Mortgage Question

octoberrain7

Hi guys,

Just wanted to get some feedback on my situation if possible, before we formally meet with a broker (forewarned is forearmed and all that!):

About 9 years ago, as a single guy, I bought an apartment on my own, which I ultimately sold about a year later (at a slight loss). Fast forward to present day, I'm in a steady relationship and we're saving for a small house of our own.

Now, the question is: when I read about current mortgage guidelines, I pretty much only see the 'First Time Buyer' and 'Home Owner' tags, whereas I don't fit into either category, in that I'm in the 'Bought a place previously, but no longer have it" zone. The GF is a legit 'First Time Buyer', but I've heard that lenders will now treat both of us as previous 'Home Owners', all because I once owned a property years ago. If this is true, we'll obviously have to pay the massively higher deposit rate, which will set us back miles savings-wise.

I honestly don't see how me owning a property in the past dictates our current situation, especially seeing, in my eyes anyway, that both my GF and I are presently in the same boat i.e. neither of us own property.

Anyway, apologies for the lengthy first post and I hope I explained that somewhat clearly.

Huge thanks in advance for any input or advice you guys might be able to shed!

Thanks again!

L1011

You will be classed as non-first - that you've sold out doesn't remove that. That means the 20% deposit or scrabbling for an exemption (which would likely require a very hefty income)

SarahMollie

Yep, you're not a first time buyer anymore, and unless your GF can buy on her own, she won't be classed as one either.

octoberrain7

L1011 wrote: »

You will be classed as non-first - that you've sold out doesn't remove that. That means the 20% deposit or scrabbling for an exemption (which would likely require a very hefty income)

Ouch! Thanks for the reply and clarification, L1011.

I had a feeling I'd be bunched, was just hoping that there might be some type of middle-ground rate, seeing as herself is a FTB, and that they might split the difference between the higher and lower rates.

Thanks again!

SarahMollie

octoberrain7 wrote: »

Ouch! Thanks for the reply and clarification, L1011.

I had a feeling I'd be bunched, was just hoping that there might be some type of middle-ground rate, seeing as herself is a FTB, and that they might split the difference between the higher and lower rates.

Thanks again!

Nope, all you can do is ask for an exception, which I'd only do if you're in an otherwise very strong position. The banks have to be quite choosy about who they give their limited number of exceptions to.

Was there a reason you only held on to your apartment for 1 year? Aside from whatever the market was doing, surely when you cost in fees and taxes, thats an expensive thing to do.

octoberrain7

SarahMollie wrote: »

Yep, you're not a first time buyer anymore, and unless your GF can buy on her own, she won't be classed as one either.

Thanks for that, SarahMollie.

I honestly think that's so unfair though. She gets penalised because of my past - they should have a middle-ground rate to address situations like this. I'd totally understand it if I still owned the property, but at this point both my GF and myself are property-less(!).

I'll just have to keep making my sandwiches for lunch and frequent Dealz for another year or so! :-)

Thanks again!

octoberrain7

SarahMollie wrote: »

Was there a reason you only held on to your apartment for 1 year? Aside from whatever the market was doing, surely when you cost in fees and taxes, thats an expensive thing to do.

Bought it for the wrong reasons to be honest - purchased it because I could at the time, not because I needed to. Also bought it off the plans, which in hindsight was a really bad idea - the finished area wasn't 100% what was initially projected and I was the only *owner* of an apartment on my floor (probably the whole complex!) - the rest were all rented out and the occupiers didn't care a bean about the property, their neighbours etc. Walls were like toilet roll and noise/parties was always an issue.

Was a horrible year. Just a shame that I messed things up for my/our future, and for that mess! 20% will be tough.

Thanks again!

octoberrain7

octoberrain7 wrote: »

..............

About 9 years ago, as a single guy, I bought an apartment on my own, which I ultimately sold about a year later (at a slight loss). Fast forward to present day, I'm in a steady relationship and we're saving for a small house of our own.
..............

octoberrain7 wrote: »

.............. Just a shame that I messed things up for my/our future, and for that mess! 20% will be tough.

Thanks again!

