Small mortgage for refurbishment refused

M

Mothergoose

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I have a holiday home which I am going to retire to that needs some roof work, a rewire and a replumb. The total cost is 35k. I rang Bank of Ireland, where my mortgage on the property is 1247, or 29 per month. I have no other mortgages and two other properties and Irish rental income as well as a salary of Stg 60k. I have savings of 25k in my BOI account, but I didn't want to use these, or other savings - I might need them, but instead was hoping to take a mortgage over 10 years at variable rate, and pay it off probably no later then 5 years.

They said that I met the criteria for everything except being a regular saver with them, and that since the 20k was sitting in my BOI account for 3 years, I couldn't be seen to be a regular saver, and that I would have to demonstrate 6 months of saving 500k per month into my BOI savings account. I have had a mortgage with them since 2008 and have never missed a payment.

I also have rental income, but they say they don't take this into account. Is this normal for bank? I was hardly asking for a huge amount, and I have a good salary, other mortgage free properties and rental income. Is there anywhere else I can go? I know some banks will have an issue of not being currently tax resident in Ireland. All my properties are in Ireland. I am only working abroad temporarily for a few years.
 
Mothergoose said:
I would have to demonstrate 6 months of saving 500k per month into my BOI savings account
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Presumably you mean €500 per month

I think we mentioned you doing a Money Makeover in the past but can't seem to find one for you, as you appear to have a lot going on between properties, pensions etc.? You did get advice alright on your pension and semi-retirement. It seems madness to be borrowing and paying unnecessary interest when you mention 'I have savings of 25k in my BOI account, but I didn't want to use these, or other savings'.
 
Oh! My God! yes, I mean 500 euros a month! I don't have a lot of savings - 60k only - and I don't want to use them in case other problems arise with the house, I become ill etc., much easier for me just to pay 400 or 500 a month, and then when I have extra money to throw it at a mortgage. Re pension, yes I got my small pension, but only after writing to Ombudsman, and letting the pension company know this with a copy of the letter. I got my pension then in 10 days.
 
Mothergoose said:
Is there anywhere else I can go?
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What about Credit Union?

You do seem to have a complicated set of circumstances & I wonder if you are considering all aspects?

Not so long along you were moving long term to the UK for work & clearly that didn't work out.

I think a money makover process would be very helpful, both for you and all the folks trying to give advice here.
 
Mothergoose said:
I have a holiday home which I am going to retire to that needs some roof work, a rewire and a replumb. The total cost is 35k.
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Could you breakdown those 3 costs. Have you heard about the refurbishment scheme. You might be eligible for that. It's worth up to 50K.

Alternatively can just save 500 Euro a month for 6 months and do the renovations next March.
 
35k seems a lot for what you describe.

I just had a complete rewire of a 3 bed semi for 7k inc VAT.

What is the 'plumbing'? Heating? Bathroom?

What is the extent of the roof repairs?

Can you split the work into stuff that has to be done now e.g roof repairs & stuff that can wait e.g. bathroom refurb? And do them as you go along.
 
The quote I got for rewire is 8k, replumbing 9k, roof 16k - roof is sagging timbers need replacing in half of the roof.
 
Hi! All, I am living in the UK. I don't intend to retire to my holiday home until 2026, but I am getting it in order so that I have everything done by the time I retire fully. I have another property to sell, but I haven't sold it yet, and will semi-retire next year if I sell this, and still continue to work in UK but part-time until 2026 until I retire to my holiday home. I was hoping then to work remotely from my holiday home - but haven't looked into this enough yet to see if it would work.
 
Mothergoose said:
They said that I met the criteria for everything except being a regular saver with them
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They didn't have any issue with the fact that you are living outside the jurisdiction? I would've expected that to be a potential barrier to obtaining a loan.
 
DannyBoyD said:
I thought @Mothergoose was refurbing cottage in Ireland?
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The one in Galway mentioned here?

To semi-retire or not

I am 58 and working in the UK for last 6 months. Previously worked in Ireland part time in healthcare for 30 years.3k a year pension from that. Worked in UK in mid 90s and kept up my voluntary NI contributions when I returned to Ireland 20 years ago. Won't have full UK or Irish State pension...
www.askaboutmoney.com
 
Hi! Clubman,

The property is in Co. Galway - overlooking the sea. Built as a estate of holiday cottages - 8 in total in late 70s. All but two are lived in permanently now. Detached. 1/4 acre garden. |Needed massive upgrade to insulation - I got walls pumped about 8 years ago. The plumbing is for new bathroom - I want wet room - there is a bath with shower there now - but I have arthritis in my feet, so need a good wet room. It was recommended that if the electrics be updated now if I intend to live there in retirement - the electrician discussed smart wiring with me - but actually I haven't got my head around it yet. The roof that needs to be done was an extension done in late 80s - the house originally belonged to a second cousin of mine - the roof is torch on felt - I have had it redone twice, but some of the timbers - not too many are decayed from water ingress over time. The cost of replacing timbers and doing fibreglass roof is 16k.

Another issue is that, for some strange reason, there was an LPG scheme for the whole 8 houses - so weird, rather than oil, as oil would have been so much cheaper. LPG is very expensive heat. Also stRange for that time, there was no back boiler, but open fire. I replaced with stove. Got turf from my cousins who used to deliver it once a year - but I can't keep asking them to do that, as they are in their 60s and need it for themselves. Was thinking of getting pellet stove, and also changing LPG to oil, but again that's more money.

Re the loan - BOI had no issue with giving me a loan when working outside the jurisdiction. I have BOI Ireland and BOI UK accounts. Re doing the work piecemeal - it's difficult to supervise this piecemeal from abroad. If I was to get it all done in one go - I would just come home every weekend for a while. I only work Monday to Thursday in UK, and would take two weeks holidays also, to supervise everything and make sure it was all going to plan.
 
ClubMan said:
They didn't have any issue with the fact that you are living outside the jurisdiction? I would've expected that to be a potential barrier to obtaining a loan.
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Why should it be. Irish people gets French loans to buy property in France etc. And I have borrowed money in Ireland while abroad. Apart from EU rules, lending to people in England for property in Ireland would be pretty mainstream.
 
Gordon Gekko said:
Just pay for the work yourself and then divert the money you would have been repaying back into your savings.
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Agreed - a sagging roof is the problem I'd tackle, and then over time deal with the other 2 issues.
Credit unions do home improvement loans, not sure if that is an option for you.
 
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