Do we stand a chance to get mortgage?

Lily_Aldrin7 · 22-12-2019 8:25pm #1

Hi there, I’m just looking for some opinions from people who have a better idea of how hard it is to get a mortgage.
My partner and I don’t have much money, essentially we only get enough to get by. I work full time on a low salary of 26 k plus some bonus that doesn’t amount to more than 1 k a year. My partner does night shifts 2-3 times a week but only during “high” season so nothing during the winter. We have 2 small children so he minds them during the day and we don’t pay for childcare. My partner’a dad has an apartment in his home country that he wants to sell and it’s value is around 80 k which he would like to give us so we can possibly buy our own place here (we live in the south east). We currently pay 900 euro a month for rent, never late with it. Do we stand any chance of getting mortgage or will they laugh in our faces if we even ask ?

listermint · 22-12-2019 8:27pm

Have you savings. Are you working towards deposits. What's your credit history. You need to look at these things and speak to a good broker for advice.

Samuel T. Cogley · 22-12-2019 8:29pm

You can apply for 3.5 times your salary but they will also look at affordability of those repayments. They will take a significant chunk off for two children I'm afraid. You'll probably find that you'd be able to borrow so little you wouldn't make the minimum mortgage amount so will not be able to borrow. Sorry to be the bearer of bad news. Nothing stopping you approaching a bank though and seeing what the story is I just wouldn't go paying a broker.

22-12-2019 8:30pm

Your best option is to go talk to the bank. I personally think you’d be below the net disposable income criteria.

Eric Cartman · 22-12-2019 8:32pm

so basically 26k is kind of your ongoing income for the year. If you saved 10k you might just be able to purchase something for 100k , would you get anything suitable for 100k where you are ? , i think it might be a bit far out of reach.

Lily_Aldrin7 · 22-12-2019 8:32pm

listermint wrote: »

Have you savings. Are you working towards deposits. What's your credit history. You need to look at these things and speak to a good broker for advice.

We have around 10 k saved but it’s old savings from before we had children.
We have no debt, we’ve never had credit cards, debit cards only- is this a good or a bad thing ?

Lily_Aldrin7 · 22-12-2019 8:33pm

Samuel T. Cogley wrote: »

You can apply for 3.5 times your salary but they will also look at affordability of those repayments. They will take a significant chunk off for two children I'm afraid. You'll probably find that you'd be able to borrow so little you wouldn't make the minimum mortgage amount so will not be able to borrow. Sorry to be the bearer of bad news. Nothing stopping you approaching a bank though and seeing what the story is I just wouldn't go paying a broker.

No worries, that’s what I think myself !

handlemaster · 22-12-2019 8:33pm

OP you are bearly getting by. Best to focus on getting permannt work for yourself and getting a higher wage for your partner

Lily_Aldrin7 · 22-12-2019 8:34pm

Eric Cartman wrote: »

so basically 26k is kind of your ongoing income for the year. If you saved 10k you might just be able to purchase something for 100k , would you get anything suitable for 100k where you are ? , i think it might be a bit far out of reach.

My partner’s father is offering to give us around 80 k after selling his apartment so 100 k would be plenty- a good 3- bedroom house here is around 160 k

Lily_Aldrin7 · 22-12-2019 8:37pm

handlemaster wrote: »

OP you are bearly getting by. Best to focus on getting permannt work for yourself and getting a higher wage for your partner

I know what you mean, I just think that paying mortgage would be so much better and probably even cheaper than paying rent.

Eric Cartman · 22-12-2019 8:38pm

Lily_Aldrin7 wrote: »

My partner’s father is offering to give us around 80 k after selling his apartment so 100 k would be plenty- a good 3- bedroom house here is around 160 k

youd have to check with somebody but that 80k some will likely be eaten in tax , you'd also still have to demonstrate a savings record but if you can get the house you want for 160k you might just about do it, especially as theres only 50% mortgage on it.

Have a look at the council mortgage scheme, not sure of the entire details on it but it is suitable for lower incomes.

handlemaster · 22-12-2019 8:39pm

Lily_Aldrin7 wrote: »

I know what you mean, I just think that paying mortgage would be so much better and probably even cheaper than paying rent.

I understand. Still think you would be better off getting more or of an income first then focus on buying a home. A better salary /position may not be where you are currently living.

SteM · 22-12-2019 8:40pm

Will you have to pay Capital Acquisitions Tax on the 80k?

Lily_Aldrin7 · 22-12-2019 8:40pm

Eric Cartman wrote: »

youd have to check with somebody but that 80k some will likely be eaten in tax , you'd also still have to demonstrate a savings record but if you can get the house you want for 160k you might just about do it, especially as theres only 50% mortgage on it.

Have a look at the council mortgage scheme, not sure of the entire details on it but it is suitable for lower incomes.

Oh no, I didn’t realise that the help we get would be taxable! This was my only hope really! Thank you so much for letting me know, I will do a bit of a research!

Lily_Aldrin7 · 22-12-2019 8:43pm

handlemaster wrote: »

I understand. Still think you would be better off getting more or of an income first then focus on buying a home. A better salary /position may not be where you are currently living.

Unfortunately, a better position would be hard for me to find. I used to make much more in Dublin but we still couldn’t manage living there with the 2 children with the rent, childcare and travel costs.

bunderoon · 22-12-2019 8:49pm

Ye really need to sort out better employment/income. Upskill/certifications etc. Since you are the main income in the house, if something happens to you, ye will be in big trouble.
Service based jobs will diminish greatly in the next 5-10 years. And your kids college expenses will be significant by that time.

