Mortgages for self build- anyone getting them and %

clarelady

Hey We are in planning stages and wanted to start having a look at mortgages and if we would get one, with the current climate and all. Would love to hear people who have got them recently and if so what % are banks giving ie 100% of build cost or another %.We have site for free (family ) so only need build cost , so on a total basis what % would we get based on peoples recent information. We unfort have another house in Dublin that we wont be able to sell - so will rent out this which should more or less meet mtg payments but this prob will be a negative for us, so would be interested to hear of anyone in similar situation. thanks

galwaytt

Not my own personal experience, but more that of client's that I meet on a day-day basis.

Quite apart from getting one, no-one seem's to be getting 100% of build cost. The majority seem to be in the 80% range. You won't get any 'brownie points' for getting the site for free - esp if they deem your ability-to-pay the build cost is on the margin's.

Personally I'm not sure whether having an existing property is good or bad - bear in mind interest rates are going up, and the mortgage you'll get offered will be variable -the day's of Tracker Mortgages are long gone.

bruschi

galwaytt wrote: »

Not my own personal experience, but more that of client's that I meet on a day-day basis.

Quite apart from getting one, no-one seem's to be getting 100% of build cost. The majority seem to be in the 80% range. You won't get any 'brownie points' for getting the site for free - esp if they deem your ability-to-pay the build cost is on the margin's.

Personally I'm not sure whether having an existing property is good or bad - bear in mind interest rates are going up, and the mortgage you'll get offered will be variable -the day's of Tracker Mortgages are long gone.

the site can count as the deposit amount, thereby meaning you could get 100% of the build, but thats not difinitive. It worked in my own case that instead of a deposit, the site was taken into account. but a lot of factors determine it firstly, and its more down to personal situations rather than a general rule of thumb.

wclarke20

We got a 100% mortgage for a self build. Hopefully we’ll only be using 2/3rd of the amount we got approved for. They took the site into account, no deposit needed but as the previous poster said, it may just be on a case by case basis.

*WKD*

We had terrible trouble getting ours.....due to dh on a rolling contract and deemed not permanent thanks to the Dept of Ed....finally got ours approved through Haven - rates are a wee bit higher but not crazy!! It was a mortgage broker that helped us get ours.

clarelady

Wclarke, can i ask who in the end you got your mortgage with and I presume this was all recently enough
i think the one thing against us may be the current mtg we have already

JuniorB

Any decent broker should be able to tell you whether you will get a mortgage or not.
From my experience banks tend to look more from the ability to repay side than the actual loan amount % side but that may not be true any more.
From that perspective most banks will NOT take rental income for your second (current) house into account. They will add 1/2% to your interest repayments on that and stress test you on that. I know that PTSB used to let you include rental income in your figures but this may have changed.
They also add a figure for kids e.g. if you have 2 kids they will say it costs 300 each to feed, cloth etc etc which will reduce your ability to repay.

As was said previously it will come down to individual basis. Most banks are not giving mortgages to anyone - a broker should know who's in the market now and who's not.
Best of luck..

kaoder

Hi there,

My partner and I just got a mortgage last November for a self build. The process was pain staking...We dealt with the bank directly which if I had to do it again I would have went with a broker. The lady in the bank we used was awfully slow at processing it, and just didn't seem to be interested or care. We had to wait a month before we found out we were eligible for the mortgage, originally she told me we would find out in a few days. For the month I was like a hyena pouncing on the phone when it rang just encase it was the bank calling about our mortgage. I would also say she got annoyed with me ringing every couple of days looking for an update. Don't get me wrong I am delighted we were approved in the end but I would go with a broker if at all possible..

wclarke20

clarelady wrote: »

Wclarke, can i ask who in the end you got your mortgage with and I presume this was all recently enough
i think the one thing against us may be the current mtg we have already

We went with EBS in the end. We go t approved in the past few months. Didn't draw it down yet though so hopefully there'll be no problems when i go to do that.

