Mortgage: How much could I get?

Rabies

I'm 26 and thinking about buying a house in the next year or so.
Currently paying out nearly €300/month in rent. Might as well put it towards my own place.
Currently I earn €26k/year. As I work for my father he puts me in for €6k in expenses a year.
This could be a bit of a problem. Do expenses count as earnings when a bank is calculating how much to give you.

Any idea how much a bank would give me.
I don't have much time during week days to make an appointment and talk to a mortgage advisor in a bank.

godtabh

Rabies wrote:

I'm 26 and thinking about buying a house in the next year or so.
Currently paying out nearly €300/month in rent. Might as well put it towards my own place.
Currently I earn €26k/year. As I work for my father he puts me in for €6k in expenses a year.
This could be a bit of a problem. Do expenses count as earnings when a bank is calculating how much to give you.

Any idea how much a bank would give me.
I don't have much time during week days to make an appointment and talk to a mortgage advisor in a bank.

Your best bet is to go to a broker or bank or which ever you prefer. Each case is different. Some places offer 3 times your anual wage. Some 5. Expenses and bonuses are taken into accont. So is the rent potential (if you go that way)

Tell also base there figures on things like loans and any other out goings.

MikeHunt

They'll offer you something like 180,000 on that kind of salary. A parking space in D4 perhaps.

Might as well talk to your bank though, it wont be an hour long meeting or anything. You certainly don't need to dress up or try to impress them otherwise, at the end of the day they want to have your business. Just bring along your P60 and 3 months of statements (if you're shopping around in banks other than your own that is)

scsa

I've been thinking about grabbing on to the property ladder too and I've checked out a few of the online calculators on the banks' websites. Based on my current wages I'm not going to get enough for anything inside the M50....

But, a friend of mine who's already been through buying a house told me that the online estimates are about 10% less than what the banks actually offer you when you apply in person (a bit like the asking price on houses).

Anybody else found that to be true? A bump of 10-20% would just about scrape me a wet hole of a 1 bed flat. The only other option would be to click one of those russian bride pop-ups and put her wages down as a second applicant...

unklerosco

scsa wrote:

The only other option would be to click one of those russian bride pop-ups and put her wages down as a second applicant...

Supercell

Hmm. forget about it is my advice, i'm earning about 40k and that gets me a 220k loan..ie a parking space in Dublin.

The only option now is affordable housing, or couple buying, the single income earner mortgage payer of the 80's and 90's is gone.

godtabh

Longfield wrote:

Hmm. forget about it is my advice, i'm earning about 40k and that gets me a 220k loan..ie a parking space in Dublin.

The only option now is affordable housing, or couple buying, the single income earner mortgage payer of the 80's and 90's is gone.

You should be able to get more than that from my experience any way.

A thing that is becoming very common is that people are buying with freinds partners etc. You can double your buying power then but you would want to make sure you buy with some one you know you wont fall out with in 5 mins. Also get all the legal stuff sorted out so you dont have any problems when some one wants out!

scsa wrote:

I've been thinking about grabbing on to the property ladder too and I've checked out a few of the online calculators on the banks' websites. Based on my current wages I'm not going to get enough for anything inside the M50....

But, a friend of mine who's already been through buying a house told me that the online estimates are about 10% less than what the banks actually offer you when you apply in person (a bit like the asking price on houses).

These arent a good thing to go on how much you can earn. They dont take into account alot of things.

The_Conductor

A rough rule of thumb (depending on which institution you are dealing with) is 5 times the main salary + 3 times the second salary. Overtime or bonuses are counted towards this, expenses are *not* (this is the case with BOI, AIB and NIB).

The amount a particular institution may be willing to lend you after the above rule of thumb depends on the equity to loan ratio (i.e. if you are getting assistance towards buying the house from a parent/friend and are not looking for a 100% mortgage they will look more favourably on giving you more, as you are less of a risk to them).

Usual things thereafter- your credit rating etc.

FYI - the 300 a month in rent you are currently paying out will currently service interest payments on a mortgage of about 80,000 Euro (note: interest payment- nothing else). For arguments sake allowing for a mortgage of 200k (not massive) your *interest payments* alone would be almost 1,100 per month. This is before any other bills, and without any capital repayment. Can you afford this? 200k is not a big mortgage- and you would have all the other bills to factor into this too......

Rabies

They'll offer you something like 180,000 on that kind of salary. A parking space in D4 perhaps.

€180K would be nice. I live in Tipperary, don't need to worry about over priced property in Dublin. Things are a little bit cheaper here.

smccarrick, I probably could just afford a repayment like that. But the idea I have is to buy a small 2/3 bed house in my home town and rent out a room to help pay the mortgage for a while.

It is getting very hard to find affordable property for a single person. Really need to combine two salarys to get any where decent

unklerosco

smccarrick wrote:

For arguments sake allowing for a mortgage of 200k (not massive) your *interest payments* alone would be almost 1,100 per month.

Depends on the loan term.. over 25 years itr be about 1,050... over 35 yrs itd be 850...

Easily achievable by renting out a room.. being 26 his options are well open.

MorningStar

Longfield wrote:

Hmm. forget about it is my advice, i'm earning about 40k and that gets me a 220k loan..ie a parking space in Dublin.

The only option now is affordable housing, or couple buying, the single income earner mortgage payer of the 80's and 90's is gone.

You could easily afford something in Dublin for that. It might not be the best but it is worth doing for a home. Out of people I know those who bought further away from the city centre for "better" houses rather than a smaller house closer the people living closest were able to move up the ladder quicker.

The truth is you have to get on the ladder at some point if you want property and buying the best value property to get the place you want latter is one way. Another way is buy something you want miles from where is convenient. I would always say buy closest because if you change your mind later you can move out further for a better property. In the other option you are unlikely be able to do the reverse as property prices tend to rise faster and higher in areas close major centres.

The truth about the 80s and early 90s is less people wanted to buy on their own and importantly very few could due to unemloyment. More people are staying single(also becoming single) and are employed so demand has increased. Supply is catching up on the plus side. A lot of people who could buy on their own in the past were doing better than the average person. Even though more people are at this level now only those doing better than average can afford.

parsi

smccarrick wrote:

A rough rule of thumb (depending on which institution you are dealing with) is 5 times the main salary + 3 times the second salary. Overtime or bonuses are counted towards this, expenses are *not* (this is the case with BOI, AIB and NIB

How things have changed - when we got our mortgage it was closer to 2.5 times main earner and 1x the second salary...

The_Conductor

parsi wrote:

How things have changed - when we got our mortgage it was closer to 2.5 times main earner and 1x the second salary...

Yup.....
While it may be a sellers market for property, its very much a buyers market for credit. Banks are bending rules in desperation to hand out more money. It will be interesting to see how thing develope now that interest rates are firmly on an upward trachetory.

unklerosco wrote:

Depends on the loan term.. over 25 years itr be about 1,050... over 35 yrs itd be 850...

Easily achievable by renting out a room.. being 26 his options are well open....

Initial interest rates will be what matters at the start of the mortgage (as inflation will lower the absolute cost of the mortgage in the long run). At the very beginning of the mortgage the only difference in repayments will be the amount of capital being repayed- which will be quite small. It will only be a few years into the mortgage that it will make a big difference.

Re: renting out a room- it wouldn't be a problem in Dublin but not sure how achievable this might be in Tipperary......