I suppose. But point taken, mortgage free is a great position to be in.
If I read it right you have €550k in cash and other liquid assets. Why not use all of this to buy a house for cash? Potentially in a better location than now.
Your exising house would turn a profit as a rental, even after tax. In the meantime you could save to fund renovations in the new house.
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