e30fitz

hi everyone very interested in all of the above would love to hear your opinions on my situation i have a site my name with fpp for a 2450 square foot house. i earn 35000 a year and herself earns 18000 i have a loan that was 9000 down to 2000 and herself owes 2000. Big problem is we have no savings and bothour accounts are using the overdraft and out again whe when we get paid (monthly). would i be laughed out of the banks if i go looking for 180000 or 200000 mortgage . also we have been renting for a year 700 a month nevr miss a payment and all the bills paid.
would love to hear what you all think
thanks!

galwaytt

wclarke20 wrote: »

We went with EBS in the end. We go t approved in the past few months. Didn't draw it down yet though so hopefully there'll be no problems when i go to do that.

...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....

JuniorB

galwaytt wrote: »

...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....

+1. With weather hold ups etc our build was very slow to start. Ours elapsed after 6 months. Had to get re-valuation done (which dropped the market value of finished house). As we were on LTV we had to reduce our loan amount to stay within the LTV ratio.
FYI you will need a valuation done when house is completed also. If on LTV this may have an effect also.
Advice - although the valuer works for the bank - you generally get to pick them, do your research and pick wisely!!

Also try and have the minimum amount left for you last drawdown, it's the hardest to get. Banks may or may not agree but worth trying.

Best of luck

biddyearly

galwaytt wrote: »

...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....

I would agree with Galwaytt, Make sure you draw down some of the mortgage before the offer expires, This is usually 6 months. Also i have seen in one or two cases where the financial institution has reduced the mortgage that it origionally had given even after a few stages had been drawn down - claiming that build costs had now reduced and therefore the full mortgage was not needed. Again as another poster said, try to front load the mortgage leaving as little as possible at the end as they are very slow to pay out the final stage (completion) these days.

galwaytt

update: I have asked two people who are building, this question, inside the last week.........and got 2 different answers...

Example 1: client owns site (farm), no credit given for ownership of site, and 80% LTV.

Example 2: client bought site, has some savings, 'credit' given for site, and 80% LTV.

So, like anything else to do with banks: it's completely inconsistent. Nothing new there, then.......:rolleyes:

just do it

clarelady wrote: »

We unfort have another house in Dublin that we wont be able to sell - so will rent out this which should more or less meet mtg payments but this prob will be a negative for us, so would be interested to hear of anyone in similar situation. thanks

They will stress this by adding 2% to your current rate which I hope to God is a tracker for your sakes! Being in Dublin is an advantage, they will accept 75% of the rental income. They will want this vouched for either by your last tax return or by accounts certified by an account, along with evidence of monthly rental lodgements in your bank account of course!

wclarke20

After jumping through all the banks hoops, we were offered a 80% mortgage which basically means we need €50k savings deposited before we can draw down.

Being gifted the site is irrelevant, we were told. Unfortunately we dont have €50k in savings so may have to put off building the dream home for a while

muffler

wclarke20 wrote: »

We got a 100% mortgage for a self build. Hopefully we’ll only be using 2/3rd of the amount we got approved for.

wclarke20 wrote: »

After jumping through all the banks hoops, we were offered a 80% mortgage

Not sure I follow

wclarke20

I know Muffler, approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.

muffler

wclarke20 wrote: »

I know Muffler, approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.

Ah! I see.

Difficult position to find yourself in.

wclarke20

I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

Anybody else get this response from the banks?

muffler

wclarke20 wrote: »

I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

Anybody else get this response from the banks?

Thats probably standard enough. if the mortgage is in joint names then they definitely will insist on title to the property being in both names.

AFAIK, even if the mortgage is in your name only you will need to have it jointly owned because of family law or something like that.

There is nothing to stop you from registering the gift in your name only and then amend the registration to joint names thus avoiding cgt payable by your parents. But then this will cost you additional legal fees. Swings and roundabouts really.

Talk to your solicitor about the options and choose which ever one is more "cost effective"

wclarke20

The site is in my name now. As we're not married yet (next year), she would be acquiring an asset and i would have to pay CGT.

