Mortgage question for those who know how it works!

shashaela

A middle aged Dublin couple, (late 40s and early 50s) renting, with teenagers. May come into inheritance of about 50-60k. Combined salaries just under €40k per year. No other savings. With the 50-60k available to use as a deposit what would the chances of being approved for a mortgage, in Dublin , for a 3 bed property? Honest opinions or experiences.

blanchwill

afaik first time buyers can borrow 4x their combined salary, so in your case a maximum of 160k subject to affordability. Combine that with your 60k inheritance that leaves a maximum purchase price of 220k.

ted1

zero.

you'll only get a mortgage till the age of 65, so max of 15 years

ignoring all that you have income of 40k, 3.5 times that is 140k adding deposit and you only have 200k. you wont find anything for that in Dublin.

with your dependants you wont get 3.5 times your salary, social housing is what you need.

Soc_Alt

https://www.boards.ie/discussion/comment/123852751#Comment_123852751

you forgot the grants available for HTB

https://www.citizensinformation.ie/en/housing/owning-a-home/help-with-buying-a-home/help-to-buy-scheme/#b60e20

GiftofGab

Hi OP, are you sure your combined salary is under €40k per year?

The minimum wage in Ireland is €12.15 p/h. Working full time at 37.5 hours per week, that equals €23,692.50 per year. For a couple both earning minimum wage thats €47,385.

XsApollo

depends on the price, but seeing the market as it is the price would want to be pretty low.

with 40k combined salary

Max amount you can borrow is 4 times your salary, so 160k + plus inheritance.

How many kids do you have? Kids reduce your capacity to repay

Being 50 also reduces the term you can borrow for which increases your repayments.
Your repayment term will be till you’re aged 67 I think.

So that is a 17 year mortgage. Which makes the repayments higher.

Last time I got a mortgage , 5 years ago.
ability to repay is as follows.
banks deem a couple to require 2500euro a month to live on, they also factor in an amount for dependants children, I can’t remember was it 250 or 500 euro a month required.
they will also stress test your repayment ability , So if the interest on your mortgage is 4% then they will calculate at 5% to allow for interest rate changes.

Putting details into a mortgage calculator.
a house valued at 250k , with 50k deposit, leaves a mortgage of 200k.
repayments on that over 17 years is 1300 a month @ 3% interest rate.

So 2500 to live as a couple

250 or 500 for each dependant child

And 1300 a month repayments. We will call it 1500 a month stress tested.

So that total is 4000 euro per month and say 500 for child is 4500 a month how that would be calculated, provided you have no other repayment liabilities such as loans or credit cards, your income would need to be 4500 a month to cover that mortgage.

The exact numbers might be different nowadays or my numbers might be off. , but that is the gist of it.

shashaela

We're already on the housing list a very long time. My fear was that we'd finally get a housing offer and be told hey you have enough savings to buy your own home. But now I know from above calculations how mortgages/deposits etc .. work without being laughed out of a mortgage brokers office!!! I was far too embarrassed to go to one to find out if we'd qualify for a mortgage!

XsApollo

well don’t take my advice as gospel, but it is close enough,

You could still go to a broker, or even the local authority home loan, if that is still and thing and see what they say.