help needed--Simple enough mortgage question

Rockstar*

Hi guys,

Apologies if I sound like a simpleton in this post but I'm literally too embarrassed to meet my mortgage broker/bank about this until I know at least something about taking out a mortgage.

I have around e80k inheritance and earn approx e25 annualliy in a well respected job (also a lot of room to progress)

a) I am wondering what would be the best think to do, I would prefer to pay as little as possible for deposit and pay monthly repayments rather than use up my lump sum which I would prefer to use for more enjoyment or emergency money while im still young!

b) Anyone got any idea what kind of mortgage sum they would be able to offer me?

As pointed out above im sorry if I come across as a simpleton but would greatly appreciate some advice on the above as I would like to go into the broker/bank this week.

Appreciate our help

R*

eve

I assume that you are looking to buy on your own? Have you got a parent or someone else to go guarantor? How much are houses in the area you want to buy?

25k isn't a huge amount of money but it depends on your location and what kind of property you want as to how far it'll go.

If you are anywhere Dublin the 25k on it's own just won't cut it. However if you are down the country and can tell a bank that you have 60k cash (keep 20k for emergencies/future plans) to put towards a house then that may make up in the shortfall of salary.

As to how much you would get, it depends on what sort of outgoings you have. They will look at things such as car loan, personal loan, dependents, etc. There's a lot of variables involved. If you were to put forward 60k then you may get the go ahead for a property around the 185 mark. But I'm no expert in this and you need to see a broker/bank for more details.

Rockstar*

Thanks for the reply eve,

Unfortunatly I do not have anyone to go gaurantor. Both parents passed away recently and I have two brothers who are both living with their own wives - have their own commitments/investments.

im in a bit of a sticky situation whereby i need to buy somewhere, have this 80k and live in dublin (want to stay in dublin).

Im 25, I have a very good job which, If I left, could easily command between 30 and 35k but want to stick with my current role for many reasons until next year (long story in itself)

Again appreciate the help thank you

R

starky

Rockstar* wrote: »

Thanks for the reply eve,

Unfortunatly I do not have anyone to go gaurantor. Both parents passed away recently and I have two brothers who are both living with their own wives - have their own commitments/investments.

im in a bit of a sticky situation whereby i need to buy somewhere, have this 80k and live in dublin (want to stay in dublin).

Im 25, I have a very good job which, If I left, could easily command between 30 and 35k but want to stick with my current role for many reasons until next year (long story in itself)

Again appreciate the help thank you

R

With 25K the absolute max I reckon you would be able to borrow would be around 160,000 which aint going to buy you didly in Dublin unfortunately. When you add on your 80k though you are looking at having about 240 to spend, which is more realistic for Dublin, say a small one bed apartment or something. Of course I will forgo the usual, *you’d be mad to buy now* lecture as I am sure you are aware that the housing market aint looking so hot at the moment, and that there may be better bargains to be had six months from now.
If you could bump your salary up to 35K you could probably borrow about 230,000 I reckon so if you want to hang on to some of the money you have you will most likely have to try and get a better salary. you should go to the bank they will better answer all your questions and will not think any of them are stupid.

Alternatively you could use the 80k to rent a nice penthouse apartment in D4 and buy your self a nice new BMW. ;-) (that’s a joke before people start complaining)

jdivision

At the moment you could probably borrow e200k but that's based on you having the 80k in some sort of account. I don't know where previous poster is getting e160k from based on earnings of 25k. That'd be nearly 6.5 times your salary. In reality, the most times salary banks offered was around 5 times unless you were a doctor or something.

am i bovvered

Maybe you should put 70k into a high interest saving account until you are ready to move to a better paid job,which will enable you to get the mortgage you want, enjoy yourself with the 10k, but make sure you have fully paid any debts such as credit card, car etc as this will be to your advantage when you are ready to buy a home.

You are still young and the indications are that the property market is not going to rise in the next year so you have nothing to loose.

starky

jdivision wrote: »

At the moment you could probably borrow e200k but that's based on you having the 80k in some sort of account. I don't know where previous poster is getting e160k from based on earnings of 25k. That'd be nearly 6.5 times your salary. In reality, the most times salary banks offered was around 5 times unless you were a doctor or something.

I just got it from a quick quote mortgage calculator ... I suppose it is kind of high alright I did not really think about the figure it gave me back TBH :-)

gamer

you will be able to able to get a mortgage 50/50 ,from dublin city council ,ie they give you mortgage on say a 1bed 22o k apartment,50percent mortgage,50percent rent,then after 3years ,you should be able to switch to 100percent mortgage,its easier to get council mortgage on apartment , as the do a fairly strict survey as regards ,property structure,,it must be in good nick,
when you switch to 100percent mortgages ,you,ll have 2 pay a solicitor,legal fees, and its up to you to apply after 2 years 4 100 percent motrgage,
look at dublin city council website, this is not social housing , its kindof a scheme to help people on lower incomes get on housing ladder,its not well publicised, you can buy any house,apartment anywhere in dublin , provided it meets their criteria, is in good STRUCTURAL condition.i,d say you qualify for 24ok loan approx, any1 working fulltime in dublin ,can apply for this ,apply direct thru the council housing department.IF there s repairs to be made on the house,nopoint in applying 4 this type of loan.good idea now ,start saving x amount per week,shows that you are a reliable payer,financialy stable.its for ftb,s abit more expensive ,cos your paying x amount of rent 4 2years ,which you,ll never get back.

SarahMc

I think you would be crazy not to go for affordable housing, either the scheme or the initiative. You earn low enough to qualify, and your lump sum means that your mortgage will be affordable.

johnnyskeleton

Rockstar* wrote: »

Hi guys,

Apologies if I sound like a simpleton in this post but I'm literally too embarrassed to meet my mortgage broker/bank about this until I know at least something about taking out a mortgage.

