Remortgage Options

Hi i have a home which was valued last year at 580k i own the house outright. I got a mortgage last year of 100k to do some renovation works with the repayments suspended till January 2009 as i am a final year student and will be in public sector employment then.

I am now seeking to obtain another €50k to finish off the house and clean up some personal debt, credit union (20k).

I got the original 100k from a leading bank, my problem is i have no regular income at present due to my college commitments.

With the down turn i estimate my house is at least worth €580k with a now €100k mortgage on it.

Will i find it difficult to obtain another €50k in my current situation??

Thanks

JCONN said:

my problem is i have no regular income at present due to my college commitments.

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Will i find it difficult to obtain another €50k in my current situation??

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I would imagine so. If you have no income then how are you going to service the loan? If you can service it then you must have savings which might be better used to fund the expenditure rather than servicing a loan!

I think you know the answer JCONN.
Simply put, how are you going to make any repayments on another loan of 50k without having a job.
Your future income stream is already partially indebted to the bank that gave you the 100k home improvement loan.
All you can do is wait until you are 6 months into your new job and have regular income before you approach any institution for another loan.

Well my idea is to get a new mortgage for €150k with payments beginning in January. I have a full time contract for then. The fact that 150k is only 25% of the value of my house must make a difference.

The low loan to value ratio is one thing that they will consider but I reckon that, especially in the current climate, they will be focusing mainly on your existing capacity to service the loan. Since you have no income they may be reluctant to advance more credit. Until you are actually in employment (and usually for c. 6 months+) the promise of new work is largely academic since, for example, it could fall through.

You are still presuming the value of your house is the same as it was last year, this might not be the case. Saying that €150k would not be a massive mortgage and you have already persuaded the bank to wait until January to start repayments so you might be in luck.

i have taken the down turn into my estimation, since the last valuation i have put on 2 rooms including a gym with landscape gardens so i doubt the value has declined at all. I'm based in the Midlands away from Dublin where we haven't had the market fall apart.

You have done well to get the mortgage deferred for over a year until you start work. Do you or your family have a relationship with the bank involved?
Your best (only) bet would be to go back to this bank and explain that you need to do some more work on the house as I cannot see another lender allowing you a deferred start remortgage.
Was the Credit Union loan in existence when you took out the mortgage?
If not the bank will ask what this extra 20k was used for.

JCONN said:

i have taken the down turn into my estimation, since the last valuation i have put on 2 rooms including a gym with landscape gardens so i doubt the value has declined at all. I'm based in the Midlands away from Dublin where we haven't had the market fall apart.

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I know what you mean. It was worth 580k but you reckon it still is despite the 2 rooms and the gym? I guess that makes sense - it went down but the extension has evened it out. Though it still might be worth less but you're not selling so it's not a huge issue. If you already have a gym I'm dying to know what the extra 50k is for! Not being a jealous cow I swear, just curious!

I'm based in the Midlands away from Dublin where we haven't had the market fall apart.

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Hmmm, I'm down south and an auctioneer I spoke to last week 'promised' me that my house is worth 350 - er, that's what it was worth in 2006. Also a lot of people here are saying things like "it hasn't hit here" or "ride out the storm". Frankly, that's nonsense. My house is down 25% I reckon. No proof but I feel it in my bones and soon will know it in reality (I hope - would actually be glad to get that much - will still give us something towards our next house in a few years). Anyway, as you're not selling it's not a huge issue, just wanted to comment on the "haven't had the market fall apart" bit. Best of luck. Enjoy your new career. You're very fortunate to have a house that you own 80% of outright. Try to enjoy that and balm in the good fortune rather than increasing your debts too much.

By the way, as you've drawn down the mortgage I presume the interest rate is fixed and you know what you'll be paying come January next? If you re-mortgage and put another 50k on top won't that be a whole new deal with a whole new (and significantly bigger) interest rate? Worth thinking about.

I want to put in a stable block, and then the dream will be complete, i know i'm fortunate to be in this situation but the reality is its because both my parents are deceased. I have no intension of selling at all but i think now is the time to complete the dream so to speak.

Can anyone recommend a Financial adviser who can do something for me.

Again Thanx

JCONN said:

I am now seeking to obtain another €50k to finish off the house and clean up some personal debt, credit union (20k).


I want to put in a stable block, and then the dream will be complete,

Thanks

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Sorry, I'm a bit confused... are you looking to complete the house or build a stable block?

Could you not wait a few months until you are in gainful employment when financial institiutions would look more favourably on your request?