I didnt think it was standard practice to be honest. Its called joint mortgage sole title. A lot of people nearby were in similar positions and i know they didnt have to do that. EBS didnt have any issue with it but we bailed on them as they were messing us about.

I'll probably have to speak to the solicitor but i was just wondering if anybody else had any experience with this.

just do it

wclarke20 wrote: »

I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

Anybody else get this response from the banks?

Quazzie on the "the house that boards built" thread had a similar issue as this, see what someone in the legal profession replied at this link: http://www.boards.ie/vbulletin/showthread.php?t=2055461436&page=8

galwaytt

wclarke20 wrote: »

I...approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.

Ah yes, hearing this a lot. The term is 'bait & switch'. The idea being that, if you get an attractive offer at the start, you stop looking elsewhere, and so take out the competition.

I'm sitting not 5m from someone this has happened to in the last 6 weeks.

wclarke20 wrote: »

The site is in my name now. As we're not married yet (next year), she would be acquiring an asset and i would have to pay CGT. ...I'll probably have to speak to the solicitor but i was just wondering if anybody else had any experience with this.

Do consult a solicitor, but while you're doing so, ask about having 'property in common'. Just something I came across years ago, in the family.

ewanalex

Oh dear I feel sick reading through this post! After 5 years of fighting to get our planning, we finally get planning an now I'm concerned we may not get a mortgage! We've just applied recently, went with broker who was very honest an told us it could take months to get approval! This is torture!
Were both in good jobs and well paid but we do have outstanding loans so I'm really nervous now! Very interested to read other recent experiences with this.... Aaagghh

kizzyf

In my experience the sooner you hear back the less likely you are to have been successful. Banks are being very difficult at the moment particularly if you have outstanding loans, another property or are self employed. Good luck with it.

ewanalex

Thank you, it's scary at the moment, the thing is we can actually afford a mortgage but not sure the banks will see this when we have oustanding loans,
I would someones opinion on whether we should clear all our loans with our savings? Half the value of the site is I suppose gifted would this help? I feel very nervous using my savings to pay back our loans and be left with very little savings? What to do?

mmc2010

ewanalex wrote: »

Thank you, it's scary at the moment, the thing is we can actually afford a mortgage but not sure the banks will see this when we have oustanding loans,
I would someones opinion on whether we should clear all our loans with our savings? Half the value of the site is I suppose gifted would this help? I feel very nervous using my savings to pay back our loans and be left with very little savings? What to do?

Hi ewanalex, unfortunately there is no straightforward answer to this. My husband and I applied 6mths ago and were turned down on the basis that I had a large pers loan (10k). I had the option to repay out of our savings but we needed the savings to finish off the house so I didn't want to do that. So I went about repaying the loan faster by paying off €1k p.m. I have it nearly paid off now with three months to go. I called to the bank yesterday again to discuss the situation and am now in a much better position as I can also prove repayment capacity with the additional 1k when the loan is paid off. Granted it has been a tough (and very quiet!) 6mths but I think it was worth it! I would recommend this approach for the two of you but I don't know your circumstances so it may not work for you.

ewanalex

Thank you so much mmc2010, this is the sort of information I was hoping to get from people on here, to be fair were talking similar numbers, we owe 15k but were saving 1500 per month so I'm just hoping the repayment capacity will go in our favour we've 2 yes left on the loan. I spoke to broker today and she told me leave it for now and let's just see what happens. As our strong savings will look more favourable. Fingers crossed, I will let everyone know the outcome whenever that is.
Have u started to build or have u litterally just got ur mortgage?

mmc2010

Hi ewanalex, I've done neither at present. I have to wait another month before we can apply so fingers crossed then. We're hoping to start building as soon as possible after. Its exciting but scary at the same time!

db

Mortgages are getting harder to get and the bank will look very closely at your ability to repay the loan at current rate + 2-3% on top. They will take your income and outgoings on any existing loans living costs etc and will base the size of mortgage they will give you on how much you can repay each month. For example, if you have €1000 left over to pay your mortgage each month they will approve you for they size of mortgage you can repay with €1000/month if the interest rates increase.

