Here's our situation, any advice would be appreciated.

podge018

Im a civil servant earning 40k. Bought an 'affordable house' from the council 7 years ago. Valued at 315k (yeah right), bought for 155k, still 126k outstanding on that, which coincidentally is approximately what it's worth. Mortgage repayments are 600 per month at the moment.

Partner is a permanent teacher earning 40k. No loans.

Combined savings of approx 10k. Gift from parents of 30k.

To let the apartment, rental in the area should me get 850 per month. We've been told banks don't take rental income into account, which is a kick in the teeth.

We want to buy a house now, get married and start a family.

We've spoke with a financial advisor and what he says a bank would be willing to give us would not be enough to buy anything near what we'd be after (which is modest enough) and we'd be better off staying in the apartment to be honest.

Has anybody any experience in trading up and what did you do with the apartment. Is there any way of showing the banks a long-term letting arrangement and persuading them it's secure? Anything else you think we could look into.

We'd like to buy before the end of the year to avail of the interest relief. I know our savings aren't much, we haven't really been thinking of saving or anything like that, only we got engaged earlier in the year and have started to get our serious heads on now.

Thanks for reading any advice would be great.

Zamboni

Is renting a house out of the question?

podge018

well we don't have a need for a house at the moment, it's only the 2 of us for now and who knows how long nature takes to work it's magic. Also there's the fact of the mortgage interest relief and being told left and right that now is the time to buy that's lighting a bit of a fire under our arses.

NIMAN

podge018 wrote: »

well we don't have a need for a house at the moment, it's only the 2 of us for now and who knows how long nature takes to work it's magic. Also there's the fact of the mortgage interest relief and being told left and right that now is the time to buy that's lighting a bit of a fire under our arses.

I'd take all that with a massive pinch of salt.

You'll be able to pick up bargains for years to come in this country.

Don't panic. I could provide you with a dozen links now to articles on various media sites about how house prices are continuing to fall.

McTigs

who is telling you left right and centre that now is the time to buy and why do you believe them?

Prices have not bottomed out yet, for a miriade of reasons that have been explined a enght on various threads in this forum and when the eventually do, they will stay bottomed out for least a few years. if the apt you're living in is enough for now then step back and continue saving. Every penny put aside is a penny less to borrow and two pennies less to pay back.

psycho-hope

podge018 wrote: »

Im a civil servant earning 40k. Bought an 'affordable house' from the council 7 years ago. Valued at 315k (yeah right), bought for 155k, still 126k outstanding on that, which coincidentally is approximately what it's worth. Mortgage repayments are 600 per month at the moment.

Partner is a permanent teacher earning 40k. No loans.

Combined savings of approx 10k. Gift from parents of 30k.

To let the apartment, rental in the area should me get 850 per month. We've been told banks don't take rental income into account, which is a kick in the teeth.

We want to buy a house now, get married and start a family.

We've spoke with a financial advisor and what he says a bank would be willing to give us would not be enough to buy anything near what we'd be after (which is modest enough) and we'd be better off staying in the apartment to be honest.

Has anybody any experience in trading up and what did you do with the apartment. Is there any way of showing the banks a long-term letting arrangement and persuading them it's secure? Anything else you think we could look into.

We'd like to buy before the end of the year to avail of the interest relief. I know our savings aren't much, we haven't really been thinking of saving or anything like that, only we got engaged earlier in the year and have started to get our serious heads on now.

Thanks for reading any advice would be great.

Not sure where you are based but have a good look at your contract from when you bought the house, I know Wicklow county council put a clause in their contracts that if the house was sold within 10 years, you had to pay the council a certain amount of the original value

hellyeah

hi
why dont you sell for 126k (which is what its worth and clear your mortgage) and apply
for new mortgage. imo you would not be liable for any clawback on sale as you are not selling property for a profit. Talk to council to clarify (if you have not allready)
Im in an affordable unit to in wickow, bought 4 years ago so im fairly up to date about
the clawback situation. You need to get permission from council to sell (ie agreed value of said property with them plus estate agent.) If they agree its worth 126k in current market your laughing as you can sell on open market and clear mortgage.
hope this helps.

the groutch

best bet is to hold out for another year, save like mad, and you should be able to get your own savings up to 30k to match the gift.

then with 80k income, 60k deposit, solid savings history, you should have no problem getting a mortgage

and any lost mortgage interest relief will be offset by further drops in property prices

(whether you rent out or sell the apartment I don't know, I'm not too familiar with affordable housing system)

Zamboni

podge018 wrote: »

well we don't have a need for a house at the moment, it's only the 2 of us for now and who knows how long nature takes to work it's magic. Also there's the fact of the mortgage interest relief and being told left and right that now is the time to buy that's lighting a bit of a fire under our arses.

As I've said to friends before - if you're buying because of mortgage interest relief, you're doing it wrong

Mr. Loverman

podge018 wrote: »

We want to buy a house now

Zamboni wrote: »

Is renting a house out of the question?

podge018 wrote: »

well we don't have a need for a house at the moment

I'm confused.

Are you only trying to buy now because you think "now is the time to buy"?

If so, ask yourself why is now the time to buy.

Seriously, create two columns on a piece of paper, one titled "positive" and the other "negative", and write down the economic and social reasons why now is or is not the time to buy.

Within about 30 seconds you will see it very clearly is not the time to buy.

Please stop believing the media. The media does not have your interests at heart.

Theboinkmaster

podge018 wrote: »

Also there's the fact of the mortgage interest relief and being told left and right that now is the time to buy that's lighting a bit of a fire under our arses.

My god have you not learned anything :eek: :eek: :eek:

Anyone telling you that is simply an idiot and you believing them would make you even more of an idiot.

Wait and save save save, do loads more research on this forum and you'll see prices will decline alot further.

gerire

podge018 wrote: »

Also there's the fact of the mortgage interest relief and being told left and right that now is the time to buy that's lighting a bit of a fire under our arses.

So mortgage interest relief may be about 200 pm, I'd say it won't be that high if its only a modest mortgage you are looking at, that's 2400 a year and 16800 over the 7 years of the interest relief.

After this few months of panic buying to get the relief ends, bidding wars cease, property starts to fall again. With the fall of prices and good negotiating you could save multiples of the interest relief lifetime ammount in 1 moment

If you need the ir to make the mortgage affordable you should question if you can afford it.

Have you actually gone to banks? Every one we have been to so far definitely takes in potential future rental income into consideration.

mari2222

Aim to stay where you are for 3 more years, until you are clear of the 10-year clawback issue (if that is true).

Aim to save hard over the 3 years, and buy a house at the end for cash - no mortgage at all. Perhaps investigate living opportunities in "cheaper" parts of the country.

Unfortunately, saving hard means making saving a top priority, over and above anything you dont need to live/work. It will not be easy, but think long-term. Actually, if you hope to have children, better get used to it!

ballooba

You don't really seem to have a good reason to be trading up right now. You're in a good position with the property having lost reasonably little value in the property crash relative to what you paid for it and how much property on average has collapsed. You should be able to save plenty of money on a combined salary of 80k with a mortgage of 600 a month. Concentrate on saving for the wedding and/or a deposit.