Wishing and hoping, dream property!

Pinkycharm

So i bought a property two years ago and finally think i am ready move on, I did up a derelict house and hoping to buy another 5 bedroom one down the road thats come up for sale. Am I mad??

Should I try keep this one, it's mortgage free, and see if I could get a mortgage for the next one? Both my partner and I have been approved before but the sale on the property we wanted before fell through. The seller with this property is an old neighbour of mine, that wants to sell to someone local that he knows if at all possible.

I want to take the leap....thinking it could be a forever home AND the new property itself has a lot of sentimental value for us. Before the current owner, the house belonged to our best friend (10 years ago) who tragically passed away nearly two years ago. I think it would be a lovely sentiment for us to have it.

Question is would the banks think it favourable that we have a property already without a mortgage, as in would that look good? No loans etc with us either and to be honest, we'd probably be able to afford it without a mortgage but would need to do a serious revamp on it.

Eldarion

Pinkycharm wrote: »

Question is would the banks think it favourable that we have a property already without a mortgage, as in would that look good? No loans etc with us either and to be honest, we'd probably be able to afford it without a mortgage but would need to do a serious revamp on it.

Of course it would look favourable. What would look even more favourable though would be a fat, liquid number in your accounts. I hope you're bringing your tax liability (33% Capital Gains) into your calculations as taking your story at face value it sounds like you most definitely won't be exempt.

I'd recommend engaging the services of a professional as the amounts you're dealing in now would be quite significant.

ted1

OP why do you want to move? What size is your existing house?

Would it be cheaper to extend your current home?if I had a choice to big mortgage free I'd jump at it

Trish56

I don't understand why capital gains would come into it if it is your family home and you decide to sell it now there would be no capital gains tax. If you propose to retain the property and rent it out, there would be capital gains calculated only from time rented out.

You should have no problem getting a mortgage once you can prove affordability and repayment capacity such as providing evidence of regular monthly savings over the past 6 months equal to stressed repayments. You can also include part of the rental income in your calculations.

Eldarion wrote: »

Of course it would look favourable. What would look even more favourable though would be a fat, liquid number in your accounts. I hope you're bringing your tax liability (33% Capital Gains) into your calculations as taking your story at face value it sounds like you most definitely won't be exempt.

I'd recommend engaging the services of a professional as the amounts you're dealing in now would be quite significant.

Pinkycharm

ted1 wrote: »

OP why do you want to move? What size is your existing house?

Would it be cheaper to extend your current home?if I had a choice to big mortgage free I'd jump at it

The house we have now we bought for 30k, it was a derelict house that we had done up over time. end of terrace three bedroom but more like a two bed because box room is pretty small, there isn't a front garden and barely a back garden. The house we'd me moving to is a 5 bedroom with a front and back garden but is also derelict and has not been lived in for 9 years.

I contacted the owner yesterday and she'd be willing to let it go for 60k in the state it's in so to be honest we'd be looking for about 30k of a mortgage because we have 40-45k we could throw at it straight up. She might even sell it to us at that. We've builders etc in the family who helped do this one up at a very low cost and they said that they would be on board to go for it again.

The house we have has about an 12 ft square back garden and there is already a shed and an oil tank in it

Our best friend passed away suddenly two years ago and its the house he grew up in so I think it has more value to us in that way as he said if he had ever had the money he would have bought it.

Bank refused us a mortgage for this house because neither of us were permanent but we had 70k in saving between us so we bought this because we were in a rush to get something as I was due a baby. This was valued at 105k (in Tipperary) but has an A2 BER from all our work so we did put a lot into it. Since then both of us have been made permanent so I guess that is going for us now.

This was never going to be our forever home I guess, but we always knew that and to be honest the thoughts of jack hammering floors and pulling walls down again makes me cringe but I could see myself living there for the forseeable future anyways.

Pinkycharm

Eldarion wrote: »

Of course it would look favourable. What would look even more favourable though would be a fat, liquid number in your accounts. I hope you're bringing your tax liability (33% Capital Gains) into your calculations as taking your story at face value it sounds like you most definitely won't be exempt.

I'd recommend engaging the services of a professional as the amounts you're dealing in now would be quite significant.

Thanks for your reply!! But isnt that tax only if you rent?? I wouldnt mind it all the same even if I got to hold onto the property just to have it as a gift for my son when he's older as a start for him.

Pinkycharm

Trish56 wrote: »

I don't understand why capital gains would come into it if it is your family home and you decide to sell it now there would be no capital gains tax. If you propose to retain the property and rent it out, there would be capital gains calculated only from time rented out.

You should have no problem getting a mortgage once you can prove affordability and repayment capacity such as providing evidence of regular monthly savings over the past 6 months equal to stressed repayments. You can also include part of the rental income in your calculations.

That was what I would hope to do, I'd love to be able to keep this house and give it over to my son in later life to give him a start out and until then use the rent towards a mortgage payment. I wouldn't really mind the capital gains tax or holding onto the property anyway because of that. I was also thinking of letting my eldest brother relocate here and use it while he saved for his own mortgage and just pay for the upkeep of the place rather than rent it to me. We would definitely manage without a mortgage but would be nice to have the cushion of one should anything go wrong once we see inside the other property and the possible amount of work that we would need to do.

amdublin

You are talking a really small mortgage here.

Are you still not permanent? What are your salaries like?

You might be better posting this in banking and finance.