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PTSB Top up mortgage. Other options?

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  • 25-01-2012 10:54am
    #1
    paddyjj
    Closed Accounts Posts: 11 ✭


    I am planning on building a new extension to the front of my house. I have applied for a top up mortgage loan of €40K. The house is currently valued by the bank at €140K. I currently owe €117K on it.

    What are the chances of getting approved for this by other banks? PTSB at the moment are pulling their faces a little. I thought that as long as I wasn't in negative equity then I'd by fine.

    I have had the mortgage for 7 years, never missed a payment and easily passed the re-payment capacity checks that they do.


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    #2
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    paddyjj wrote: »
    I am planning on building a new extension to the front of my house. I have applied for a top up mortgage loan of €40K. The house is currently valued by the bank at €140K. I currently owe €117K on it.

    What are the chances of getting approved for this by other banks? PTSB at the moment are pulling their faces a little. I thought that as long as I wasn't in negative equity then I'd by fine.

    I have had the mortgage for 7 years, never missed a payment and easily passed the re-payment capacity checks that they do.

    With the top up on what you owe it would only leave €3k equity there so thats not a lot. This doesnt take into account a new valuation of the house when extension built. When was your latest valuation done as house prices falling by the week.

    The lack of a lot of equity will make it a difficult decision for the bank. At present they have a decent amount of equity to reduce their risk. If they give the topup this will change and more money owed.

    So it aint just really if you can afford it but also the risk of the increased balance and equity.


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    #3
    paddyjj
    Closed Accounts Posts: 11 ✭paddyjj


    chris85 wrote: »
    With the top up on what you owe it would only leave €3k equity there so thats not a lot.

    Thanks Chris85, but I'm not sure I follow. Current value is €140K I owe €117 so equity is €140K -€117K = €23K. Or am I missing something?


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    #4
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    paddyjj wrote: »
    Thanks Chris85, but I'm not sure I follow. Current value is €140K I owe €117 so equity is €140K -€117K = €23K. Or am I missing something?

    Sorry i read that wrong. I thought the post said €160k value on the house. My head is bit melted with study so dont mind my brain slip.

    Ok even worse. No way will they give a top up as it will push loan to a greater value than the house is worth. By agreeing to it they are pushing you into negative equity.


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    #5
    paddyjj
    Closed Accounts Posts: 11 ✭paddyjj


    But that doesn't take into account what the value of the house would be after I build the extension. Surely the house value will increase after the extension? Will it not be worth more that the €140K its valued at now.


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    #6
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    paddyjj wrote: »
    But that doesn't take into account what the value of the house would be after I build the extension. Surely the house value will increase after the extension? Will it not be worth more that the €140K its valued at now.

    I mentioned that in my first post. However extensions and the like are not adding value to properties like they did before. You would need to get a rough valuation based on the plans I would imagine the bank will want to see this to see where the end point will be on the house value.


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