2nd Mortgage - have to sell 1st apt

mobileA

Hi, I m new to here, any advice will be appreciated.

I went to bank for a 2nd mortgage, I already owned a small apartment, and want to 'upgrade' to a house.

I was told I have to sell apartment, before I can get the mortgage from them.

So, get AIP -> sell apartment -> sold -> buy new house

In the housing market, in real life, it won't work, as I know it will take me long time to sell my apartment and get a new house agreed at the same time.

I think "everyone" knows if I rent out my apartment, the rent will cover my 1st mortgage (only <500 euro per month) 100%!

(I understand the risk that it could happen nobody wants to rent my apartment, but the chance is... nearly 0... )

Is anyone in the same situation? Did the bank tell you the same, and you managed to keep your 1st apartment/house?

Regards,

Thanks,

Kurooi

First, your bank was alluding at a 'chain' - this is where you get your AIP, you list your existing home up for sale, and find a new property you like at the same time. your contract to buy and sell depend on each other and your solicitor times it so you don't end up with nothing.

This is tough! Primarily because estate agents can see on your approval that you're required to sell, which puts you at the back of the list when they're deciding whom to sell to. They may rather pick up a first time buyer who bid 5-10k less than you, but not risk the chance your sell contract falls through (as they often do) and you have to back out last minute.

Second, Yes it's possible to keep your old place, I've done it myself. You just say your old place will be up for rental (therefore is an investment) and the new one will be your residence. You should try with a few banks and especially the one you already have a mortgage with. with your repayments as low as 500 eur I think you have a chance to get that approved. Though this was difficult enough to get before and now that we're at new heights of prices, cost of living is skyrocketing and rates are going up... Banks might be even less hot about it.

mobileA

Thanks @Kurooi

They told me to try other banks if I want to keep my apartment.

I didn't tell them that I will rent it out, because she is very straight forward, "if you want to keep it, try other banks". Sounds 100% NO.

I will try the bank who gave me 1st mortgage.

brokenangel

https://www.boards.ie/discussion/comment/119558890#Comment_119558890

I had this at last house

We wanted to keep house and buy new house. The numbers looked good and this was before the crazy rents available. In the end the bank took the overall debt and gave us a new mortgage of X euro, knowing full well we needed Y to buy the new house.

So in the end we made the decision to sell the house and buy new house. Now it has worked out as we are in a far better position in terms of value of house etc but in reality if we had held onto the house. WHich I had spent significant money bringing up to near A rating standard, I would have a source of income which would have the remaining mortgage paid off now if we just put all the rent back into it.

Best advice, tell them you will rent it. You need to include the rent figures in mortgage request

The problem is they might not accept them because you haven't a 6 month of rent coming in, I had this problem as well

mobileA

@brokenangel thanks for sharing ur experience.

Q&A

Something else to consider even if the lender allows you to keep your existing property would you be able to provide the 20% deposit for the new place? I could be wrong but I don't think they would take equity that is already locked away in the first property, they will want you to pay the 20% from your existing savings.