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Mortgage Top Up Needed

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  • 07-09-2023 9:52am
    #1
    Paddigol
    Registered Users Posts: 1,437 ✭✭✭


    Hi, posted this in another forum (relating to a self build) but possibly this is the better place to look for thoughts...

    In a nutshell, having bought a site we're building our own house. Have an Architect, QS and Builder signed up and work is well underway.

    We've drawn down approx. 50% of mortgage to date. Mortgage offer was based on the initial approval in principle received in Feb/ March 2020, and only drawn down in early 2022. While we're waiting for updated costs from the QS and Builder, it's clear as day that final costs are going to exceed our initial budget (thanks Covid/ Putin/ Supply Chain Breakdown/ Materials Shortages/ Inflation/ Housing Crisis). I'd prefer to go to the bank as soon as possible to get things lined up and clarified rather than waiting until money has dried up and we're standing with our hands in our pockets looking at an unfinished build and invoices.

    Has anybody had to go down this route/ have any insight into the mechanics?

    I'm interested to know what the banks' approach is?

    Our financial circumstances are much improved from when we received our initial loan offer (both salaries have increased, savings much higher etc). Despite renting and paying partly-drawn mortgage, we're still saving significant sums every month. I've no concerns over ability to meet any increased mortgage monthly repayments. If we were applying for a mortgage (FTB) now rather than in 2020, using the same metrics the bank did back then we'd stand to be offered a much higher mortgage now.

    What I'm hoping I don't hear before I have to go to the bank is that they have zero interest in playing ball with you/ they're generally reluctant to agree to let any more money out.


    Any insight/ advice would be much appreciated!



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    #2
    G_R
    Moderators, Education Moderators Posts: 5,024 Mod ✭✭✭✭G_R


    Mechanically, it would be processed as a top up on your initial mortgage (ie you draw the full amount already approved, and then a top up to finish it).

    It's in the banks interest that you have a completed property, that's their security and it's of little use to them not finished, so they're likely to approve, however they are still going to be bound by CBI rules on loan to income limits and LTV so hopefully you guys are within those. If so, I can't imagine there being a major issue, if, as you say, your circumstances have improved.

    Definitely better to go them as early as possible though.



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