Count your lucky stars you got rid when you did, if you bought in 2007 and held on to it you'd be in negative equity (most are, some deny) which would make purchasing now more difficult.

octoberrain7

Augeo wrote: »

Count your lucky stars you got rid when you did, if you bought in 2007 and held on to it you'd be in negative equity (most are, some deny) which would make purchasing now more difficult.

You are absolutely 100% correct, Augeo - the whole downturn kicked in soon after I sold it - I would have had to either keep it or sell it at a massive loss, so I guess I've to be thankful for small mercies and that I got shot of it when I did!

SarahMollie

Augeo wrote: »

Count your lucky stars you got rid when you did, if you bought in 2007 and held on to it you'd be in negative equity (most are, some deny) which would make purchasing now more difficult.

This is a good point, you could actually be in a worse situation.

You may as well meet with the bank and see if they'd reduce the deposit as an exception - but make sure you're painting yourselves in the best possible light - ie clear any credit card debt, have all your payslips etc in order.

mahoganygas

octoberrain7 wrote: »

they should have a middle-ground rate to address situations like this. I'd totally understand it if I still owned the property, but at this point both my GF and myself are property-less(!).

I sympathise OP. There are a lot of people in your position.
But the aim behind the FTB initiative is to encourage people to leave their family home, and allow them to start their own family home.

It's not to incentivise people doing this:

octoberrain7 wrote: »

Bought it for the wrong reasons to be honest - purchased it because I could at the time, not because I needed to. Also bought it off the plans, which in hindsight was a really bad idea - the finished area wasn't 100% what was initially projected and I was the only *owner* of an apartment on my floor (probably the whole complex!) - the rest were all rented out and the occupiers didn't care a bean about the property, their neighbours etc. Walls were like toilet roll and noise/parties was always an issue.

To be blunt, it wouldn't be fair to incentivise people to take another spin on the property roulette wheel. Obviously you and your partner aren't doing this. So hopefully the banks will be willing to meet with you and make an exception.

Best of luck with it.

octoberrain7

mahoganygas wrote: »

To be blunt, it wouldn't be fair to incentivise people to take another spin on the property roulette wheel. Obviously you and your partner aren't doing this. So hopefully the banks will be willing to meet with you and make an exception.

Best of luck with it.

Thanks very much for your kind words, mahoganygas.

I wasn't even aware of banks making exceptions in this regard, so that's something to cling to! That said, it might come to nothing and we'll still have to come up with the full 20%, but it's nice to know there might be some wiggle-room - guess we just have to sit down and have a chat with them and see.

Thanks again!

PhoenixParker

One thing to check, you had a mortgage on the property right?
If you didn't you're still a first time buyer for the central bank.

I know the 20% seems tough but even with a ftb status you still need 20% for everything above 220k. The max extra deposit you need is 22k.

Jen44

your partner is not getting penalized really as she will still be considered a first time buyer should she wish to buy on her own. I was in a similar situation i bought a house on my own and then when i got married some years later we bought a house together. We were obviously not considered first time buyers as I already had a house in some slight negative equity that i was not in a position to sell. We did however get an exemption from the 10% rule. We had a couple of things in our favor. The first house was only in 20k negative equity and is located in Drogheda which has a huge demand for rental properties. And the house we bought in dublin was coming in at under the 3.5 times our combined salary. So try for the exemption if you have a house in mind that you can bought comfortably pay for and the fact you dont still own the first house you may well qualify for the exemption. Good luck!

octoberrain7

Jen44 wrote: »

your partner is not getting penalized really as she will still be considered a first time buyer should she wish to buy on her own. I was in a similar situation i bought a house on my own and then when i got married some years later we bought a house together. We were obviously not considered first time buyers as I already had a house in some slight negative equity that i was not in a position to sell. We did however get an exemption from the 10% rule. We had a couple of things in our favor. The first house was only in 20k negative equity and is located in Drogheda which has a huge demand for rental properties. And the house we bought in dublin was coming in at under the 3.5 times our combined salary. So try for the exemption if you have a house in mind that you can bought comfortably pay for and the fact you dont still own the first house you may well qualify for the exemption. Good luck!

Thanks for that, Jen! I'll definitely angle for the exemption when the time comes - won't hurt to ask!