Trading up, BOI tracker, renting and risks

MAJJ

Hi Folks,

We are trading up, selling our home in D16 and looking for a larger home in the same area. We initially tried to sell and buy and align but our bids were only being used to drive bidding wars and we were never in the running

So now we have decided to sell, potentially rent and then buy. Our own sale is proceeding. We are doing this now as D16 appears to at least have stabilised and is certainly down a little from last year.

We have a BOI tracker that when we sell we have 6 months to use.
We will also quite likely need short term local rent for about 3 - 6 months.

We already have a narrow house selection in the area we are looking at and the typical busy times for house going on the market Aug/Sept and March/April.

I see the following risks:
we take longer than 6 months to draw down and lose our tracker. Does anyone have any experience with BOI in this regard?

we end up longer in rented accommodation - where is good for finding short term accommodation 3 - 6 months - airbnb? any others options?
the market rises and we can't afford/need to compromise - hard to mitigate against!

Thanks,
MAJJ

Michael D Not Higgins

Why were you never in the running when you were bidding before?

I'm surprised you haven't thought about renting until now if your own house sale is going ahead. Having a quick look at short term lets for D16 and it's slim pickings, not to mention expensive. I found a two bed apartment at 800/week, that's nearly 3500/month. Seeing as you're trading up, it's likely you have a family, maybe a couple of kids too? Daft has some houses in D16 on year leases starting at €1600. I'd start there and see if they'll take a higher amount for a short term lease.

MAJJ

Hi Michael D, thank for the post. We were never in the running because of cash buyers always coming up trumps even when we outbid them. Simply the nature of the local market and yes I have a family and rent will be very expensive. We are in the early part of our sales process and have not agreed contracts or closing dates, hence the questions are coming now.

Michael D Not Higgins wrote: »

Why were you never in the running when you were bidding before?

I'm surprised you haven't thought about renting until now if your own house sale is going ahead. Having a quick look at short term lets for D16 and it's slim pickings, not to mention expensive. I found a two bed apartment at 800/week, that's nearly 3500/month. Seeing as you're trading up, it's likely you have a family, maybe a couple of kids too? Daft has some houses in D16 on year leases starting at €1600. I'd start there and see if they'll take a higher amount for a short term lease.

Michael D Not Higgins

MAJJ wrote: »

Hi Michael D, thank for the post. We were never in the running because of cash buyers always coming up trumps even when we outbid them. Simply the nature of the local market and yes I have a family and rent will be very expensive. We are in the early part of our sales process and have not agreed contracts or closing dates, hence the questions are coming now.

Oh good, the way you worded it sounded like contracts were being exchanged soon!

AirBnB had two places when I looked in D16, one was a two bed and the other was 11 grand a month. Some other short term rent sites had very shabby looking places, but on daft there were some reasonable rental properties (some even unfurnished if you're taking your furniture with you) that you might be able to convince the landlord to take a short term contract in exchange for a slightly higher price.

ixus

Have you worked out the figures on the difference of losing tracker on new house? Time wise, it's a risky game.

Is it six months to completion or go sale agreed?

MAJJ

ixus wrote: »

Have you worked out the figures on the difference of losing tracker on new house? Time wise, it's a risky game.

Is it six months to completion or go sale agreed?

We keep the tracker for 5 years plus a 1% uplift. So that would then revert to variable for 13 years. We have the capacity to over pay which we stopped doing when rates were low and we would do this again and also plan to put in cash payoffs.

It's move now when kids are youngish or more or less stay put for life.

As for the BOI 6 month constraint I understand it to be 6 months to completion. Which to me is my biggest risk.

sapper

I'm doing the same thing right now. We also thought that selling up then renting was the better option given the likelihood of bidding against cash buyers. The thing that really finalised our decision was when a good unfurnished house on our street came up for rent, which we have been in since Feb. Our search has been on since Jan but still nothing - having a stable rental in a nice house has been great.

I would prepare for the fact that you may need more than 6 months to find a perfect house, and lose your tracker and be in your rental for longer than you would like. These days you do not want to be desperate to buy within x months.

We signed a year lease with a penalty of a months rent if we break it. I'm assuming I am going to lose that and have chalked it up as an another cost of the sale.

We could have tried to hold on to our tracker but our old bank (Ptsb) would only lend a small amount to us - we figured if we were going to go to the hassle of moving we would need to borrow 150k more than our last mortgage so we went to a broker and have approval for a variable rate mortgage. I figure that over 5-10 years rates will realign...

In theory the house market is stabilising but if you are buying in a specific desirable area you might find you there are still one or two determined buyers out there happy to pay asking prices and more, so if I were you (and I am!) I would get approval at tracker+1% from BOI, also get approval for a max amount via a broker and find somewhere you would be happy to rent for 1-2 years by signing a lease - then you'd have all options open to you.

So far I am happy with what we have done - our old house was a 3 bed if we had been selling now we would have had to have taken a much lower price and we'd probably be getting resigned to staying there forever.

MAJJ

Just had a moment earlier to hit the thanks button. I really appreciate your post. It's great to get someone's perspective who's in the middle of the same. For us we are fortunate in that we don't need additional funding. Although renting for a year would cost us at approx 15k so if we are renting we can't hang about too long.

The 6 months is risky, as ixus had said, in reality if we lose the tracker it will cost us 5 years of the difference between ( low tracker rate + 1%) and current variable rate.

When we purchase we will likely own 50% of the house so even if we retain tracker or not we would look to get best market rate based on <50% LTV.

Sapper I wish you the best with finding you own home, especially if it's not close to where we're looking

The_Conductor

Hi MAJJ-

Prices in the D16 are drifting downwards a little- nothing startling- but the price rises of last year are history.

Even if you sold and it cost you 12-15k to rent for a year, before you found somewhere you'd like- its entirely plausible that the possible cost of your replacement home may have fallen by as much or more than any rent you may have paid in the intervening period of time- renting is not necessarily a bad thing in a falling market- it can be cost neutral (or even beneficial).

If you're looking for a 50% LTV mortgage- as you are- you will have lenders snapping your fingers for business. Lenders love low LTV ratios- you are the safest possible kind of customer they can have. Wholly aside from your tracker- I am certain you will be offered a very good variable or fixed rate product- either from your current lender (BOI) or elsewhere. I wouldn't necessarily get hung up on drawing down the mortgage within the 6 month window- yes, you may loose out on the tracker- but its a falling market, and you'll get a far better variable rate than normal borrowers- so there is both a cost and a benefit associated with it.

See how the viewings go come September- the market is doing some really weird things at the moment- once you have some idea of what the story is with local supply- and also how easy or difficult it is to sell your own house- at that point- you can better make a decision on how to proceed.

Ps- make sure you get good photographs of the property- estate agents are renowned for the ridiculously poor photographs they put online.

MAJJ

Hi The_Conductor,

Thanks a lot for your time and input, validates a lot of my own thoughts too. On the prices and the rates that's more than I hoped so may take some risk out of it, if it pans out that way.

Looking out at the moment to see what comes in Aug/Sept and will go from there. As for our own photo's in our add are really good, have seen some lousy ones and for the money they will getting I wouldn't tolerate poor service.

Again, thanks again and I too know Dinosaur Train my kids loved it too!