A mortgage of 160k is would be about 650-700 per month. A saving of 2-250 a month versus renting. That's 2-3k a year. I'd gamble and wait a few years. The next recession is just around the corner. Don't buy in an overheated market.

MIKEKC · 22-12-2019 8:51pm

Lily_Aldrin7 wrote: »

Oh no, I didn’t realise that the help we get would be taxable! This was my only hope really! Thank you so much for letting me know, I will do a bit of a research!

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

Lily_Aldrin7 · 22-12-2019 8:51pm

SteM wrote: »

Will you have to pay Capital Acquisitions Tax on the 80k?

I’m just researching this now and I’m not entirely clear on it, it’s the first time we would ever get any money from anyone so we’re not over the 325 k limit but I feel like I must be misunderstanding it!

punisher5112 · 22-12-2019 8:52pm

Move to a place where a property is much cheaper, commute, change jobs, try and get work that will work around the kids as he should well be able to get work, plenty of jobs out there.

Lily_Aldrin7 · 22-12-2019 8:53pm

bunderoon wrote: »

Ye really need to sort out better employment/income. Upskill/certifications etc. Since you are the main income in the house, if something happens to you, ye will be in big trouble.
Service based jobs will diminish greatly in the next 5-10 years. And your kids college expenses will be significant by that time.

A mortgage of 160k is would be about 650-700 per month. A saving of 2-250 a month versus renting. That's 2-3k a year. I'd gamble and wait a few years. The next recession is just around the corner. Don't buy in an overheated market.

Yep, maybe use the money and invest in getting better degrees, I was thinking about that too

Samuel T. Cogley · 22-12-2019 8:54pm

Lily_Aldrin7 wrote: »

I’m just researching this now and I’m not entirely clear on it, it’s the first time we would ever get any money from anyone so we’re not over the 325 k limit but I feel like I must be misunderstanding it!

It's 325K. The 80K would not be taxed.

mycro2013 · 22-12-2019 8:57pm

If your father inlaw gives the money solely to his son,your partner no cat will be payable.. If he however gave the money as a gift to both of you. Your share would be liable for cat.

Under current legislation, parents can give a child gifts or an inheritance of up to €310,000 tax-free (the Group A threshold) before the child owes any Capital Acquisitions Tax (CAT).

Samuel T. Cogley · 22-12-2019 9:00pm

mycro2013 wrote: »

If your father inlaw gives the money solely to his son,your partner no cat will be payable.. If he however gave the money as a gift to both of you. Your share would be liable for cat.

Under current legislation, parents can give a child gifts or an inheritance of up to €310,000 tax-free (the Group A threshold) before the child owes any Capital Acquisitions Tax (CAT).

335K now from what I can see but in any event it's over 80K.

Eric Cartman · 22-12-2019 9:01pm

MIKEKC wrote: »

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

they did say its from a property sale in another country though, now could be completely wrong but depending on where that is , it may create a liability on the fathers side or the sons.

punisher5112 · 22-12-2019 9:03pm

Credit unions are giving mortgages up to €100k.

If you buy a property and oy needs a very small mortgage it's possible.

mycro2013 · 22-12-2019 9:09pm

Have you looked at getting a rebuilding Ireland home loan. A trip to your local citizen information would offer details of the scheme.

Lily_Aldrin7 · 22-12-2019 9:28pm

mycro2013 wrote: »

Have you looked at getting a rebuilding Ireland home loan. A trip to your local citizen information would offer details of the scheme.

This is brilliant! Thank you so much, I didn’t know about it at all!

Stopitwillya · 22-12-2019 9:29pm

You said south east so it's hard to know which town/city you are looking to buy in but if it's Waterford you could buy this at 130k.

https://touch.daft.ie/for-sale/semi-detached-house-15-briot-close-templars-hall-waterford-city-co-waterford/1166864

Use 5k from your savings, other 5k needed for solicitor, etc. 80k gift.
Would mean you would have equity of 85k and only need to borrow 45k.
Easily affordable as you are already paying €900 pm rent and with so much equity bank would surely approve. I'm sure their would be similar houses in Kilkenny, Wexford, etc.

handlemaster · 22-12-2019 9:37pm

MIKEKC wrote: »

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

But the money will be going to purchase a home not only for the son but the daughter in law. Therefore she will be a beneficiare also. I'd imagine that on 50% taxes would be due. Unless of course from husband to wife would be exempt.

silver2020 · 22-12-2019 9:42pm

So you will have circa €80,000 - €90,000 between savings and a gift from your partner's dad to your partner. (it can't be to you as there would be tax implications).

House in the area you are looking at is about €160,000.

Allow for expenses and furniture, you will be looking for a mortgage of about €80,000-€90,000.

That will cost about €450/month on a 20 year term.

The problem you are up against is earning €26,000 and partner not earning much except on a seasonal basis - even if he could get a job for evenings / days you are off and get 12-15k a year, you'd ahve a chance. But on €26k and two children, the banks won't look at it.

But as above, both rebuilding Ireland homeloan and joining the local credit union where 20 year small mortgages will become available soon (in some cases already available) will give you a fighting chance. But in reality, you need to bring joint earnings up to €40,000. Considering the job market, that shouldn't be too difficult if you really wanted it.

mycro2013 · 22-12-2019 9:53pm

The loan rates being charged by the credit unions are extortionate. Credit unions are fine for small loans but
once the sums increase they are not competitive.

To the OP a trip to your local county councillor would also be beneficial as the rebuilding Ireland loan is administrated by the local authority.

Do we stand a chance to get mortgage?

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