Mortgage for building a house where you don't currently live

tobdom

Hi folks,

I would appreciate any advice anyone may have on this - perhaps anyone who's very au fait with Mortgages or anyone who found themselves in a similar situation.

We're a married couple, early 30s, currently living (renting) and working in Dublin. We're both in good permanent jobs and work in sectors which I believe would have us considered as highly employable (IT & Nursing/Oncology specialist - both working for 10+ years) and should be able to get work wherever we go without too much bother.

We're beginning the process of submitting for planning permission to build a family home in Co. Galway on a site we have on my wife's family land (farmers), and have obviously been looking into getting a mortgage. We spoke to a broker who did mention something along the lines of calling it a 'holiday home' (it's not going to be, we're going to move & live there once its built) for the purposes of our particular situation, but we wouldn't be keen on that given something as 'big & serious' as getting a mortgage and the fact that it wouldn't be true.

My wife spoke to someone in AIB today and was told that we likely wouldn't get a mortgage because we'd need to have 'a letter' of proof to say that we are going to have work when we move West. Our plan is to get the house built and then arrange work when (a bit before) it would be time to move. But it sounds like this might not be a runner based on my wife's brief experience with the lady in AIB.

Would anyone have any advice or similar experiences to speak of?

Thanks in advance!

bee06

Would ye not move and rent there and then build the house? Building is incredibly stressful when you live near the site never mind when you live across the country.

SBarrett

You have to remember, the lending process has changed a huge amount in the last number of years. The underwriters will always look at the worst case scenario, like you cannot get work when you move. So they will look at stress testing you on paying rent in Dublin and paying a mortgage in Galway.

And as bee06 said, self builds involves a hell of a lot of work and you need to keep an eye on the work to make sure it is being done correctly. Trying to manage it from Dublin will be incredibly difficult.


Steven

tobdom

Thanks for the replies. Of course we've considered the fact that we'd be on the other side of the country while the build is progressing, but we've planned for that by planning to have a project manager (a friend who we know & trust) for the job to oversee things - as well as weekend visits as often as possible.

We may have to consider moving to work & rent in Galway if the banks won't play ball and that becomes our only option, but we had hoped not to have to. We have also considered that we'll have to be paying rent & a mortgage (staged payments for self-build) until we move into the new house, but that fact won't change if we're living in Galway unfortunately.

Stress testing us wouldn't change the fact that when we'd move we'd still need to find work?

Anyone out there who faced the same situation, and if so how did you go about it in the end?

tobdom

Anyone else perhaps have any input on this? Thanks!

okiss

I would advise you to talk to Galway county council about building a home on a site given to you by your wife's family.
Galway county council have got very strict on building once off houses and they may not allow you to do this.

At the moment it is far harder to get a mortgage or get a mortgage for a self build. The reality is that you won't get a mortgage for a self build in Galway if you both living & working in Dublin. This would be due to the fact
a) Income would not cover rent in Dublin & mortgage in Galway
b) You don't have a job/jobs in Galway
c) Even with your qualifications in nursing/It you may not get work in Galway for a period of time.

I have a friend with a number of years IT experience, a degree and a masters and they were looking in Galway for a while before getting work.

If you want to live in Galway you need to both look for work there.
You need to get long contracts or permanent positions before looking for a mortgage. I would advise you to save as much money as possible each month, don't go overdrawn and have no internet gambling. Get any loans you have paid off and don't borrow any money before applying for a mortgage. Also get a copy of both ICB reports and make sure all the information is correct on them. It a bank/credit union has made a mistake on this get them to put a note on the icb report to say ie this loan has been paid off ect.

Cushie Butterfield

Please don't take the following as being rude, harsh, condescending or over-critical as it's not intended to be.

You both have good qualifications & excellent earning potential provided you both remain in good health, & going by what you say if you applied for a mortgage in the morning you wouldn't have a problem being approved once you satisfy the lending criteria. But like a lot of other things theory & practice are two different scenarios. What may seem logical & unproblematic to you may not be viewed similarly by a lender. This should be obvious from the results of your research with AIB & the independent broker i.e. it won't work out in your present circumstances. You should be viewing things with a view to satisfying their criteria & not the other way around.

You are in the fortunate position that you are able to change your circumstances in order to satisfy a lender's criteria. This will involve changing your centre of interest from Dublin to Galway. If you are really serious about things this is what you MUST do imo. There are no if's, but's or maybe's about it. You can come up with all the arguments you want as regards renting in Dublin/Galway being the same, good job prospects etc etc & to a large extent you are correct, but this is not the way a lender would view your situation. AIB have told you this, the broker has told you this (unless you are prepared to lie to the lender). Look at it as a cat & mouse situation - a lender is not going to change their viewpoint/criteria so you'll have to conform to it in order to get what you want.

You need to go back to the drawing board, arrange suitable employment in Galway, move down & rent there & get established. There are ways & means of doing things & I'd strongly recommend that you both sit down together & consider changing your mindset about the entire situation. It's only after having done this that you can seriously expect to achieve your long term goal because at the moment as harsh as it sounds, unfortunately as things stand it's nothing but a pipe dream.