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Self build mortgage?
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24-02-2012 06:21PM#1
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Hi there, find your answers very informative so hope you don't mind if I throw one in...Have been gifted a site, purchased for 100k by my parents, planning permission received. Have a salary of 31k, with about 2k overtime guaranteed per annum, no kids, no loans or cc, save €800pm and have approx 11k savings. Looking for 100% construction costs mortgage as site is in place, first of all is this ok or have things changed? So far, I applied to my own bank UB which have called me to say its approved but are looking for a letter to state that my parents have paid the architect fees and solicitor fees etc which they have, is this ok to give, will it ever come back on my parents? They are offering 155k fir the build, my fiancé and family are building the house so very little labour costs, by he way I applied as a single applicant for mortgage. I was hoping to go with AIB for a mortgage as they're rates seem far less that other banks, at first they said they would give me €170k (monthly repayments were nearly the same with the rate difference) but called them today and said it had been refused. I'm now worried that it will go on file that I have been refused by AIB and it will affect my chances with proceeding?? Can I now re- apply to AIB for the lower amount of 155k or how do I go about this?? Also, my solicitor told me today that as part of getting the mortgage that the applicant now has to pay the banks solicitors fees, is this true??? Apparently it was only recently brought it, I nearly died..!! So sorry for such a long rant, would just love some advice as to hwhat o do next, whether to just accept the higher rate mortgage with UB as don't want to push my luck!!! Thanks a mill
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Hi there, find your answers very informative so hope you don't mind if I throw one in...Have been gifted a site, purchased for 100k by my parents, planning permission received. Have a salary of 31k, with about 2k overtime guaranteed per annum, no kids, no loans or cc, save €800pm and have approx 11k savings. Looking for 100% construction costs mortgage as site is in place, first of all is this ok or have things changed? So far, I applied to my own bank UB which have called me to say its approved but are looking for a letter to state that my parents have paid the architect fees and solicitor fees etc which they have, is this ok to give, will it ever come back on my parents? They are offering 155k fir the build, my fiancé and family are building the house so very little labour costs, by he way I applied as a single applicant for mortgage. I was hoping to go with AIB for a mortgage as they're rates seem far less that other banks, at first they said they would give me €170k (monthly repayments were nearly the same with the rate difference) but called them today and said it had been refused. I'm now worried that it will go on file that I have been refused by AIB and it will affect my chances with proceeding?? Can I now re- apply to AIB for the lower amount of 155k or how do I go about this?? Also, my solicitor told me today that as part of getting the mortgage that the applicant now has to pay the banks solicitors fees, is this true??? Apparently it was only recently brought it, I nearly died..!! So sorry for such a long rant, would just love some advice as to hwhat o do next, whether to just accept the higher rate mortgage with UB as don't want to push my luck!!! Thanks a mill
Hi Duffers11,
Wow you managed to squeeze a lot of questions in there!! I'll try to answer them in the order you have them above (in bold).
1. Ok to fund 100% of the construction costs when you have a site worth €100k as equity towards the build. If your borrowing €155k and your value on completion is €255k your loan to value is only 60% and well within Bank's policies.
2. The fact that you applied to AIB and have been declined will have no bearing on your ability to proceed with UB. Have you been given the reasons that you were declined? Are you building using direct labour or by way of fixed price contract with your fiance's family? Did AIB know which route you were going down before decision changed? Bank's view direct labour as a more riskier type of lending and would like to see you have further savings than €11k to cover any cost overruns.
3. Re-applying with AIB and whether it's worth your while doing so will purely depend on the reasons that you were declined? (If you can let me know what they said I can tell you whether it's worth your while and how you should go about it)
4. The Bank do not employ a separate solicitor to deal with a self build or a standard house purchase and your solicitor is allowed to do all the legal work involved with the transaction. I would be wary of this being an attempt by your solicitor to bump up the fees they are charging you.
If you can answer the questions above in relation to the response from AIB I might be able to throw some more light on this for you....0 -
Hi there, find your answers very informative so hope you don't mind if I throw one in...Have been gifted a site, purchased for 100k by my parents, planning permission received. Have a salary of 31k, with about 2k overtime guaranteed per annum, no kids, no loans or cc, save €800pm and have approx 11k savings. Looking for 100% construction costs mortgage as site is in place, first of all is this ok or have things changed? So far, I applied to my own bank UB which have called me to say its approved but are looking for a letter to state that my parents have paid the architect fees and solicitor fees etc which they have, is this ok to give, will it ever come back on my parents? They are offering 155k fir the build, my fiancé and family are building the house so very little labour costs, by he way I applied as a single applicant for mortgage. I was hoping to go with AIB for a mortgage as they're rates seem far less that other banks, at first they said they would give me €170k (monthly repayments were nearly the same with the rate difference) but called them today and said it had been refused. I'm now worried that it will go on file that I have been refused by AIB and it will affect my chances with proceeding?? Can I now re- apply to AIB for the lower amount of 155k or how do I go about this?? Also, my solicitor told me today that as part of getting the mortgage that the applicant now has to pay the banks solicitors fees, is this true??? Apparently it was only recently brought it, I nearly died..!! So sorry for such a long rant, would just love some advice as to hwhat o do next, whether to just accept the higher rate mortgage with UB as don't want to push my luck!!! Thanks a mill
Hi Duffers11,
Wow you managed to squeeze a lot of questions in there!! I'll try to answer them in the order you have them above (in bold).
