Mortgage deposit

fogartypj

Can a site be used as a deposit for a mortgage ? Currently renting.

BryanF

most banks won’t accept this as a deposit

dubrov

I think EBS allow it while BOI insist on an additional 10% deposit. I'm not sure about the rest.

Personally, I think it's madness for banks to not count the site towards a deposit.

Dudda

dubrov wrote: »

Personally, I think it's madness for banks to not count the site towards a deposit.

If the site is gifted and the only way you can get planning permission is local need built on family land the planners usually condition that the house can't be used by anyone else for 7 years. This makes it worthless to anyone else so I can see clearly why it wouldn't count towards a deposit.

If it was a city centre brown field site anyone could build on it could be a different story.

kieran.

My experience is most banks will except it as a deposit or partial deposit, they wont except it as collateral against another property generally.

dory

I'm looking for a mortgage now and I've been told that I can use it.

sea12

I was able to use it as my deposit . Bank of Ireland

dubrov

sea12 wrote: »

I was able to use it as my deposit . Bank of Ireland

Strange. I was told in Q3 2018 that I needed an additional 10% by BOI even though the site already had full planning (not linked to any person) and made up a large portion of the final valuation of the completed build+site.
I even argued it with the guy on the phone but he wouldn't budge and replied as if he was reading off a script.

Best thing to do is ask all the banks before filling out the documentation.

BryanF

dory wrote: »

I'm looking for a mortgage now and I've been told that I can use it.

Is this a rural or urban - ‘brown or green’ site?

ustari

Did so with AIB yes.

somesoldiers

I am starting out a self build also & have been told by a broker that it is entirely acceptable by UB & AIB at least as deposit for a self build on same land, others were ruled out for other reasons.

sea12

dubrov wrote: »

Strange. I was told in Q3 2018 that I needed an additional 10% by BOI even though the site already had full planning (not linked to any person) and made up a large portion of the final valuation of the completed build+site.
I even argued it with the guy on the phone but he wouldn't budge and replied as if he was reading off a script.

Best thing to do is ask all the banks before filling out the documentation.

That is your 10% initial contribution.

Say your total build was 250k and your site is worth 50k. Under central bank rules as a first time buyer the max you could borrow was 90%. So €225k. Well you need to have a deposit for the other €25k. Well your site is worth this much so it covers you. Now they will lend you 250k. However they also want you to put your hard earned cash into it as well so you have skin in the game. So the first 25k needs to be paid by you. However you will get this back as the last installment once all conditions of the build and mortgage are completed satisfactory.
Hope this explains it.

Assuming site is fully owned by you without loans etc.

dubrov

sea12 wrote:

Say your total build was 250k and your site is worth 50k. Under central bank rules as a first time buyer the max you could borrow was 90%. So €225k. Well you need to have a deposit for the other €25k. Well your site is worth this much so it covers you. Now they will lend you 250k. However they also want you to put your hard earned cash into it as well so you have skin in the game. So the first 25k needs to be paid by you. However you will get this back as the last installment once all conditions of the build and mortgage are completed satisfactory. Hope this explains it.

The point is the site was fully purchased by me so i already had skin in the game. If I had bought the site by borrowing 10% of the total build cost and kept the difference as a deposit I would have been fine even though the credit risk is the same.

The guy may have been confused though so better to double check

368100

dubrov wrote: »

The point is the site was fully purchased by me so i already had skin in the game. If I had bought the site by borrowing 10% of the total build cost and kept the difference as a deposit I would have been fine even though the credit risk is the same.

The guy may have been confused though so better to double check

I get fed up of people getting "confused" like that. The amount of misinformation you get from larger companies is crazy. I'm in the middl3 of buying and got at least 3 different versions of process from bank. Then I went to transfer the electric, having been told before that the arrears that the previous owner owed would be wiped, I then had to have an argument and spend a day on and off the phone before I got someone who knew what they were at.

I had met EBS about a self build as I was considering it...they said they will take site as deposit and lend (as a FTB) up to 90% of the house value on completion.