I have around e80k inheritance and earn approx e25 annualliy in a well respected job (also a lot of room to progress)

a) I am wondering what would be the best think to do, I would prefer to pay as little as possible for deposit and pay monthly repayments rather than use up my lump sum which I would prefer to use for more enjoyment or emergency money while im still young!

Don't buy now etc. Rent instead. Your lump sum will accumulate interest in a decent savings account (although try to stick to the established banks if possible), while the rent you pay will in all probability be less than the mortgage interest you pay, the loss you wil make in the reduction of the house value, and the costs of buying/equipping a home. Moreover, in a few years you will be earning better money in your job and so you can shoulder the risk a lot more comfortably.

That said, if you have to buy, consider an offset mortgage from First Active or National Irish Bank. These ofset your savings i.e. €80k against the mortgage amount e.g. €200k, so you will only pay interest on 120k while retaining the freedom to spend the 80k as you need.

I should also say that when earing €25k p.a. you get approximately €1900 per month. A €100k mortgage will cost in excess of €600 per month in repayments, and could be more. A €200k mortgage will cost in excess of €1200, leaving you €700 for food, bills, managment costs, social life, transport, medical, insurance, holidays etc, and that's quite hard to do. Forget about joining gyms, getting digital tv or broadband etc

Rockstar*

Some very helpful posts indeed, Thanks for this guys!

Affordable housing I have pondered over for a long time now but have decided I dont want to go down that road.

I didnt know about the council idea which sounds interesting I will look into it.

A guy in work (Financial advisor studying to be a mortgage advisor) reckons I should easilt command a mortgage of e350 if I go to a few brokers ,,, I didnt have time to ask him more but should know by tomorrow!

DublinDilbert

Rockstar* wrote: »

Some very helpful posts indeed, Thanks for this guys!

Affordable housing I have pondered over for a long time now but have decided I dont want to go down that road.

I didnt know about the council idea which sounds interesting I will look into it.

A guy in work (Financial advisor studying to be a mortgage advisor) reckons I should easilt command a mortgage of e350 if I go to a few brokers ,,, I didnt have time to ask him more but should know by tomorrow!

The problem isn't "commanding" a certain amount, the problem is paying it back.... what the others on the forum have been trying to help you with is how much your repayments would be and how much disposable income you would have after them repayments...

You'd also have to question what sort of "finical adviser" would advise someone who makes €25K to take out a mortgage for €350K!

jdivision

What percentage of your income would the repayments on 350k be? I'd estimate it'd be close to your monthly salary. So you'd be living on the 80k. What happens when that runs out and you own an asset that's probably fallen in price?

starky

Rockstar* wrote: »

Some very helpful posts indeed, Thanks for this guys!

Affordable housing I have pondered over for a long time now but have decided I dont want to go down that road.

I didnt know about the council idea which sounds interesting I will look into it.

A guy in work (Financial advisor studying to be a mortgage advisor) reckons I should easilt command a mortgage of e350 if I go to a few brokers ,,, I didnt have time to ask him more but should know by tomorrow!

By the way if you are interested in Affordable housing in the Dublin city council area then you should know that the latest DCC affordable housing newsletter came out yesterday. This is basically a list of all the available properties for the next phase of DCC’s affordable housing scheme. You need to get on the AH list and get a copy of this letter and send in your preferences before the 11th of April. After that date this section of the scheme will be closed and you will have to wait a good 8/9 months most likely till the next lot of affordable houses come on line in Dublin city. So if you want in you will have to get going on it!

gamer

basically the council gaurantee,,your mortgage,my advice look at a house ,on apartments ,you pay 1000plus,service charges,there can be problems,with noisy neighbours, all you need is 2 or 3 units rented out to sum1 on ,rent allowance,could be security problem,they start leaving the front door open 4 their pals, its a lot more risky,than a house, you pick out house ,in your area,its your choice, go to council apply 4 aloan,you might get 300k,on a coucil50/50loan,or more.i can see some apartment blocks,losing value as people sell up,units are rented out.

tHE vAGGABOND

A guy in work (Financial advisor's studying to be a mortgage adviser) reckons I should easilt command a mortgage of e350 if I go to a few brokers

I find that *very* hard to believe. if they do, they deserve to be shot!

I was cleared to borrow up to 330k on my own, with a sizable deposit and an annual income a decent amount more than you..

Now my repayments on the loan [less than your 350k] alone are going to be 1600 quid a month over 35 years? Thats not counting mortgage protection, and all the other bills a house holder has to pay [light, heat, tv, phone etc etc]

Can you afford to pay circa 1700/1750 a month before you eat a thing or drink a drop or even get to and from work? On 25k I really doubt it?

Remember a sizable proportion of your 80k will be used as a deposit, as you wont be getting a 100% mortgage, not anymore. You will have to pony up 8% odd of the house price as a deposit..

seamus

Sit in your €80k for the moment. If you're fairly confident of your salary increasing by €10k within a year or two, then there's no harm in holding off. By the time you're ready to buy, you should be able to get a small house or a good size 2 bed apartment with your €80k and good salary.

BC

Rockstar* wrote: »

A guy in work (Financial advisor studying to be a mortgage advisor) reckons I should easilt command a mortgage of e350 if I go to a few brokers ,,, I didnt have time to ask him more but should know by tomorrow!

Even if you take the 80 grand off the 350, its still 10 times your 25K salary.
I'd be shocked if any bank gave you that.

Why are you not interested in the affordable housing option? Sounds like a god route for you.