Topping up

M

maryburke

Guest
We need to finish our house, plan to build a garage, tar the drive, finish off lawns and a general tidy up. We are thinking of topping up our €100,000 mortgage by another €30 - €40,000, (depending on the cost of garage construction etc etc)

We cannot see any other way of finishing our house without borrowing money.

we live in the countryside and the property is worth over €400,000 as it is, and with the finishes we plan it could be worth well over €500,000.

We are with First Active at the moment, what do ye all think??

thanks in advance

mary
 
maryburke said:
We are with First Active at the moment, what do ye all think??
Click to expand...

As ye will have (in a worst case scenario) a €150k mortgage on a €400k house (30% of the value or 30% LTV) I'm sure that ye can remortgage anywhere you want so look at the cheapest deals around on mortgages under €250k in total . NIB and Ulster do trackers as do bank of Ireland. Expect to mpay no more than 1% over the base.

Ye may also consider whether to reduce the term which will have a beneficial effect on the mortgage insurance . A person on a normal income (40k say) would get a 25 year term or a 20 year term even .

Get insurance quotes for the same amount for 20 years and for 30 years and see what I mean.

work out monthly payments below allowing for term and rates . Assume the cheapest tracker you will get is 1% over the ECB rate which is 3% meaning a 4% interest rate today before other rises kick in.

http://www.jeacle.ie/mortgage/ie/
 
First Active will allow you to top up by €65,000 or 80% of the property value (whichever is the lower) with no legal fees of outlays. You might have to pay for a valuation but that's all. Given that the cost work should add to the value of the house and assuming you can afford the repayments then why not?

Sarah

www.rea.ie
 
I dont mean to hijack your thread Mary but I am in a similar situation myself.
The one drawback I can see with topping up by that ammount is that you will not get tax relief on the additional loan of 40K. If you were to remortgage for a total ammount of 140K you would receive a better tax break.
TSB are offering us a top up (as opposed to remortgage) with the incentive that there are no legal fees involved. Other lenders (brokers?) will offer to do a complete remortgage and refund legal fees.
 
Will you be able to satisfy First Active that your income can cover your additional repayments?
 
We should be able to satisfy FA that we can afford the extra payments, we are now thinking of doing a complete re-mortgage, as it will probably work out cheaper in the end, my husband is self employed since last year and I've been onto our accountants to get figures, it seems we will only have figures for 6 months, I work full time though, do you think this will cause a big problem, or is there a way round it, we have been with FA since the beginning (8 years) and have never defaulted on a payment.
 
Normally, they like to see three years audited accounts. You will certainly need projected earnings. Is your own income enough to satisfy the borrowings? If your husband is a tradesman or professional I don't see any problem. Your previously history will certainly stand to you as will the fact that your total borrowings are a small percentage of the value of your home. Generally anything that adds value to the property is seen as a plus.
 
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