Planning buying second property in next three years…….

dharma200

Hello,

I am trying to get my ducks in order to buy a property in Limerick in next three years. I own outright a rural property I bought as cash buyer in 2015. It’s value is in the 100000 region. I have never had a mortgage.

The property I own needs a bit of work and as such have been renting last couple of years with two teens in a nearby town. Both my teens want to go to college in limerick. Once works are completed in cottage I may rent (family member) or short term rent (beautiful location with stunning views possible air b n b scenario).

I am in a pensionable scalable postion and and getting my contract of indefinite duration this year. I want to purchase a property to live in in Limerick city as will probably be working there for next fifteen years or so and teens will be wanting to live there too when in college or uni.

I am not looking at the hundreds of thousands style properties. Run of the mill estate perhaps needing work. I see this as maybe in the 150 thousand range.

Have car loan and credit card currently with Avant - around 13000 combined. No missed payments or bad credit.

I am wondering - am I seen as a second time buyer even though have never had mortgage? Do I need 10 or 20 % of house price? What are the implications of owning two properties, do banks let you borrow against one property you already own?

I should have moved up the salary scale in three years meaning on my own I can borrow 3,5 x and be at 180 - 200.

I will be late 40s so I know that has implications on year limit on mortgage.

If anyone has any advice on how to future plan and get all my ducks in order let me know.

Dont want to sell rural property as want to retire there.

Thanks in advance!

blarb

I bought my first property using cash. I proceeded to rent it out after a few years and was renting a room myself in Dublin at the time. I started getting the idea of buying another place, so began saving. Ended up getting FTB mortgage with EBS using a 10% deposit! They knew about my first property but said it was my first mortgage so I was eligible for FTB, as long as this was going to be my own residence. This was in 2018.

Edited to add its worth chatting with a broker about your options. Generally banks don't let you borrow against a property you already own. I was told last year that Finance Ireland do, although their interest rates are much higher and the broker said they can take a long time to approve loans. I'd say your best bet is try to save the 10%.

poker2k9

Also make sure you clear all your loans before you take out the mortgage as that will impact how much you can borrow. Some lenders may make it a condition to drawdown.

1874

I would do as another has suggested and clear loans, especially unsecured debt (CC), car loans may be less of an issue with a lender as it may be recognised for what it is and there is an asset that could be recovered.

Imo Having a car loan would definitely reduce the amount you could get for a home loan. I think that's mostly well known and understood and why I spent 2k on a car in cash leading up to making a house purchase and waiting to buy a car I wanted/needed until after I completed a purchase.

Its my opinion only, but lots of CC spending (alongside other spending) wouldnt look as good, unless you carry out all or specific transactions that way to give yourself some added protections. I'd suggest any spending for ongoing monthly outgoings via a CC be paid off in full every month, plus a minimum amount off any CC or other debt elsewhere. I also think being consistent, calculate a minimum amount you can definitely afford regularly weekly/monthly etc commit to that and if possible pay off a bit extra if ever anything left over, but never leave it so you have to borrow from yourself by scrimping elsewhere. It is better being consistent rather than not paying a CC one month or just the bare minimum and then lobbing in lots another month.

jimmythesulk

Mortgage amount is now 4 times your salary as opposed to 3.5 times that you have stated.

Kurooi

You're a first time buyer if you never had a house-related loan advanced. If you bought cash and never tried to refinance or otherwise use the house as collateral you're up for the 10% loan. Assuming the property you're buying is intended to live in and not an investment.

Not much to advise on, save money to help yourself, don't worry about how your statements look, just so long as the 6-12 months right before your application look good. (regular savings, no gambling, late night card tapping sessions at bars) I would certainly want to clear the credit card and car loan, they're not massive I'm sure many underwriters will wave them off but the interest rate on those is high enough it's going to hinder your ability to save over the next 3 years. No sense in squirreling money away while you're paying 7-10% down the other end to let it sit in the bank @ 0%