1. Ok to fund 100% of the construction costs when you have a site worth €100k as equity towards the build. If your borrowing €155k and your value on completion is €255k your loan to value is only 60% and well within Bank's policies.
2. The fact that you applied to AIB and have been declined will have no bearing on your ability to proceed with UB. Have you been given the reasons that you were declined? Are you building using direct labour or by way of fixed price contract with your fiance's family? Did AIB know which route you were going down before decision changed? Bank's view direct labour as a more riskier type of lending and would like to see you have further savings than €11k to cover any cost overruns.
3. Re-applying with AIB and whether it's worth your while doing so will purely depend on the reasons that you were declined? (If you can let me know what they said I can tell you whether it's worth your while and how you should go about it)
4. The Bank do not employ a separate solicitor to deal with a self build or a standard house purchase and your solicitor is allowed to do all the legal work involved with the transaction. I would be wary of this being an attempt by your solicitor to bump up the fees they are charging you.
If you can answer the questions above in relation to the response from AIB I might be able to throw some more light on this for you....
Thanks so much for your quick reply. So I should have no problem getting 100%, we reckon at a guess, house will be worth approx 450-500k upon completion.
No wasn't given any reasons, just a quick mention of repayment capacity but I would be well able to cover even at stressed rate, I am wondering however, with it being 170k this might be a push. They r a nightmare 2 deal with, so rude, I won't even begin to tell u what they done, at the start they sent me out somebody else's mortgage details, name, address, salary, job, mortgage looked for, what they sold their house for, everything and because I had the courtesy to let them and man know, to be refused feel a little hard done by. Building direct labour, fiancé is a builder out of work and can do a hell of alot on his own, thankfully! Architect added 15% contingency in the costings to cover over runs, so this was included in mortgage sought and have my savings aswell.It's just crazy at the mo with the rates available, AIB seem to have the best rate options across the board! Going to try and ring them 2mo and get a few more answers from them. Was thinking that with solicitor, sounded very strange that not only do I cover his fees but also the banks solicitor fees???0 -
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Hi, thanks again for reply. I had a car loan in previous years which was €265.00 pm and I also saved at that time aswell, cleared the loan with no arrears etc so dont knwo if this would help, they would be able to see that from my ICB check. I am currently living in a house rent free until I had got mortgage, so my current account would show payments for electricty, gas etc, again I dont know if this would show that I can pay as a 'homeowner'. Would you have any advice as to what I should say when I contact AIB later today? No I just said that build was direct labour and put that I was single applicant, didnt go into detail as to whom would build it. 0
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Hi, thanks again for reply. I had a car loan in previous years which was €265.00 pm and I also saved at that time aswell, cleared the loan with no arrears etc so dont knwo if this would help, they would be able to see that from my ICB check. I am currently living in a house rent free until I had got mortgage, so my current account would show payments for electricty, gas etc, again I dont know if this would show that I can pay as a 'homeowner'. Would you have any advice as to what I should say when I contact AIB later today? No I just said that build was direct labour and put that I was single applicant, didnt go into detail as to whom would build it.
Ok, just tell them that you were saving €800pm and repaying €265pm car loan at the same time. This gives you a repayment capacity for €1065pm. Also mention that although you were living rent free you were covering bills such as food & utility costs so are accustomed to the expenses associated with running a household. Just say that you have recalculated your figures and a loan amount of €155k would be sufficient. Not much else you can tell them really... figures just about work on a loan amount of €155k, you have a repayment capacity evident so it'll really boil down to the Underwriter on the day making a decision. Hard for me to give you a definitive answer as I haven't seen any of the paperwork... best of luck and if you need anything else let me know!0 -
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Hi Killers1, I wonder would you mind giving me a bit of advice.
Me and my patner are both 22 yrs of age and are looking into gettting a self build mortgage.
We are hoping to purchase land from a friend of my partners father at a low rate (approx 15-20k).
Jointly we earn approx 43k per annum. We both live at home so pay no rent. We have savings of €5000 so far (saving €500 monthly) and my partner was made redunandat but went straight into full time employment with a different company, so we also have some of his rundandancy to put towards savings.
I have a loan with credit union of 2k and his loan is 4k.
We reckon we will need approx €180,000.
Do you think we have a good chance of been approved?
A close friend of ours will be doing the building and we also have a friend who is a carpenter and an electrician.
I am also wondering about stage payments. Would we be able to use money from the mortgage to complete the inside of the house, ie fixtures & fittings and furniture? We have included these in the amount we reckon we will need.
Any information you could supply me with would be greatly appreciated.
Thanks A Mil
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