Deposit tied up - any ideas?

Helptobuy

Hi
I have recently been given the opportunity to buy a great family house.
Background is that we are family of 6, currently renting as our previous semi was just too small. Our own house is also currently rented out to tenants on a 1 year lease. Rent received offsets the rent we are paying. We are tax compliant and house is registered with PRTB. Mortgage advisor in the bank said it would not really be of any benefit to us if we sell this house at the present time (no equity to speak of - maybe €10k in it)
I approached the bank regarding a mortgage to buy house. We will qualify for enough funds for the purchase.
My dilemma lies with the deposit. I have money invested (80k) in the same bank but the fund does not mature for another 2 years - did not plan on needing it but the arrival of twins forced the move to a bigger house. This is more than enough for my 20% deposit, fees etc.
I asked the bank about getting the money released from the term account but they have flat out refused to do this. The house that has come up belongs to a family friend and is coming at a good price and would suit my family for life - its not a huge (celtic tiger) house but sits on an acre so offers the opportunity for the kids to grow into it.


Just wondering if anyone has had a similar situation or any ideas? Thanks

Mrs OBumble

Would your family friend consider renting it to you for two years, until the deposit becomes available? Obviously this will depend on their circumstances, but you can only ask.

Helptobuy

I'm sure they probably would. They are not selling because they need the money really (could get more if they put it on the open market) but they are borderline elderly and I would imagine that they are putting their affairs in order at this stage. I know I am already getting a good deal on the property and I would hate them to think I am messing them around. They live part of the year abroad and are due back at the beginning of March so I'm just trying to see if there is any other way around this.

I have had to clear car loan (14k) to be in a position to apply for mortgage so that has used up most of our available savings. I'm wondering can I force bank to break investment and what would penalty be likely to be?

Toots

What sort of investment is it? Is it a fixed term deposit savings account, or is it one of those investment products that splits say 10% in stocks, 10% in equities, etc?

ted1

What rate is the bond? Could you sell it ?

Helptobuy

Toots wrote: »

What sort of investment is it? Is it a fixed term deposit savings account, or is it one of those investment products that splits say 10% in stocks, 10% in equities, etc?

I'm not sure, my husband has the details, Will have to check with him - would this make a difference?

Ken.

I know nothing about savings accounts of this type but would it be possible to assign it to the people your looking to buy from?.

hfallada

OP I would try speak to someone senior in the bank. I know some bank saving products are term fixed, but if you withdraw money earlier. There is a penalty, but you have access to the funds. I imagine you can get the money, just you wont get the interest on the money

The_Morrigan

Helptobuy - I think you may get better information regarding the fixed term savings here, A&P isn't geared towards advice on financial savings products.

Morri

P. Breathnach

Possibly an expensive solution (but better than no solution at all): can you explore with the bank a two-year loan backed by the security of this investment product?

Helptobuy

P. Breathnach wrote: »

Possibly an expensive solution (but better than no solution at all): can you explore with the bank a two-year loan backed by the security of this investment product?

This was something we talked about last night - going to try and talk to them to see if it is an option, maybe an interest only loan or something like that with the funds that are tied up being used as security.

Toots

Helptobuy wrote: »

I'm not sure, my husband has the details, Will have to check with him - would this make a difference?

Yes it could do. If it's just a fixed term savings account you can usually break out of them and pay a penalty. If it's some sort of investment fund it may not be possible, because the fund hasn't matured yet. Do you mind me asking what bank it's with?

Helptobuy

Thanks Toots - its with Ulster Bank. I'm away at my folks with the kids for mid-term and paperwork is at home so will have to check investment type when I get back. Also UB are only bank we have spoken to about mortgage yet. My sis has advised me that I might be better to go to a broker as they will have access to other financial institutions too.

Henry Ford III

Bet it's a fixed term tracker bond of some sort. No breaking them before maturity.

handlemaster

OP . If your going to rush to buying just because its seen now as a good deal with family friend you might want to think a little longer. I take it your buying in the country si de where prices won t be going up for a while . especially so in counties such as Roscommon, Longford etc

Helptobuy

handlemaster wrote: »

OP . If your going to rush to buying just because its seen now as a good deal with family friend you might want to think a little longer. I take it your buying in the country si de where prices won t be going up for a while . especially so in counties such as Roscommon, Longford etc

I take your point about rushing into things. I don't think we are. We will have to move anyway because circumstances have changed with our landlord - they will be looking at putting their house on the market probably in the summer. I have always loved the setting of the house we are hoping to buy. The house itself is in move in condition, not 100% my taste but thats only cosmetic.
The house is on the edge of a small town so you're right, prices are not rising sharply although from looking around good houses seem to be selling fairly well because not much is coming on the market. We would be getting approx 15% off (€30k) market value of the house.

Trish56

I think I would talk to your bank manager especially if your Investment is with the same bank as you are getting the mortgage from. Can the bank not offer you a short term loan on an interest only basis or even allow the interest to accumulate and can be repaid when the Investment matures. Your Solicitor can give them an undertaking that same will be repaid from the proceeds.

How much of a deposit are you looking for ? Can you get a loan from a family member ? Can you remortgage your existing property ?

handlemaster

Op. If your happy with the house and the figures look good. Go for it. Id be surprised if the same back u have investment in dont sort somthing out for you. In saying the a mortgage should be taken thats best for you not just because you currently deal with a particular Bank.

Helptobuy

Hi
Just wanted to update on this. Turns out our money is tied up in a tracker bond that doesn't mature until 2017. We have borrowed the money from 2 family members and are now in a position to apply for mortgage so fingers x'ed that all works out. Thankfully the sellers are not in any hurry to get the deal done and it suits us not to move until summer so that the kids will have time to settle in for a while before school restarts (even though they will not be moving schools).

Thanks for your suggestions/help here.

handlemaster

Helptobuy wrote: »

Hi
Just wanted to update on this. Turns out our money is tied up in a tracker bond that doesn't mature until 2017. We have borrowed the money from 2 family members and are now in a position to apply for mortgage so fingers x'ed that all works out. Thankfully the sellers are not in any hurry to get the deal done and it suits us not to move until summer so that the kids will have time to settle in for a while before school restarts (even though they will not be moving schools).

Thanks for your suggestions/help here.

bank will want to know where you got the money from. are you sure they are ok with this ?

Helptobuy

We will have paperwork to say money is a gift, mortgage advisor in bank told me this will be acceptable so I'm hoping she is right.