On the other side, the bank will look for a valuation of the finished house and the maximum offer will be 90% of the finished value of the house.

We own our current house outright, have no loans of any sort, have large savings in the bank, decent salary and we were shocked at how little the bank would approve us for on a mortgage, just a little over 2 x salary. We have permission on a site and we will have to buy the site with savings and a small personal loan and then look for a mortgage to build when that loan is repaid.

ewanalex

We finally were approved our mortgage after jumping through hoops. We ended up going direct with Bank Of Ireland, even after 2 attempts with the broker!? Strange I know but it worked! We do have to have 15% deposit which equates to approx 35k. It's more do-able than the 50k they originally wanted.
We have to spend 30k of our own finances on the site.... will be an interesting year ahead!

just do it

ewanalex wrote: »

We finally were approved our mortgage after jumping through hoops. We ended up going direct with Bank Of Ireland, even after 2 attempts with the broker!? Strange I know but it worked! We do have to have 15% deposit which equates to approx 35k. It's more do-able than the 50k they originally wanted.
We have to spend 30k of our own finances on the site.... will be an interesting year ahead!

Congrats on getting mortgage approval and good luck with the build. Great time to be building.

Can I ask one question - have you other debts? Particularly any negative equity?

ewanalex

Hi,

Yes we have denbt between us, to be fair I was forced to pay off a loan I had outstanding so now I only have my credit card which is a couple of thousand and my dp has approx 9k outstanding on a loan. Other than that we have no other debt, no negative equity, I would imagine that would be a whole other situation....
It was really difficult to get it, but we fought hard! After our planning permission struggles we were not going to fall at the last hurdle.... Now the fun starts:rolleyes:

mmc2010

congrats Ewanalex, that's fantastic news! another problem sorted....we still haven't got our mortgage. We've applied via a broker, but like you, it could take months. Thankfully we've now got all of our loans paid off and our savings are still in tact so hopefully that may help. We will wait and see.....

ewanalex

Good luck to anyone trying for a mortgage at the moment, it's not easy.

If it helps it was Bank Of Ireland in the end that decided to take a chance on us. And we are based in Westmeath.

I guess we have strong earning power but our savings were severely hurt when we were forced to pay off the majority of outstanding loans, so it just meant we had to save hard and quickly to get the deposit back up (and some/lots of help from the parents)

We have the loan offer now, but i'm hearing horror stories on other threads about drawing down disasters as the build progresses! I have learnt a lot from boards.ie!

mj_mam

Good to hear people are being granted mortgages.

Been in talks with BOI, but just waiting on planning now before we start the fun of applying for the mortgage.

Would love to know what our chances are.
I am going for mortgage alone as dp is unemployed (basically, a blocklayer and very little work). My earnings amount to approx just under 39,000 gross. Really hoping to secure an amount of 140,000 (still waiting on QS to come back with approx price of build), as my dp will do all ground works and block/stone work and we've other relations/friends in various trades going to do the other work.

Even though we're not at the stage of applying yet I'm praying everyday we get approval for it, providing we get planning approval, oh lord pleeeeease!

Tom123

Hi All,

Currently looking at a site in the Dublin region with full planning permission for a 200sqm house. Rough estimate of build costs is about €250k (I'm guessing )

I currently earn €100k and my wife earns €60k. We have existing debts of about €10k but will be all repaid in 1 year.
Have savings of about €30k and will have €50k come June (guaranteed bonuses)

What percentage of site would we be able to get, what percentage of build costs and would we need to have the full deposit before they would allow us to purchase the site?

ewanalex

Hi Tom123

Looking at your figures you should have no problem getting a mortgage, best you go in and have a chat with them and get the ball rolling.

Once your jobs are secure and you have a history of some savings then I can't see a problem with your case as you sound pretty much exactly where we were.

We are building a 250MSQ and we are looking at under 200k mark down, we are negotiating every cent and plan to get this down further!

