Releasing Equity on House

T

TipperayMan

Guest
I have just completed building a house and got it revalued at twice the cost. My intention is to buy a site and build a house and then sell it.
My bank manager is telling me that I have reached my ceiling on the mortgage (ie I would not be able to repay another mortgage, on my current wages) and they wont consider releasing equity on my current home.
Any ideas/tips?
 
Listen to your bank manager,he's the expert !.In the present climate if he thought there was any way,shape or form he could give you the money he would.Just enjoy your life and don't think everyone around you is getting rich in the property game,cos there not !.
 
I had an interesting chat with the Mortgage advisor (def not the bank manager) and I asked him if he himself had any rental property and he said he hadn't. Also the very same person spent the last 10 years in stocks and shares and I asked about this type of investments, again very negative response saying that the markets have reached a high and it was just about to peak so not to bother investing....... not sure what he was up to!!!

So I return to my original posting..

I have just completed building a house and got it revalued at twice the cost. My intention is to buy a site and build a house and then sell it.
My bank manager is telling me that I have reached my ceiling on the mortgage (ie I would not be able to repay another mortgage, on my current wages) and they wont consider releasing equity on my current home.
Any ideas/tips?
 
Some options;

Sell the existing house and build the new one with the proceeds.

Move out of the existing house and rent it

Forget the bank manager, get a broker like REA to help out. In the past I've been refused a loan with a particular bank and had a broker then go and get approval with the same bank!
And finally...
Ignore the naysayers...the riskiest thing is to do nothing at all. That way you have no chance of getting on
One caveat tho...I would'nt want to be paying 2 mortgages at once with no income...try and get an income from one i.e rent the existing house
 
Have you thought about maybe holding onto the house for a couple of years? If so you may qualify for a second mortgage based on projected rental income. Also, I'm not sure but I think that by building a house and selling it straight away you might be liable to pay higher capital gains taxes as you may be classed as a developer. As I said I'm not too sure about that so maybe someone could help me out?

I think you should call an independent mortgage broker who can try a few companies for you. The broker you spoke to already seems to know what (s)he is talking about (look at waht happened to the values of stocks & shares this week!) You may not be hitting the criteria with your existing bank but each lender has different criteria which means that you might qualify for the mortgage somewhere else.
 
badabing said:
Ignore the naysayers...the riskiest thing is to do nothing at all. That way you have no chance of getting on
One caveat tho...I would'nt want to be paying 2 mortgages at once with no income...try and get an income from one i.e rent the existing house
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That is without doubt one of the most stupid things i've read in a while.The chap has a house at the moment,to do nothing would incur no risk,to start delving into the monster that is the irish property market would be by far the riskier option.
 
DonKing said:
I know any bank manager I've met I wouldn't consider them to be financial experts!
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I only meant it in the sense that in the present climate,if they could possibly give him the money they would so he must be too much of a risk.
 
thewatcher said:
That is without doubt one of the most stupid things i've read in a while.The chap has a house at the moment,to do nothing would incur no risk,to start delving into the monster that is the irish property market would be by far the riskier option.
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I totally disagree with you.. building a house and holding will most definitely produce handsome returns over the long term. A 20 or 30% drop in values in the medium term will be irrelevant when looking back 10 years down the line. To do nothing implies a 100% risk of making no gains!
 
badabing said:
I totally disagree with you.. building a house and holding will most definitely produce handsome returns over the long term. A 20 or 30% drop in values in the medium term will be irrelevant when looking back 10 years down the line. To do nothing implies a 100% risk of making no gains!
Click to expand...

Absolute rubbish,the japanese market crashed 15 years ago it has only now just began to rise again.How many more years will it take to get back to the level for people who bought at the top ?

http://en.wikipedia.org/wiki/Japanese_asset_price_bubble

The chap would have to buy the land,get planning permission and then build the house,that could take him 18 months what happens if the house is finished just as the market crashes ?

I gather that this chap has no finance behind him and could find himself in big trouble very quickly.
To do nothing implies a 100% risk of making no losses!
 
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