Advice Buying A House Plz

Fry

Hi everyone

I need some advice about buying a house. I currently have a house with a E70k mortgage fixed for one yr until next Feb with the BOI. My house is worth E200k.

I have seen a house for sale that I must have for E240k. It will be ready in 4-5 months. I can put a 10k deposit on it now to keep it from being sold.

Does anyone have advice what I should do? I realise I will be penalised by BOI for breaking my fixed contract, will this be alot ?
I will be going in to the bank next week anyway, but I'd like to get other people ideas that had been in the same situation before. Stamp duty is a bastrad, @ 4% (E9,600).

I suppose my main worry is that everything would go smoothly. My house is in a gr8 area in Tralee (Manor), so I dont think I'd have problems selling it, I guess it's all about TIMING!

Thanx in advance:)

spongebob

Originally posted by Fry

Does anyone have advice what I should do? I realise I will be penalised by BOI for breaking my fixed contract,

Leave it late as possible b4 u break the fix , could be november by the time the lawyers are finised with it. The stamp duty threshold is €254k for 5%, IF u bust that u must agree written contract €249k and the rest in cash in a brown envelope, fittings like.

the hit on breaking the fix will be well less than the stamp duty.

see www.finfacts.ie as well

antoinolachtnai

they have a little formula for calculating the break penalty. As far as I can remember, it's based on the difference between the current variable rate and the fixed rate, and the amount of time left on the fixed rate.

It is worth asking them if you can carry over the fixed-rate to the next mortgage. There is no reason in principle why they should not allow this. It might be advantageous for the lender, in fact, because it locks you in for your new mortgage, which is good for them.

a.

dmeehan

i suppose the best thing to do would be to talk to the bank

as already said, i can see no reason why they wouldnt allow you to carry over the fixed rate to a new mortgage

what was it fixed at?
you cant be too badly affected by the penalty if you have a "spare" 10K available for a deposit on another house:D

Hyzepher

One thing you might consider is to change lenders - especially if BOI are going to charge you for breaking your fixed term. You are going to need a solicitor anyway to buy the new house/sell your own and that is generally the biggest expense when changing lenders.

The advantage of changing lenders is two fold. Onr you will be 'new business' for them and most do a special 'new business' rate - which you can fix. Secondly, the interest rates are much lower now than anything you will have fixed 1 year ago.

You might find that by changing lenders that you will be better off even with the penalty BOI give you.

This is, of course, depending on another lender accepting you. If there is a First Active where you are, try them - they are a newish bank and always ready to steal business from the big boys.

Hyzepher

dmeehan

I think AIB are curreently the lowest in the market

also, when I got my mortgage with AIB i got a special new biz 1 year fixed which was another 0.5% lower than the variable

spongebob

If he looks liek having a 60% mortgage (or less) on the new house then he should look at the guaranteed low interest mortgages called trackers.

Trackers are typically 1% over base rate and change up and down immediately (unlike normal mortgages where custs in ECB rates are rarely passed on in full)

A normal mortgage is 1.5%-2% over base rate on average.

They are sniiify about income ratios, a 2.5+1 ratio between the loan and household incomes would mean that one income in the house must be €35k and the other €25k or so. NIB and BoI both do tracker mortgages as do Bank of Scotland. While AIB have been tracking over the past 3 years they refuse to guarantee their rates (I asked them straight out)

If you borrow more than 60% of the cost of the house, or if your loan exceeeds the ratios above, you will not benefit from this.

It is seriously better than a fixed mortgage IMO, you can overpay the mortgage if you have a few squids spare...such as when the SSIA comes in in a few years.

Meanwhile, fatten that SSIA calf rather than overpay your mortgage.

M

uzami

What's your income / how much are you looking to borrow?

Could you leave the current house as a rental for the foreseeable future?

Breakage penalty will be pennies, don't let it be a concern. Let BoI waive the fee in return for securing the new mortgage. If they are unwilling to do this, go to another lender and take a small hit.

Fry

first of all, i appreciate all the replies

im meeting my mortgage fella tomorrow to discuss it

He told me my mortgage is E98000
I have E30000
My house should make E195000- solicitor(1950)-autioneer(3900)=189150
The NEW house is E240000 + stamp(9600) = 249600
=189150-98000+30000 = 121150

=249600 - 121150 = 128450

My new mortgage will be 128450 for the New house, which is about 50% of the mortgage I have to borrow.

Is this about right ?

Fry

How big is a normal mortgage nowadays anyway?

uzami

i note that you have included solcs fee on sale of house....don't forget solcs fee, up to 1% on purchase.

Average mortgage=??? dunno.

You'll need a salary in excess of €30k to get €128k

Victor

Originally posted by Fry
My new mortgage will be 128450 for the New house, which is about 50% of the mortgage I have to borrow.

Give yourself some breathing space with this.

Are you considering gettting a bridging loan or a completely new mortgage?

Will moving into another house move you from first-time buyer status and reduce you mortgage interest relief?

Fry

Are you considering gettting a bridging loan or a completely new mortgage?

new mortgage hopefully

Will moving into another house move you from first-time buyer status and reduce you mortgage interest relief?

Very good point, I guess I have to ask this tomorrow