Using 100% of savings to buy property?

rightyabe

What’s people’s opinion on using 100% of my savings (90,000€) and borrowing about €30,000 more which I’d could easily pay back in 2 years to buy my first house?

I’m currently living in Australia which makes getting a mortgage in Ireland that bit harder.

I’d be mortgage free which would be great but it feels hard to hand over all I’ve saved over 5 years in one big hit. Would I be better of borrowing more, let’s say 60000 over 10 years and keep some savings for minor renovations to the house/holidays etc.

Mooooo

rightyabe wrote: »

What’s people’s opinion on using 100% of my savings (90,000€) and borrowing about €30,000 more which I’d could easily pay back in 2 years to buy my first house?

I’m currently living in Australia which makes getting a mortgage in Ireland that bit harder.

I’d be mortgage free which would be great but it feels hard to hand over all I’ve saved over 5 years in one big hit. Would I be better of borrowing more, let’s say 60000 over 10 years and keep some savings for minor renovations to the house/holidays etc.

You won't buy much for 120
Personally I wouldn't use all savings, important to keep some aside

rightyabe

120 will buy exactly what I need and some...which is besides the point.

Thanks for your advice on my question.

elperello

You need to ask yourself what did you save it for?
It can be hard enough to call time on saving and make a big purchase but at the rate you are going it won't be long until you build up another pot.
Maybe consider giving yourself an extra year to repay the 30k just to allow for unforeseen expenses.
Mortgage free is great you will never look back.

blindside88

Well done on the savings, I'd say maybe keep €10k back as an emergency fund and borrow 40. Maybe also give yourself another year or 2 to pay off the mortgage to allow yourself to build up more in the savings as you go. You can then use this lump sum to clear the mortgage if you wish but it'll give you a bit of a safety net

lalababa

For Gods' sake sure you wouldn't buy a fecking doghouse for 120. WHAT are you thinking ? And what about finnish? Fancy tiles and doornobs aren't going to throw themselfs up now are they? Where are the kids gonna play? Cop yourself on and borrow your absolute limit and then some.
I think you have your answer there.

blindside88

Well done on the savings, I'd say maybe keep €10k back as an emergency fund and borrow 40. Maybe also give yourself another year or 2 to pay off the mortgage to allow yourself to build up more in the savings as you go. You can then use this lump sum to clear the mortgage if you wish but it'll give you a bit of a safety net

thierry14

rightyabe wrote: »

120 will buy exactly what I need and some...which is besides the point.

Thanks for your advice on my question.

I did similar 18 months ago

Used all our savings to buy and do up a 4 bed in the West, approx 150k

No mortgage/loan

I was down to about 500e at one stage, with tradesmen, materials, furnishings etc

Thought I had really ****ed up, was getting a bit nervous with so little left and should have maybe taken a small loan.

Now 18 months on, I have a rainy day fund of nearly 10k back and feeling great with no debt.Rents are circa 900 a month here for similar properties, nice not to have pay that anymore

Why i didnt get small mortgage, is they wouldn't let me take out anything less than 50k and I only wanted like yourself 20-30k, banks wanted 7-8% apr for that amount, which was crazy and you learn to spend whats in your pocket when you have tradesmen etc around ;-)

rightyabe

lalababa wrote: »

For Gods' sake sure you wouldn't buy a fecking doghouse for 120. WHAT are you thinking ? And what about finnish? Fancy tiles and doornobs aren't going to throw themselfs up now are they? Where are the kids gonna play? Cop yourself on and borrow your absolute limit and then some.
I think you have your answer there.

Is that you Celtic tiger?

lalababa

rightyabe wrote: »

Is that you Celtic tiger?

The booom is back baby. I mean what?, what ?, no what are you thinking? Buying a house with your own money- that's just plain crazy. My mind is blown, frazzled so it is.

Bigmac1euro

IMO spend the lot, try and stay away from the bank as much as possible. Paying massive interest..no thanks.
You'll have thousands saved up again in no time paying little to no mortgage repayments.
How I wish i was in your position

lalababa

lalababa wrote: »

The booom is back baby. I mean what?, what ?, no what are you thinking? Buying a house with your own money- that's just plain crazy. My mind is blown, frazzled so it is.

Also can one get a 20 or 30k mortgage? That's like going into m&s and buying a penny sweet.

rightyabe

lalababa wrote: »

Also can one get a 20 or 30k mortgage? That's like going into m&s and buying a penny sweet.

