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Mortgage question

  • 13-02-2023 8:45pm
    Registered Users Posts: 54 ✭✭

    Question? If you got mortgage approval for around150k but found a place for about 130k. Could you use the remaining funds to purchase items or would u only get the price of the agreed place.


  • Registered Users Posts: 276 ✭✭Jazz Hands

    You will only get your mortgage on what you purchase, not what you have approval for.

  • Registered Users Posts: 10,392 ✭✭✭✭the_amazing_raisin

    You can only get a mortgage up to 90% of the purchase price if you're a first time buyer. So in this case you'd be getting €117,000 from the bank and covering the remaining €13,000 from your deposit

    Back in the Celtic Tiger days people were getting mortgages for 110% of the property value and using the extra to buy furniture and stuff

    Thankfully after the financial crisis the lending rules put an end to that

    "The internet never fails to misremember" - Sebastian Ruiz, aka Frost

  • Registered Users Posts: 151 ✭✭windowcills

    The way i see it....The idea of a mortgage is the bank owns the property till its paid back ( + interest unfortunatly), so they are guarenteed to get paid back

    if the property is worth less then the mortgage the bank is in trouble if you stop making payments

  • Registered Users Posts: 868 ✭✭✭RainInSummer

    Price of the agreed place.

    For example if you drew down the mortgage, then furnished the place tomorrow, got hit by a bus the next day, the bank would be left with a 130k house they loaned out 150k for.

  • Registered Users Posts: 54 ✭✭Tv2013

    Thanks for your replies

    for the first home deal scheme, does it have to be a newly build, why can’t it be older houses as there more of them and this make it harder to buy if this scheme was meant to make it easier to buy a home for people who may not be able to get a large mortgage

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  • Registered Users Posts: 1,060 ✭✭✭JohnnyChimpo

    The scheme was designed to put money in the pockets of developers. Any benefit to FTBs is ancillary

  • Registered Users Posts: 10,392 ✭✭✭✭the_amazing_raisin

    Not quite, you need life assurance assigned to the bank to get a mortgage

    If you die after buying the house then the insurance pays off the mortgage and your next of kin gets the house mortgage free

    I see your point though, loaning below the agreed price gives the bank insurance against negative equity and also reduces the debt burden on the buyer (theoretically)

    "The internet never fails to misremember" - Sebastian Ruiz, aka Frost

  • Registered Users Posts: 5,212 ✭✭✭Former Former Former

    It is aimed at new builds in order to incentivise building of new homes.

    More demand for new builds = more supply (in theory).

    If we subsidised second hand homes, then fewer new ones get built and the supply crisis gets even worse. Again, in theory.

    (As an aside, the government also gets a good chunk of VAT from a new house, which offsets the cost of help to buy. No VAT on second hand homes.)

  • Registered Users Posts: 10,392 ✭✭✭✭the_amazing_raisin

    Great explanation, I would also add that it's possibly a way to encourage the construction of more efficient homes rather than keeping the older G rated homes going

    I suspect it's also (in theory) a way to tackle house price inflation in urban areas. I know location is a factor but I really cannot see how some Dublin house prices are justified, considering a lot of the houses would probably need a deep retrofit

    By making newer builds more accessible then it makes second hand houses less desirable

    Of course the problem with that is that it'll just push people into the suburbs. Apartments are covered by the scheme but we only seem to build apartments to rent in this country

    And as @JohnnyChimpo said, it plays pretty well into developers favour. Certainly a good way to keep the construction industry chugging along, especially given they seem to have great difficulty actually building houses based on the amount of complaining they do

    "The internet never fails to misremember" - Sebastian Ruiz, aka Frost

  • Registered Users Posts: 868 ✭✭✭RainInSummer

    Cheers. My memory is hazy even though it hasn't been that long in going through the process.

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