Buying House we are renting

Annabananna

My Landlord came over last night to collect a letter that came to the house . He has an agreement with his bank that instead of 1400e they accept our rent of 750e towards the mortgage. They rang him yesterday asking if his renters us would be interested in buying the house. The house when he bought it 5years ago for 400k is now valued at 220k but he will settle for 200k including all the contents as he then would be left we 75k left to pay off from mortgage which he says he has from his fathers estate.

My questions are:
1. Has anyone heard of banks doing this before?
2. We have full planning permission for a similiar house on my parents land should i transer the site into my name as we were planning too or would it any value to the mortgage application if we had this in my name. I am a qualified accountant but at the moment i mind our kids at home so have no income but am planning on returning to workplace in 18mths when kids go to school.
3. My husband earns 70k with a 8k bonus plus he does accounts on the side which i actually do but the tax return is in his name and thsi bring in 8k so would we get a mortgage for 180k as i assume we at least need 20k as a deposit.

Thanks in advance

chris85

Basically your landlord is in trouble with his bank and they want him to sell by the looks of it.

You must ask yourself is the house worth €200k? and do you want to buy this house?

Take it out of the equation that you currently live there and the personal relationship with the landlord and ask yourself would you buy this particular property if you were just another buyer.

In terms of income, bonuses your husband makes will not be included but basic pay is what it works on. So base pay of €70k i would look at which is a decent salary of course and a rule of thumb now a days is about 4 times annual salary so this would allow you about 280k mortgage, obviously this is a bit of a simple macro look at it.

roro2

You must ask yourself is the house worth €200k? and do you want to buy this house?

Take it out of the equation that you currently live there and the personal relationship with the landlord and ask yourself would you buy this particular property if you were just another buyer.

The above sounds key to your situation. Regarding the site, I don't think it would make a lot of difference to a mortgage application, and the bank would advise you if it would anyway.

Annabananna

Thanks for the replies Op here yes it is a house that we would buy as it just down from the national school where our children will be going where the site is 7miles away. It is near the N9 so in freak snow we my husband would be able to get to work much easier then the site.

In relation to the price it is a 2400sq house with four bedrooms huge kitchen and nice area downstairs in addition to that the house is 20years old but when it was bought by our landlord it was updated re heating and electrics as well as decor. We had spoken to an auctioneer when we were moving in 6mths ago and they told us it be valued around 230 to 240k. That makes us believe it is a good price.

roro2

Prices are still lower than 6 months ago, so it's probably a fair price rather than a good price, especially if he doesn't have to try to look for a buyer. But as long as you are happy, then no reason not to go ahead. The bank will need a valuation confirming the agreed price, and a deposit of about 8-10%. I wouldn't have thought there'd be a problem getting a mortgage, but you can't be guaranteed at the moment.