Will we ever get a mortgage?

[coffeefiend]

Background as follows:

· Myself employed in a MNC for 8 yrs – salary €56.4k with approx. 7% bonus pa – however I am currently on a 3 day week due to illhealth.

· Husband employed for 10yrs in MNC – salary €50k

· I usually reinvest my bonus into company shares and sharematch when I can. Therefore I have approx. €30k currently vesting in shares and will be investing another €10k approx. this year (vesting period 3 years). So hopefully will have €40k in 3 years time.

· 3 kids in childcare, DH has 1 other dependant which he pays maintenance for €200pm

· Rent €950pm

· Car Loan - €30k taken out 2 years ago, 3 years left

· 2 credit cards total €1.8k which is am paying down this year

· DH has small credit union loan of €1k which will be gone by end of year.

· I’m also saving €200 per month in my credit union but this is generally used for emergencies every few months.

· We had a mortgage previously which we sold in 2008 for no gain/no loss. Have been renting since.

· There is no possibility of borrowing money from either family.

· Limerick area

So I am just looking for advice on what would be our best approach as to getting a mortgage or would you even think it is possible? I just feel like we will never get there, houses in our area where we would love to stay and where the kids are settled in range in the 250-300k range. The ultimate dream would be to build a modest home.

Can anyone recommend a good financial advisor in the area who we could chat to?

 

[Gerry Canning]

coffeefiend.

Arrange meeting with any bank mortgage person and have them talk you through your chances etc.
Particularly try to meet previous mortgage lender.

@ worst case, you will get a feel of where things are at in your case , @ best you may get pre-approval.

Let us know how you get on , because there is good advice on AAM.

 

[PGF2016]

What do you hope to get from a financial advisor? You need to have a deposit saved and show a lender that you can make the repayments to get a mortgage.

You can borrow up to 3.5 times your salary: 3.5 *100k = 350k.
You need a deposit of 20%. On a 300k house that would be 60k.
You expect to have 40k in 3 years time so you'd need another 20k.

If it was me I'd do the following:
Sell the 30k car, pay off the loan and buy a reliable car for 10k.
The credit cards are an emergency if you're paying ~20% interest on them. Put your 200 euro per month emergency savings towards them.

 

[44brendan]

I broadly agree with what PGF has advised. Ensure that you pay off the fiddly loans as early as possible. CC's immediately. Car is probably not worth 30k now but 10k will buy you a very good and reliable car and release of even 15k on the existing car will help build up your savings pot to 60K!

 

[coffeefiend]

Thank you all so much for your advice. Yes the plan is to have all little loans and credit cards gone in the next few months.
Definitely will look into trading down the car.

 

[Bronte]

Some things that stick out. No savings by DH. Very high cost to a new car 2 years ago. Not having a rainy day fund. Not managing the budget properly as your 'savings' of €200 are always used up. But three kids is not easy financially.

I know Limerick and I'm surprised that is the price needed for a decent house.

Credit card debt is a no no and a very bad habit. Does DH not have share in the CU?

With two good salaries I don't see why you shouldn't be able to get a mortgage once you have enough of a deposit. You also have to factor in legal and furnishing costs.

Why do you want to build, is that realistic.

Apart from what you are eligible to borrow, it would be good to figure out what you can afford. As much for yourself as anybody can you do out a full income and expenditure of all your outgoings (have a look at the money makeover layout to see how it is done)