We have been asked to put 30k of our own savings towards site cost of 50k, bank will put forward 20k.

Regarding building costs, we will contribute 5k and they will put forward up to 225k so in theory we are only borrowing 215k for a 250k house + site.

We have been approved 225k though. Hope this helps.

Tom123

ewanalex wrote: »

Hi Tom123

Looking at your figures you should have no problem getting a mortgage, best you go in and have a chat with them and get the ball rolling.

Once your jobs are secure and you have a history of some savings then I can't see a problem with your case as you sound pretty much exactly where we were.

We are building a 250MSQ and we are looking at under 200k mark down, we are negotiating every cent and plan to get this down further!

We have been asked to put 30k of our own savings towards site cost of 50k, bank will put forward 20k.

Regarding building costs, we will contribute 5k and they will put forward up to 225k so in theory we are only borrowing 215k for a 250k house + site.

We have been approved 225k though. Hope this helps.

Thanks, the problem for us is the site cost could be €250k. If they ask us for 60% of that we might have to save until we are 50!

ewanalex

Tom123 wrote: »

Thanks, the problem for us is the site cost could be €250k. If they ask us for 60% of that we might have to save until we are 50!

I see where your difficulties lie...

I'm afraid my answer is unhelpful as you will be trying to get a mortgage much higher than we were, however your figures are positive and savings strong so with a little bit of a fight with the banks i think you should be OK, but i would definately set up a meeting ASAP to discuss it with them, as it is a lot easier to work along side the banks than fight against them. Prove that you are willing to do whatever it takes to get this mortgage and develop a relationship with your bank.

Good luck, hopefully someone else on here has something more constructive to offer in terms of advise.

sydthebeat

250K for any site in todays economy is really hard to justify

hard to see any financial institution agreeing with that valuation.

mmc2010

ewanalex wrote: »

Hi Tom123

Looking at your figures you should have no problem getting a mortgage, best you go in and have a chat with them and get the ball rolling.

Once your jobs are secure and you have a history of some savings then I can't see a problem with your case as you sound pretty much exactly where we were.

We are building a 250MSQ and we are looking at under 200k mark down, we are negotiating every cent and plan to get this down further!

We have been asked to put 30k of our own savings towards site cost of 50k, bank will put forward 20k.

Regarding building costs, we will contribute 5k and they will put forward up to 225k so in theory we are only borrowing 215k for a 250k house + site.

We have been approved 225k though. Hope this helps.

Hi ewanalex, that's impressive costings! well done! are you planning on going direct labour or contract? we are coming out at around 190k for a builders finish on a 236sqm house. Are you including finishing it ie, kitchen, tiling etc in the 200k?

ewanalex

mmc2010 wrote: »

Hi ewanalex, that's impressive costings! well done! are you planning on going direct labour or contract? we are coming out at around 190k for a builders finish on a 236sqm house. Are you including finishing it ie, kitchen, tiling etc in the 200k?

I'm afraid to respond to your query in case i get into trouble with the Mod's as this thread is about getting a mortgage...

I have posted in another thread about my costsing before (hopefully the correct one);)

mmc2010

ewanalex wrote: »

I'm afraid to respond to your query in case i get into trouble with the Mod's as this thread is about getting a mortgage...

I have posted in another thread about my costsing before (hopefully the correct one);)

Ha! I hear you ewanalex! just wondering....what type of documentation did BOI request - outside of the usual p60, bank statements etc? did you have to present your planning permission, builders quotation etc?

Troy McClure

mmc2010 wrote: »

Ha! I hear you ewanalex! just wondering....what type of documentation did BOI request - outside of the usual p60, bank statements etc? did you have to present your planning permission, builders quotation etc?