The €30,000 would be from a personal loan here in Australia.

eezipc

steo_magra wrote: »

IMO spend the lot, try and stay away from the bank as much as possible. Paying massive interest..no thanks.
You'll have thousands saved up again in no time paying little to no mortgage repayments.
How I wish i was in your position

Agree. As you won't have rent to pay, it won't take long to build up savings again.
I did that almost three years ago. Some weeks money was tight because of work needed done on the house but we struggled through.
Now all the work is finished and savings are picking up again
Also, the house is 100% ours and nobody can take that away.

PixelTrawler

rightyabe wrote: »

What’s people’s opinion on using 100% of my savings (90,000€) and borrowing about €30,000 more which I’d could easily pay back in 2 years to buy my first house?

I’m currently living in Australia which makes getting a mortgage in Ireland that bit harder.

I’d be mortgage free which would be great but it feels hard to hand over all I’ve saved over 5 years in one big hit. Would I be better of borrowing more, let’s say 60000 over 10 years and keep some savings for minor renovations to the house/holidays etc.

If I were in your position, Id borrow maybe half the money on a variable mortgage . That would leave me with cash for legal, finishings and emergency money.

The beauty of a variable mortgage is you can overpay as much as you like, when you like. The interest on a 60k mortgage would be low, so you could pay off over time, or drop cash into it if you feel the time is right. You wouldn’t be tied to the 10 years or whatever term you agree. That really only sets a monthly floor on your payments.

lalababa

rightyabe wrote: »

The €30,000 would be from a personal loan here in Australia.

So not a mortgage . Yea I don't know bout banks in Ireland lending small mortgage s, even though it would be low risk high reward for them. The route you are thinking of seems sound, I would agree with you. But I'm not a financial advisor.
I definitely would look at interest rates of personal loan versus 30k mortgage (if they cater for that) and repayment periods , and what they can take from you if **** hits the fan.

CIARAN_BOYLE

Are you buying in Ireland and moving to Ireland, if so you will need your savings to handle any transitionary issues if you are between jobs. Also does the 120k cost include fixtures and fittings. You don't want to run out of cash and be stuck with an unfinished property.

rightyabe

CIARAN_BOYLE wrote: »

Are you buying in Ireland and moving to Ireland, if so you will need your savings to handle any transitionary issues if you are between jobs. Also does the 120k cost include fixtures and fittings. You don't want to run out of cash and be stuck with an unfinished property.

Buying in Ireland but staying in Australia a few more years anyway I’d say. The house is ready to move into or rent out. I’d probably put a extension on it in a few years time whenever I’d move into it full time myself.

astrofool

I'd look at it this way.

Yes, it'd be nice to have more savings, but, if when buying a house, it enabled me to move to a better house in a better location, then I would spend it all, even if it meant "making do" in the property for a couple of years while saving to renovate.

(I wouldn't however touch a pension).

AlmightyCushion

thierry14 wrote: »

Why i didnt get small mortgage, is they wouldn't let me take out anything less than 50k and I only wanted like yourself 20-30k, banks wanted 7-8% apr for that amount, which was crazy and you learn to spend whats in your pocket when you have tradesmen etc around ;-)

In that case, could you just get a mortgage for the 50k and then as soon as you can pay off the 20 or 30k as a lump sum with your savings? You'd get the rate and term of a mortgage but for a smaller amount than the 50k.

Eric Cartman

rightyabe wrote: »

Buying in Ireland but staying in Australia a few more years anyway I’d say. The house is ready to move into or rent out. I’d probably put a extension on it in a few years time whenever I’d move into it full time myself.

OP, id get a term loan of 50k for 5 years , buy the house and pay all your fees, anything that needs to be fixed etc.... leave yourself 10k in the bank and dump whatever left off the loan. That way you'll have 10k in the bank and only owe say 35-40k on a bank loan, pay it off over the 5 years and then you'll be debt free and have your house to come back to.

Mumha

lalababa wrote: »

Also can one get a 20 or 30k mortgage? That's like going into m&s and buying a penny sweet.

We bought a house recently from our savings and shares (no loan), and had to spend more savings doing it up. Now to finish it to a good standard, we've taken out a €30k personal loan, which I would have preferred not to do but I did anyway, as we want to get the best first rental price we can for the area, which is rent controlled.

People have said to me why didn't we put in the bank or buy shares. My view is that even after we pay the tax on the rental income, we'll still be way ahead of putting it in the bank, and while it's risky when you have crap tenants, depending on the stock market with a volatile world is imo riskier.