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Getting a mortgage on a house I have equity

  • 16-11-2022 10:38pm
    Registered Users Posts: 14,739 ✭✭✭✭

    Hi guys, wondering if someone here could point me in the right direction.

    My nan died and her house is fairly special to the whole family. I want to buy the house. I actually don't own the equity, but there is a good chance I get gifted it. Long story.

    So, if I gifted the below stake in the house. Would i still have to have the deposit? I'm renting for years never missed a payment and my wife and I have OK jobs. Can easily afford the repayment on a 320000 k mortgage. Would I even be considered though? Is there a term for this?

    House value- 380,000

    Total equity - 60,000

    Thanks in advance


  • Registered Users Posts: 2,347 ✭✭✭Buddy Bubs

    I don't think bank will use the gift as deposit if that's what you're asking. Someone may correct me but I really don't think so.

    Being considered for mortgage of 320k will depend on your joint incomes, you will need that to be 72k and borrow 4 x income which would be 288k because I believe you will need 10% as deposit.

  • Registered Users Posts: 4,886 ✭✭✭Former Former Former

    In theory, the bank shouldn't care where the 'deposit' comes from, what they want is to reduce their exposure in the event of a fall in value or you being unable to pay up.

    However, your post makes no mention of savings. If you have no track record of putting money aside regularly, the bank won't talk to you. Your definition of "easily able to pay the mortgage" is probably very different to theirs.

  • Registered Users Posts: 12,251 ✭✭✭✭Geuze

    The use of the term "equity" is unclear in this post.

    This post seems to suggest that you may be a beneficiary of your grandmother's will, and that you are due to inherit a 60k share of the 380k house.

    Or else, it suggests that the beneficiaries of the estate are willing to gift you a share of the house worth 60k.

    If you receive a gift of a 60k share, you own 15.79% of the house, which is an unusual fraction.

    You then wish to buy out the beneficiaries of the will, paying them 320k for their share in the house.

    So you wish to borrow 84% of the house value.

    I think the only way to find out for sure is to approach banks and/or mortgage brokers.

    With a 4x LTI limit, you need to earn 80k to borrow 320k, presuming one income.

  • Registered Users Posts: 14,739 ✭✭✭✭minidazzler

    Hi all thanks for the responses above! Really appreciate them.

    So to answer a few queries,

    Savings, I have a track record of savings but then spent a fair chuck of it on my wedding a few months back. Getting back on track and have a good 4 year history on rent payments which would likely be higher than my mortgage repayments.

    Equity is definitely the wrong word, I couldn't think of the right one tbh. So basically getting gifted a portion of my aunts part of the house as she is the one who really wants me to buy it and has the lions share. And then also gifted potentially my dad's part. Paying them back later. But the bank wouldn't know about that for obvious reasons.

    We are dual income on Just about 75 per year now. So likely waiting a year anyway.

    From what i gather this is a fairly unusual one and I'd likely need a broker anyway.


  • Registered Users Posts: 27,658 ✭✭✭✭HeidiHeidi

    I think you'll need a tax adviser as well.

    There are different limits to the gifts that can be given tax-free, depending on your relationship to the gifter. So you'll likely owe CAT on your aunt's "gift".

    If you declare it as a loan, it will affect your ability to borrow your own portion of the purchase price.

    If you buy the house at way below market value, that has tax implications as well.

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