We have done 2 drawdowns on a build mortgage. As far as application goes the only thing I can think of the didn't ask for was for great grand parents second driving licence. The are OTT now on the due diligence.
Worst thing is they keep losing things. One document we had to furnish 3 times! even after first drawdown was done. The girl at the mortgage section at our branch was absolutely livid with how their mortgage dept in Dublin are carrying on.
I dont know how anyone is geting a self build mortgage for direct labour. We had to have very complete costings from the builder done and I could not see them accepting anything from anyone else.
Allow time to deal with them, for as sure as you think you have given all thats required, even if they have said yes thats fine! they will turn around again and find something wrong with it. Fact is they are trying not to give out money.
Good Luck, be patient and allow plenty of time.

sas

Troy McClure wrote: »

We have done 2 drawdowns on a build mortgage. As far as application goes the only thing I can think of the didn't ask for was for great grand parents second driving licence. The are OTT now on the due diligence.
Worst thing is they keep losing things. One document we had to furnish 3 times! even after first drawdown was done. The girl at the mortgage section at our branch was absolutely livid with how their mortgage dept in Dublin are carrying on.
I dont know how anyone is geting a self build mortgage for direct labour. We had to have very complete costings from the builder done and I could not see them accepting anything from anyone else.
Allow time to deal with them, for as sure as you think you have given all thats required, even if they have said yes thats fine! they will turn around again and find something wrong with it. Fact is they are trying not to give out money.
Good Luck, be patient and allow plenty of time.

We're direct labour. We're attempting to draw down the last main stage i.e. we're leaving the final 5k for retention based on completed valuation. We're fully aware we'll never see that part.

The mortgage company keep requesting further info. We heard on friday that there was a further request for info. coming but we don't know yet what they want. My wife worked in a mortgage brokerage for most of the boom and dealt alot with this specific lender. She has no idea what if anything more we can give them.

Very nerve wracking. We've spent it. We're nothing left. We need about another 80k to get us in. Our site insurance expires at the end of March and there is no extending it. We managed with much begging to get them to extend once already. There is no hope this time. This hopefully will help focus the mortgage companys mind, "their" asset will be uninsured 7 weeks from now.

BryanF

best of luck with it sas, I'd be interested to see does the insurance issue rattle them..

ewanalex

mmc2010 wrote: »

Ha! I hear you ewanalex! just wondering....what type of documentation did BOI request - outside of the usual p60, bank statements etc? did you have to present your planning permission, builders quotation etc?

Hi,

We were requested to present 6 months of the usual bank statements, savings statements and salary certs etc.

Then we also had to provide a full and detailed builders quotation and yes we had to show we had the planning permission too. The first builders quotation we gave was far too conservative for them and they more or less told us it had to be higher!? They didnt agree with the builders quote and then we had to go back to our buidler to get a more detailed quote, our builder wasnt too keen on providing this especially since we havent fully decided on our builder yet, or even if we are going direct etc. Weve learnt so much in all this time planning that we think it is possible for us to give the direct labour route a shot... but this remains to be seen. The important thing is we presented what was needed to gain the mortgage....at last! :rolleyes:

liamolaighin

clarelady wrote: »

Hey We are in planning stages and wanted to start having a look at mortgages and if we would get one, with the current climate and all. Would love to hear people who have got them recently and if so what % are banks giving ie 100% of build cost or another %.We have site for free (family ) so only need build cost , so on a total basis what % would we get based on peoples recent information. We unfort have another house in Dublin that we wont be able to sell - so will rent out this which should more or less meet mtg payments but this prob will be a negative for us, so would be interested to hear of anyone in similar situation. thanks

Financial solutions in Douglas in cork did for me what no bank manager could. So
Show they managed to get me approved with my partner. Also own house in cork but they took all our details and made a case for us. They will be very honest with you regarding your suitability to banks. Have all your documentation in order upfront and the fee they charge may be reduced. Well worth every penny to us though.

mmc2010

Folks, going slowly insane here.....am applying for self build mortgage at present. Is it justified that bank would request engineers report at initial application. For AIB, this is very elaborate and I cannot see how the engineer would complete it without full disclosure of the builder. While we have received a quote from the builder we have exactly told him he's got the job and we're hoping to do some further negotiation! how have you got around this?